They spent $9,000,000,000 on the Metaverse in the first 9 months of this year.

That’s $1 billion a month.

They are currently peaking at 200k monthly users (who may only spend 5m a month). Honestly that’s way higher than I’d have guessed. I wonder what the number would be if you filtered to people who spent over 5 hours or logged on at least twice a week?

Anyway that’s $5,000 per user per month. $60,000 per user per year.

You could easily find people who would sit in the Metaverse all day every day for less than that because it would pay more than their job.

What an insane burn rate. On a product even the product’s developers don’t want to use.

And this is the future of the company?

Spending 1 billion a month on something I still perceive as a video game is lunacy. FB could practically purchase the entire games industry at these investment levels. This would be the production budget of 2 Rockstar titles per month.

... which begs the question, where is it actually going?

They should have bought Roblox … they certainly have better games and metaverse I.e 3D virtual worlds capability.

They still can.

I don’t know. After the recent scrutiny of the Instagram acquisition and whether it should have been allowed (or undone), it might not be realistic to get it through government scrutiny.

> FB could practically purchase the entire games industry at these investment levels

Games are a metaverse that people actually want to use.

FB's metaverse? Who knows.

They are selling a lot of headsets. Are they losing money on them?

Yes, they were losing money on them. They recently raised the prices, it's not clear if they're still losing money or not though.

The new ones are $1500 I would hope not lol

They have sold millions of the $300 ones

Horizon Worlds (or whatever it's called) is probably among the biggest failures in the history of business.

Any sane shareholder would oust Zuckerberg at this point, but sadly the only vote that matters is his.

I have a Quest 2 for a year now and keep trying from time to time to download the app to experience it. It's not available in my region. If that's not pure metaverse irony, I'm not sure what is.

No amount of stock selloff can get Zuckerberg fired. He has absolute control over the company.

A few days ago I asked this exact same question. And I have been told by HN comments that in the US he would still be sued even if the shareholders have non-voting rights and Zukerberg has absolute control of the company.

Yes, but those lawsuits are rare and require them to show malfeasance of some kind. They can't sue him for being stupid.

Right. But why do I care if I have no involvement with the company? Let's of people have majority voting rights in lots of companies. This fact doesn't seem to matter to anyone in any other scenario.

I honestly wonder what they are actually spending that money on. $9 billion? I guess that is 4,000 programmers, marketers, designers making $250K/month would use it all up.

I've only seen bits and pieces of the graphics, though, from what I've seen, they look pretty horrible for that kind of money.

Most of it is likely being spent on the backend pieces that support delivery of the content. That being said, it's still an insane amount of money for something that really needs to wait a few decades for hardware to catch up.

Everyone got excited with VR, myself included. I bought a VR rig a few years ago and it's fun, but it's got it's own limitations.

My experience with VR:

First year of ownership - 400ish hours in VR.

Second year of ownership - Maybe 100 hours in VR.

Third year of ownership - My wife and I break it out to play beat saber a couple of times a year.

At $1B a month, that's approximately on par with the GDP of an island nation like Sint Maarten or Grenada.

They should have acquired VRChat and Second Life and merged the technology stacks into one experience. The fact that they didn't do this implies that they have no idea what they are even doing.

They are spending $1 billion dollars a month on the metaverse for what? I really don't see it.

Mark doesn't have the taste to take this plane airborne. VR, moreso than other platforms, will require great design, artistry, music. I haven't seen anything in Meta's VR foray that looks interesting, well designed, nifty or just plain cool. It's a very reductive interpretation of virtual reality . You have a limitless sandbox and the most creative thing you can show is...meeting software? A complete lack of imagination.

Doesn't help that Mark himself keeps talking about the future - the next five, eight, ten years. He himself even admits the experience is not where it should be. Why would anyone buy any of this stuff then?

Can't wait to see what Apple is putting together.

> VR, moreso than other platforms, will require great design, artistry, music.

VRChat has some amazing experiences. In a way, it's a lot closer to being a Metaverse than Meta.

There's a non-trivial chance that there is a reality distortion field around VR due to FB investment levels. What if there is no future once FB pulls the plug? I barely even hear about enthusiasts using VR.

One lad who works at a Subway near me absolutely loves VR and talks to me about it every time I go in. But he uses Valve hardware and says he wouldn’t go near Meta stuff with a barge pole.

I bought the original steam vr headset when it came out far before FB. Reality is there is only a handful of vr games that are really worth the entry price. Beat Saber is the only one I find myself going through the hassle of hooking the thing up regularly for. The Google vr movies are a great experience though to watch people play who have never used a vr headset. Watching my parents in those movies was like watching a kid play with his first toy. If you made something like a Pixar movie with the ability to freely move around the scene, I could see that being a humongous hit with children.

> If you made something like a Pixar movie with the ability to freely move around the scene, I could see that being a humongous hit with children

That's a great idea.

It's pretty crazy to me that meta can dump a billion a month into vr without even trying that, frankly

Yeah honestly this idea would potentially make me look twice. 3d movies were big for a reason. VR movies could be huge, pre-rendering could avoid many of the hardware/resolution challenges.

As time goes on more and more interesting high quality experiences come out.

And more current vr headsets like the quest 2 can play many games without 'hooking up' anything.

When VR was pretty new lack of entertaining content was a thing, but I don't think you can say that today.

I think it's the same problem as 3D TV. There's a novelty, but actually using the tech is straining. With 3D TV your eyes hurt a lot. With VR... your eyes hurt a lot, and you have this cumbersome device on your head.

A problem with VR I see for myself is that it encompasses your entire focus. With traditional viewing devices I'm not locked in to one activity, I can multitask. The headsets are claustrophobic and limiting. And all that's after they fix the problem of high prescription lenses, which I think is insurmountable.

Nicely summed up… exactly my thoughts.

He has no taste to understand what good looks like, just look at the promo videos… I remember the one with 2 ppl logging in the morning at breakfast having a quick fly around and drinking coffee through a straw while having the headset strapped on… absolute garbage… who is this for? Absolute failure in product / UX research.

To attract users… start small… create something artistic and unique to attract a niche audience first vs trying to target everyone.

Maybe it’s about finding VR tech to patent before anyone else.

If apple pull this off, Zuckerberg would die. Literally.

(Disclaimer: i am an ex meta employee)

This is unfortunate because genuinely i like where they are going with VR and they have pushed the technology forward considerably. Their metaverse vision makes no sense to me though but hopefully they course correct

I do hope meta recovers from this. The real risk is going to be mark’s mental health and his ability to stay focused amongst this insanity. We shall see

The investor meeting did not inspire confidence. He seems to be all in and has no plans of course correction

That’s a risk I’m prepared to take. :)

Mental health? What happened… has he gone nuts or what do you mean?

He might be left but a lonely broken billionaire if his dreams of owning the virtual world don't pan out, don't you see

I think Zuck is more delusional than Kanye at this stage. Let’s create a product where we can have Microsoft Teams meetings in VR. People hate meetings regardless if they’re in person or online … VR isn’t going to solve that.

This leaves company shares with a price to earnings ratio of 12. Given the size of the company and difficulty such companies have growing, this looks to be about fair value.

An investor with a long time horizon and the ability to see past the obvious social ill this company is committing might find a good entry point soon.

Normally I’d agree with you, but here’s where I think perpetual voting control by Zuck fatally undermines that investment thesis.

If he were content to manage a stable (or declining) company and throw off cash to his shareholders for the next several decades, that’d be one thing. But instead he has ultimate decision to continue writing ten-digit company checks every month to pursue the metaverse.

Or a would-be employee.

I think if you look beyond the easy but correct narrative of the metaverse, you'd find that Facebook was in a very tricky situation even if they had never jumped into the metaverse bonfire.

Facebook at its core is bullshit. It's a growth story but they've got a user base that rounds up to every human on the planet. There's no more 5x or 10x growth to achieve.

And this is even before you get into is all this add spend even producing results or worth anything close to the amount of revenue they are getting in the short term?

People often incorrectly lable these never-ending growth stories as ponzischemes but they clearly aren't. It's own unique kind of scheme that combines the payoff characteristics of a ponzi scheme with a real business with a growth story that can never be delivered on. All said and done, these tech infinite growth investment schemes are probably just as pernicious as ponzi schemes. The losses are already drastically larger from the perspective of the people who bought into the top of this one or the last one

Facebook lost more today than the entirety of madoffs career and so independently did amazon.

Yeah Facebook is operating like a startup that is expecting high growth year over year. But a big company like that just can't do it anymore. The problem is, it's really hard for big succesful companies to just rest on their laurels. Their shareholders demand more growth.

A number of commenters here are curious about where the $1B/month actually goes. How much is cash and how much is accounting stuff? How much is on people, on VR hardware, on datacenter stuff, on airfare to safe spaces?

Lol @ “airfare to safe spaces”

Meta built a box that nobody asked for, nobody needs, nobody cares for. Now they're trying to force us into their box. How's that for a bad business model?

The rest of us call it 'a good start'.

Billions of dollars for <200k users is a "good start"?

TikTok, BeReal, Gas, and even Meta's social networks (FB, IG, and WhatsApp) all performed at least an order of magnitude better than that for the amount of money spent.

Imagine any other video game spending that budget and selling less than a million copies. It would be the laughing stock of the industry.

I believe the parent poster may be referring to this being a good start to facebook failing, not a good start for their VR project.

Yep. For those who haven’t heard it, there’s an old joke that goes something like:

“What do you call 500 lawyers at the bottom of the ocean? A good start!”

Yes, it’s tasteless, but it gives the context within which I interpreted the parent comment.

I assume this means that employee compensation is nearly half what was before, since almost half of the comp is just stock, right?

With the astronomical COL over there, those employees in palo alto are probably gonna be hurting really bad next year and beyond.

Is it common for a company to spend money on share buybacks for equity comp? Most equity agreements I’ve been offered said the board intended to authorize a fresh batch of shares for it.

Not to mention that they already owe or have paid the taxes on that "income."

I, like many, have read that porn drives most technology changes. If this is true, where's the porn in the metaverse?

There was one reporter, a woman, whos graphical image was groped, so that is weird. Will you be able to be convicted of actual crime in the metaverse? If you destroy someone else's character, can you be put into actual jail? If you grope a woman online, can you be put in jail?

Like in reddit or here, if you say something they don't like, can you be kicked off of the metaverse?

Do you have to give your actual information, real life info, to be on the metaverse? For 100% sure I would never do this.

There are a lot of problems with the whole thing in my view.

The problem is nobody wants to use a device whose main login is a real-name social media account to view porn. Meta needs to completely split its Facebook /Insta logins from Meta accounts, moving them to something more akin to Apple logins.

Didn’t they do this months ago?

Does this put Zuck in contention for Worst CEO of All Time?

Well since he started from 0. His net change can never be negative. More than can be said for many CEOs.

Well, since 1 year ago, Apple stock is down 2.7% whereas Facebook is down 69%.

I think there may be some FB-specific issues at play...

First it was MySpace, and now this.

Nice

Which is a great reason to not blow $15B on a shitty version of 2nd life.

Well they blew more than 30B on share buy backs with an average price above $300/share. It makes the metaverse investment look trivial.

I have had arguments with a lot of buy side and MBA types who try to convince me that buybacks are good for the country and patriotic but I would prefer a dividend by god. buybacks to me are un-American especially those funded by debt.

For $15B Meta could have had their own Gerald R. Ford-class aircraft carrier. and still had enough left over in change to buy Lucasfilm.

How much would it cost to buy second life itself? Though I imagine they might not want to sell to FB.

I mean it's his money, right? He can do whatever he wants with it. Corporations are not democracies and it doesn't matter what market analysts think about how he should spend his own money and on what projects.

And the market is free to consider this an unwise investment and tank the stock. ¯\_(ツ)_/¯

Also, since FB is a publicly traded company, it's not actually "his money". It's the shareholders' money (of which he is but one), and thus he has a fiduciary duty to act in the best interest of those shareholders.

https://www.law.cornell.edu/wex/fiduciary_duty

He has controlling shares so he is acting in the best interest of the shareholders which is mainly himself.