The Metaverse Only Has 900 Users

This goofy doofy image,

it's seared into everyone's collective consciousness

when they think about the metaverse even 4 years after its launch.

The metaverse, as envisioned by Mark Zuckerberg,

was just one of those vague Silicon Valley ideas that nobody concretely understood.

At the center of the metaverse was Horizon Worlds,

the flagship VR universe

that was to usher in a new era of social connection.

On the surface, Facebook had the social network effects

and the money to execute the tried andrue

if you build it,

they'll come method, but it wasn't to be.

The average person wasn't ready to meet

and interact with their friends in a virtual reality enabled world.

So, the big question here is what happened to Zuckerberg's metaverse?

Well, today Horizon World sits abandoned

as a halfbaked glitchy mess

and it's struggling to grow

as promised.

Meta's Metaverse venture, the Reality Labs division,

has lost $70 billion since 2020 and is losing billions more each quarter.

By some estimates, the number of daily users in Horizon Worlds could be

as low as 900.

This story shows just what happens

when a CEO ignores the criticism surrounding him

and insists that he knows best.

We examine the strange failure of the metaverse.

How did this happen and where did it go so wrong?

You are watching Toll Fusion TV.

>> Just a handful of years ago,

the metaverse was supposed to be the next version of the internet.

According to Zuckerberg, it was supposed to be quote,

"An immersive embodied internet where you're in the experience

and not just looking at it."

The next platform and medium will be even more immersive.

An embodied internet where you're in the experience, not just looking at it.

And we call this the metaverse.

So, of course, we have to settle the question, what is the metaverse?

Basically, a digital world where you reside with others using VR.

If you're into science fiction, think Ready Player 1 or Snow Crash.

In 2021, Facebook was having a rough time escaping controversy.

It started in earnest in 2018 with the Cambridge Analytica scandal.

Then in 2021, leaked internal documents revealed just how much Facebook knew it was

hurting its users,

social cohesion, and children, but chose to do very little.

The files dropped in September 2021, and the very next month in October,

Zuckerberg decided to unveil his grand vision of the metaverse to the world.

It just so happened to come with a complete branding change and name change.

The optics were poor

and it looked like a thinly veiled way to ditch the troublesome Facebook brand

identity and switch it to a new one.

All within a virtual presentation that lasted an hour.

The stock dropped for months afterwards.

It was because investors had no idea what the heck was going on.

And it didn't help

that the metaverse brand image

that everyone got was this low poly,

goofy goomba avatar of Mark.

It stuck in everyone's minds as a dorky but memeable image.

Since then, Zuckerberg has done a fair bit to reinvent his public image with

mixed results.

I've done a whole episode on it if you're interested.

Regardless, investors and the public wanted to know one thing and one thing only.

How was such a concept of the metaverse going to even work?

Meta would plan to launch several metaverse products.

Number one, Horizon Worlds,

a VR world with Meta Horizon OS

as an operating system

that would power their headsets.

Number two, Meta Horizon mobile app.

This is the companion app for Meta Horizon.

People could manage their Horizon profile and connect with others.

Number three, the Meta Horizon Store,

a platform for buying and downloading apps and games for Horizon OS devices.

And four, Horizon Home.

This is a personalized virtual space where users can socialize with friends

and family in a virtual environment.

But for the average consumer, the friction was immense.

First, you have to buy a headset which cost you hundreds of dollars.

Then you have to sign up to the metaverse and explore.

The lynch pin of the whole idea is

that the experience would have to be good enough to keep you coming back.

Then there's the network effects.

If no one is there,

no one else is going to be drawn to use it.

And this isn't to mention

that trust in Facebook was at an all-time low

and trust in Meta still is.

Lastly, there's the cultural element.

Most people don't understand the appeal of having a platform

that literally disconnects you from the real world.

It would take a lot to get the average person not interested in technology

to actually want to strap a pair of screens onto their face centimeters away

from their eyeballs time

and time again.

The bottom line is

that VR headsets are a hard form factor to gain mainstream adoption.

Even Apple couldn't do it.

Of course, for Apple, the price was the big issue, but still,

it's an indication that consumers aren't ready for it just yet.

All of that consumer friction aside,

the idea of Zuckerberg's metaverse didn't come from nowhere,

it was slowly being worked towards for years.

In 2014, Facebook would go on to buy VR leader Oculus.

And in 2020, they founded Reality Labs, but development was far from smooth sailing.

John Carmarmac, one of the greatest minds in technology,

was tasked with helping build Zuckerberg's metaverse in 2014.

But in 2022, he ended up leaving the company and verbally frying Meta's efforts.

According to Carmarmac, the bet on virtual reality was actually a good one,

and he's still very bullish on the technology.

He just thinks that the way Meta is going about it is wrong.

Even in 2023, John Carmarmac called Meta's VR efforts too glitchy and slow.

During the time of the 2021 Meta name change,

the company didn't have a concrete definition of what the metaverse meant.

The idea of what it was

or wasn't ended up being a mystery even to those who were building it.

According to some staff working on the project at the time,

they couldn't define what the metaverse was, even when asked.

Different employees had different ideas of what it was.

According to staff member Bernie Yei,

staff internally were confused on what they were building.

Quote, "One group of people think they're building YouTube

and another group think they're making a casual World of Warcraft for everyone. are

you making a tool

or are you making an experience?

End quote.

But it got even worse.

In February of 2022,

Zuckerberg sent out a memo on the vision of the metaverse to employees.

He told them that they should quote live in the future,

and that was it.

Employees were encouraged to use their own products, be critical, and improve it.

But in a foreshadowing of the future,

being in the metaverse was too much for even the employees to bear.

Frankly, they didn't end up liking their own product.

Part of the push to use VR internally took the form of meetings in

the metaverse,

and it went about as well as you'd expect.

An internal source spoke to the Wall Street Journal,

and they shed some light on how things went.

It was glitchy and full of friction.

So much so that it wasn't unusual for a participant to spend 30 minutes

simply just trying to join a meeting.

They'd get so frustrated

that they'd give up

and just call in the normal way with a normal video.

And that's the fundamental problem.

People are more likely to enjoy things

that are easier and more convenient for a given application.

Consider strapping on a headset

and signing into a Meta platform versus just clicking an item for a Zoom

meeting.

Which one do you think most people would choose?

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Now, back to the story.

We probably all remember what happened to Meta during this rocky period.

By October 2022, Meta stock had fallen 70% since the start of the year.

Not long after jobs were cut for the first time in the company's almost

20-year history.

From November 2022 to May 2023,

the company laid off 20,000 employees or about 25% of their workforce.

Things seemed dire, but that period was the exact bottom of the stock.

Against all odds, Mark Zuckerberg managed to turn the ship around via massive growth

in advertising revenue.

While the stock began to rebound, the metaverse didn't.

The company doesn't release public data on users, but by February of 23,

there are about 20,000 monthly users in Horizon Worlds with an estimated 8K daily

users.

YouTuber Jarvis Johnson went into the metaverse to see for himself.

And what he saw was a count as low as 900 daily users,

but that was in 2023.

And seeing that Horizon Worlds is only getting less popular,

the true number is probably even less than that today.

The only ones using the platform are basically kids that enjoy Roblox.

Frankly, it all wasn't working, and nobody cared about it.

Investors were even telling Meta to cut back on their metaverse ambitions.

They saw it as a drag in an otherwise rebounding company,

but Zuck didn't listen.

In April of 2024,

Reality Labs opened up the Horizon OS platform for use on other non-meta hardware.

It was an indication that things maybe aren't going that well.

Meta's Quest headsets are selling decently, and they're pretty good for the price,

but it's still not profitable for the company.

Meta's Reality Labs division in Q3 2025 made $470 million in sales,

but lost $4.4 4 billion.

Over the years, Meta would continue to spend money on improving the software

and hardware experiences,

including infamously spending 2 years to add legs to avatars.

But is the cost worth it?

Only time will tell.

But that brings me to another question.

How does Meta plan to make money off the metaverse?

You'd have to bet

that advertising would be at the top of their mind for the metaverse,

but it hasn't worked yet.

The additional theorized upside is

that instead of placing regular ads in a 3D environment,

advertisers build worlds and sell items in that world.

Apart from a few examples like a virtual world built by Absolute Vodka.

So far, this hasn't panned out either.

The grand vision for Metaverse revenue could be the Apple App Store model.

It's where they build the hardware, MetaQuest and Meta Raybands, and software,

but Meta gets a cut of every app developed for the Horizon Worlds

and Meta Horizon Store.

This will take a while to build, if at all.

But so far, it still looks like it's a way to light money on

fire,

but with extra steps.

As it stands, Horizon Worlds will remain a disaster for the foreseeable future.

Meta Reality Labs may have sold 20 million MetaQuest headsets,

but it still can't make a profit.

Frankly, VR just isn't working out monetarily,

but it doesn't seem to be Zuckerberg's focus anymore.

AI seems to be the new shiny thing that's distracted Mark from the metaverse

vision.

He's now spending big to poach AI experts for meta.

It's paying off for their voice assistant technology in the meta ray bands,

but the rest of the benefits largely remain to be seen.

Who really knows how the AI pivot will pan out?

It all might be a massive waste of money.

Or conversely, an AI system

that integrates into all of Meta's products could result in better targeted ads for

them.

But if that doesn't pan out in the long run,

could we see Zuckerberg strike out two for two?

Whatever the case, Mark Zuckerberg's metaverse as a whole isn't going well.

And their flagship product, Horizon Worlds, is fairing even worse.

And just to be clear,

I think virtual reality as a technology does have a future.

Just look at VR Chat,

which can have over 100,000 users at a time.

As John Carmarmac said, Meta is just going about VR the wrong way.

Anyway, that's about it from me.

Thanks for watching.

Hope you enjoyed that.

If you did, feel free to subscribe.

My name is Dogo and you've been watching Cold Fusion.

And I'll catch you again soon for the next episode.

Cheers, guys.

Have a good one.

>> >> Cold Fusion.

It's new thinking.