Meta's Concerns Mount as Internal Documents Reflect Inadequate Metaverse Accomplishments

Meta Platforms Inc's META internal documents reflected metaverse's struggle with technology, uninterested users, and a lack of clarity nearly a year after its rebranding.

While Mark Zuckerberg has said the transition to a more immersive online experience would take years, its flagship metaverse offering, Horizon Worlds, failed to gain traction, the Wall Street Journal reported.

Meta initially set a goal of reaching 500,000 monthly active users for Horizon Worlds by the end of this year, but in recent weeks revised that figure to 280,000. The current tally is less than 200,000.

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Most visitors to Horizon generally do not return to the app after the first month, and the user base has steadily declined since the spring.

By comparison, Meta's social-media products, including Facebook, Instagram, and WhatsApp, together attract more than 3.5 billion average monthly users.

Horizon is accessible through Meta's Quest virtual-reality headsets, which offer a range of games and activities. Quest retention rates have dropped in the past three years. More than half of Quest headsets remained unused six months after purchase.

The number of Horizon users online simultaneously, known as concurrency, trails far behind both the socially focused upstart VR Chat and Second Life.

Meta's metaverse challenges coincided with business issues on other fronts, including increasing pressure on its digital-ad business and competition from the social-media app TikTok. Meta shares are down more than 60% in the past year.

Internally an official said metaverse has a better shot at mass adoption than augmented or virtual reality products, and Meta was yet to devise a strategy for investing in it. Meta also debated regarding Horizon's focus on games or, as is Zuckerberg's preference, social connection.

Meta reportedly battled stability issues, and complaints from creators, he said, are making it too hard for the community to enjoy Horizon.

Meta's metaverse lacked money-making avenues for its creators, unlike TikTok and Meta's Instagram. Some virtual reality developers complained against Meta of overly strict requirements and high bar to get programs into its app store.

Price Action: META shares traded higher by 2.25% at $129.61 in the premarket on the last check Monday.