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Facebook CEO Mark Zuckerberg‘s decision to change his corporation’s name to Meta yesterday at the Facebook Connect online event was a historic moment.
The decision faced heavy criticism and turned into a meme. Seamus Blackley, co-creator of the Xbox, tweeted that Zuckerberg’s new Meta logo should come with the caption, “Here’s a schematic representation of my testicles.” Many more unkind and funny jokes mocked Zuckerberg’s grand plans.
“Here’s a schematic representation of my testicles.” pic.twitter.com/rEXXt2i1b2
— Seamus Blackley (@SeamusBlackley) October 28, 2021
People said the move was tone deaf, coming at a time when Facebook has caught so much flak for putting profits above caring for people or political peace.
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While many people made fun of Zuckerberg, I saw some shrewd moves. Lots of people have mocked the metaverse, the universe of virtual worlds that are all interconnected. But I’ve been thinking about it ever since reading novels such as Snow Crash and Ready Player One. It has been decades in the making, and while it’s here in some small forms like Second Life and Grand Theft Auto Online, and Roblox, it isn’t really here yet. As futurist Matthew Ball said, the metaverse is something that you should feel you’re inside of. And as Zuckerberg said, you should feel a sense of presence, or that feeling you have been transported somewhere else.
I have been mocked for believing in the metaverse. Against the advice of some, I created a metaverse event in January 2021, and it had 30 panels on the metaverse and brought together many of gaming’s leaders. (We’ve got another conference, GamesBeat Summit Next on November 9-10 where we’re talking about the metaverse again, and our second annual metaverse event will come in January.) While people laughed at me, I stayed the course. And I never expected Facebook, a company with enough money to do the job, to embrace the metaverse like it did yesterday.
Zuckerberg had some awareness he would be criticized. In a press event ahead of the announcement, he said (given the controversies), “I just want to acknowledge that I get that probably there are a bunch of people will say that this isn’t a time to focus on the future. And I want to acknowledge that there are clearly important issues to work on in the present. And we’re committed to continuing to do that and continuing the massive industry-leading effort that we have on that. At the same time, I think there will always be issues in the present. So I think it’s still important to push forward and continue trying to create what the future is.”
All of us science fiction geeks have been laughed at. The smart pundits at places like CNN are mocking Zuckerberg for being such a geek. But Jensen Huang, the CEO of Nvidia, is famous for saying “we’re living in science fiction.” He meant that AI struggled for so long and finally began working around six years ago. Now AI is huge, with 8,500 startups working on so many new technologies, and it is leading to advances in other areas. And yes, AI is one of the necessary breakthroughs that we need to build the metaverse. Because we succeeded with AI, we have a chance to succeed with the metaverse. I think a lot of smart people realize that, and they’re dreaming about it too alongside Zuckerberg.
I know we are a long way from the real metaverse that we all want to be amazingly immersive and instantaneous and ubiquitous regardless of our locations in the world. What we are hoping for is just a long way from reality. But Zuckerberg’s cool images and videos got the feeling right. If he can deliver on his animated visions with the real thing, then that would be really something.
If I were to bring up my favorite adage again — follow the money — I would conclude that so much money is going into the metaverse that it is going to happen. You don’t orchestrate something so huge, something on the scale of the Manhattan Project, and then come out of it on the other side without an atomic bomb. The metaverse will happen because capital is betting that it will happen, and I’ll grant that Zuckerberg has some wisdom in seeing this.
The war between Facebook and Apple
But he’s not the only one who sees it. I see the war brewing between Facebook and Apple. They both want to control the future of computing. Apple won in one respect with mobile devices, snaring more than 600 million people who use more than a billion Apple devices. Facebook failed to get anywhere with its own smartphone efforts. But Facebook has more than 2.9 billion monthly active users who use its ad-based services such as Facebook, Instagram, and Whatsapp for free. While Apple made $20.6 billion in net income on $83 billion in revenue, while Facebook made $9.2 billion in net income on $29 billion in revenue in the most recent September 30 quarter.
Apple CEO Tim Cook doesn’t really like this state of affairs as he views Facebook as a kind of parasite. The business models of these companies are opposites. Apple sells devices, while Facebook sells ads. Apple tries to charge high premiums for its products, far more than rivals such as Microsoft’s Windows or Google’s Android products. It has the highest quality, but it is often inaccessible to the masses.
Facebook, by contrast, gives away its products for free, or it sells its Oculus Quest 2 virtual reality headsets for low prices ($300 or more). Its advertising model generates enough revenue to subsidize the free products. In return, Facebook asks for a lot of personal data so that it can better target ads and generate more value with each ad.
Cook considers this to be a violation of privacy, and, while it didn’t say it, it tried to hobble Facebook by changing the rules for its Identifier for Advertisers this year. The IDFA data can no longer be used unless users explicitly give their permission to be tracked for ad purposes. Not many people are doing that, based on the very direct wording of the permission prompts. This move has hurt businesses such as Facebook.
Suffice to say, they’re at war. And while Zuckerberg said that Facebook is investing (or losing) $10 billion a year in its Facebook Reality Labs division, it’s fair to say that Apple has been investing a huge amount of money in its own VR/AR efforts. Some folks laughed when Magic Leap didn’t succeed after raising more than $2 billion for its mixed reality glasses. But that is chump change compared to what the likes of Apple, Facebook, Microsoft, and Google are spending. No one wants to lose this war for the next generation of computing. Zuckerberg showed he was fully aware of what is at stake here.
“We basically think of the metaverse as the successor of the mobile internet, in the sense that the mobile Internet didn’t completely replace everything that came before it,” Zuckerberg said. “It’s not that the metaverse is going to completely replace something that comes before it. But it’s the next platform. In that sense, it’s not a thing that a company builds. It is a broader platform that I think we’re all going to contribute towards building in a way that is open and interoperable.”
That’s why Zuckerberg made his moves so early. He bought Oculus for around $2 billion in 2014. He’s been regularly investing in it every year, refining headsets and stoking the VR game and app ecosystem. And yesterday, he threw down the gauntlet by changing his company’s name to Meta and even changed the stock symbol to the metaverse-like MVRS.
Zuckerberg said a high-end standalone VR system, dubbed Project Cambria, is being developed, as is the Nazare augmented reality glasses. Those projects are aimed at heading off anything Apple has coming to the market.
The right message
While many made fun of this as a waste of money, Zuckerberg aligned himself with allies. He said that the metaverse should be open and not built by just one company. By doing this, he could deflect critics. Rather than have people point fingers at Facebook’s walled garden, Zuckerberg could rally some friends together and point fingers at some party that was even less open: Apple. The message was, “We’re open. We’re all in this together.” The subtext was, “They’re not.”
He said that gaming will be the way that people step into the metaverse for the first time, as gaming has the infrastructure for economies through virtual goods and engagement with fans. That may be an attempt to drive a wedge, as Apple has pretty much said it doesn’t care about game developers, thanks to the IDFA moves, as those game companies have been hurt by Apple’s moves.
Zuckerberg said that privacy and safety have to be built into the metaverse from the start. That is a move to get kids and parents on board. In his announcements, he showed that — through products like Horizon Workroom, Horizon Home, and Horizon Worlds — he plans the metaverse to be a place where we will live, work, exercise, and play.
He also said that VR wasn’t the only way to log in to the metaverse. You could also do so with AR glasses, or use a PC or console or smartphone or any other device you want. It isn’t going to be something for only the elite (like Apple customers). It is going to be something for everybody. This is a populist message and one that matches the views of many open metaverse advocates.
The poisoned name
However, since Facebook has faced a lot of controversies related to alleged privacy invasions, algorithmic bias, favoring profits over the mental health of its users, and antitrust issues, Zuckerberg doesn’t have the high road. His credibility has been under attack, thanks to leaks by the whistleblower Frances Haugen, who exposed toxic business practices.
Facebook’s own cred is also in a tough state. Kent Bye, a VR podcaster, noted in a Clubhouse room that Oculus hasn’t behaved in the most open ways compared to its rival SteamVR. If you want to get cross-platform capability, it has been a lot easier on SteamVR than Oculus.
And so a lot of people looked right through Facebook’s intentions in renaming itself. It seemed like renaming was convenient. It shifted attention to the metaverse ambition, but it also deflected criticism of the Facebook brand. Facebook has a PR problem now, and it faces deeply skeptical observers. It will be hard to win allies, win over lost users, and convince regulators it can be trusted.
The long road
And so the course for Zuckerberg should be to not try to take the high road. He should take the long road. That is, he should really live up to his ambitions and knock the metaverse out of the park. If he delivers the metaverse and Apple doesn’t, it will be free. It will be accessible, and a lot of people around the world who don’t have access to the finest technology will be able to use it.
That is, Zuckerberg should push his business model into a full-scale war with Apple. If he gets the users into the metaverse, the brands will come, and they will give him advertising revenues like he has never seen before. And that will enable him to subsidize his devices and bring them out at prices that everybody on the planet could afford.
And I would go one step further. He talked about the creator economy, about people like streamers who are making a living by being influencers that are courted by brands. He said the goal was not only to create a good business, but to create a full economy for creators and developers, so that they get to share the benefits of the metaverse.
Zuckerberg should not only give away his products and services for free, as he has done in the past, but he should also pay us. He should pay us for giving his social media and his devices our attention.
You’ve heard of universal basic income. Zuckerberg’s company is one of those that could make it happen, paying us to use his devices so that we can make a living in his ecosystem. If Zuckerberg does this and raises the tide for all boats, then we would be happy to give him what he wants in exchange. So far, we’ve been giving away our personal information for far too cheap. We should control it, and sell it back to him.
That’s something that Apple is never going to do. It’s against its business model or its religion. It wants to respect our privacy, but it also wants to command the highest brand status and the highest profits.
But Apple is at risk of falling further behind Facebook when it comes to reaching the most people with the next generation of computing. If Zuckerberg takes the long road, spends his money wisely, and comes up with great devices, he could reclaim his cred and lift many in the world out of poverty. Facebook, or Meta, has a natural chance to be the good guy. It should not drop this ball.
Other forces are certainly at work here, like Google, Microsoft, Amazon, and even Netflix. It’s a complicated war, and not just one involving Apple and Facebook. There are also the game companies like Epic Games and others who favor decentralization, or taking power away from big tech. There are small companies now that are espousing paying us to play games, under the “play-to-earn” banner. And some nation-states may put their feet down in the name of holding onto power.
You can argue with Zuckerberg’s ethics and business tactics. But don’t underestimate him or Meta. The first shot has been fired in the big war.
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