Why did Meta shift branding away from Facebook in 2021?

The branding change coincided with a broader attempt to redefine the company’s identity amid controversy surrounding Facebook. The optics were criticized as a way to ditch the troubled Facebook brand and introduce a broader 'metaverse' identity. Timestamp: 154 seconds.

Who helped build the metaverse and what happened to him?

John Carmack, a prominent figure in VR development, was tasked with helping build Meta's metaverse starting in 2014. He left Meta in 2022, later criticizing the approach as too glitchy and slow. Timestamp: 317 seconds.

What is Horizon OS and what other Horizon products exist?

Horizon OS is described as the operating system powering Horizon devices, with companion apps like the Horizon Mobile App, Horizon Store, and Horizon Home to manage profiles and social experiences. These were introduced as part of Meta's metaverse product lineup. Timestamp: 210-231 seconds range.

What was the YouTube reference in the metaverse discussion?

Staff discussions contrasted building a 'YouTube-like' experience with a more game-like 'World of Warcraft' vibe, illustrating internal uncertainty about whether the metaverse should be a tool or an experience. Timestamp: 371 seconds.

What monetization model did Meta consider for Horizon Worlds?

One discussed model was the Apple App Store approach: hardware plus software with a cut of each app developed for Horizon Worlds and Horizon Store. This path was described as potentially long-term and not yet proven. Timestamp: 701 seconds.

How does AI factor into Meta's strategy according to the video?

The video notes that AI has become a new focus, with Meta recruiting AI experts and integrating AI into products like voice assistants, but it remains unclear whether this pivot will deliver long-term value or simply be a misallocation of resources. Timestamp: 739 seconds.

What counterexample is given to show VR's potential audience size?

The video points to VRChat as an example where a large number of users can be online simultaneously, suggesting that there is still potential for VR as a technology. Timestamp: 784 seconds.

The Metaverse Only Has 900 Users

ColdFusion

Science & Technology5 min read14 min video

Dec 3, 2025|1,314,464 views|38,262|5,037

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Key Moments

TL;DR

Meta's metaverse dream faltered; Horizon Worlds has tiny daily users and heavy losses.

Key Insights

Adoption friction doomed mainstream VR: high headset costs, complex sign-ups, and the need for a large active network blocked growth.

Internal confusion and lack of a single, coherent metaverse definition hindered progress (tools vs. experiences, platform vs. world).

Reality Labs burned billions with little to show: roughly $70B lost since 2020 and still unprofitable despite hardware sales.

User engagement remained critically low: estimates around 900 daily Horizon Worlds users at best, with tens of thousands monthly.

Brand trust and optics mattered: branding, memes, and controversy undermined credibility and investor appetite.

AI pivot and revenue questions: momentum shifted toward AI, but the long-term monetization plan (ads, in-world economies) remains unproven.

Origins And Ambition Of The Metaverse

The metaverse was pitched by Mark Zuckerberg as the next version of the internet—an immersive, embodied space where you are in the experience rather than merely looking at it. After purchasing Oculus in 2014, Meta embedded the idea into Reality Labs (founded in 2020) and rebranded to Meta in 2021 to signal a broader technology strategy beyond Facebook. The concept drew on sci‑fi tropes like Ready Player One and Snow Crash, aiming to create a digital world you inhabit with others. Yet the ambition collided with definitional ambiguity: what exactly was being built, for whom, and why would people invest hours in a headset again and again? Cambridge Analytica’s fallout loomed, eroding trust and making the rebranding feel like a repositioning of trouble rather than a fresh start. Still, Meta pressed ahead with a multi‑product plan—Horizon Worlds, Horizon OS, Horizon Store, and Horizon Home—hoping a compelling experience and strong network effects would unlock a new internet, even as many questions lingered about feasibility and desirability.

Building Blocks And Internal Uncertainty

Meta laid out a multi‑product strategy to realize the metaverse: Horizon Worlds as a VR social space, Horizon OS to power headsets, the Horizon Store for apps, and Horizon Home as personalized virtual gathering spaces. But internally, the project diverged into competing visions. Some teams saw a YouTube‑like platform; others imagined a broad, World of Warcraft‑style social universe. Zuckerberg even urged employees to live in the future and use the products themselves, but reality on the ground was messy: meetings in the metaverse proved glitchy, onboarding was slow, and simply joining a session could take 30 minutes. There was little consensus on whether developers were building tools or experiences, and staff quotes captured the confusion—highlighting a misalignment between the aspirational roadmap and day‑to‑day product reality. The lack of a unified mission and clear success metrics foreshadowed the later difficulties in delivering a scalable, appealing platform.

The Friction Of Adoption And The Reality Of Use

Consumer adoption faced structural hurdles that were hard to overcome. Headsets cost hundreds of dollars, and signing up for a new social platform in a VR form factor added significant friction. The metaverse depended on network effects: if few people used Horizon Worlds, potential users would rationally stay away. Internal enthusiasm could not overcome the friction of wearing a headset for everyday tasks. Even internal usage showed the mismatch: VR meetings were prone to long onboarding and technical glitches, prompting many to revert to familiar video calls. Platform optics didn’t help either—the meme‑worthy avatar and branding left public perception skewed toward novelty rather than credibility. The broader tech environment didn’t help, either; even Apple’s foray into VR was constrained by price and practicality, underscoring that mainstream adoption was not imminent. Taken together, these adoption bottlenecks created a structural headwind that no amount of hype could easily overcome.

Reality Labs: Money Pit And Weak Metrics

Meta’s Reality Labs became synonymous with a large, persistent cash burn. The unit reportedly accumulated around $70 billion in losses since 2020, with hardware sales not translating into profitability. User metrics for Horizon Worlds remained a concern: by early 2023, roughly 20,000 monthly users with as few as 8,000 daily users were cited, and some observers argued the true daily figure could be far lower (even 900 daily users in 2023). Investors pressed Meta to slow metaverse bets, yet Zuckerberg kept pushing. The company experimented with expanding Horizon OS to non‑Meta hardware in 2024, signaling a pivot toward wider hardware compatibility even as profitability lagged. Across subsequent years, Reality Labs’ losses persisted, highlighting a fundamental misalignment between ambitious software ambitions and the real economics of hardware, platform development, and sustained engagement.

Revenue Dreams And The AI Pivot

From the outset, the metaverse revenue model leaned on an Apple App Store–style ecosystem: Meta would build hardware (Quest headsets and Ray‑bands), software (Horizon Worlds and Horizon Store), and take a cut from every app and experience. Advertising potential was imagined as a major driver in the 3D space—or as brands create worlds and monetize items within those worlds. In practice, this revenue play remained largely unproven, with only scattered brand experiments and a challenging path to scale. As losses mounted, Meta pivoted toward artificial intelligence, hiring top AI talent to bolster real‑time capabilities, voice assistants, and broader AI initiatives across devices. The hope is that AI could improve ad targeting or create new, monetizable features integrated across Meta’s suite. But whether AI alone can deliver a sustainable revenue engine for Horizon Worlds—and whether the metaverse could ever become a profitable platform—remains highly uncertain.

What It Means Going Forward

The horizon for Meta’s metaverse strategy remains unclear, even as the company doubles down on AI. VR hardware appears unlikely to become mainstream in the near term, despite decent hardware quality and competitive pricing. Industry voices, including John Carmack, have criticized Meta’s implementation for being slow and flawed, arguing that the core problem was a misalignment between product design and user needs. Nevertheless, VR technology does have a future, as demonstrated by larger concurrent systems like VR Chat. Meta’s challenge is translating potential into a compelling, accessible product and choosing whether to continue investing in a costly metaverse bet or to pivot decisively toward AI‑driven capabilities that can cross‑sell across its existing platforms. The ultimate test will be whether Horizon Worlds can achieve meaningful daily engagement, whether any viable in‑world revenue model emerges, and whether trust can be rebuilt after years of controversy. Until then, the Horizon project remains a costly detour rather than the next internet.

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Common Questions

Horizon Worlds struggled with adoption and profitability. The video notes a drop in user activity to very low levels (as few as 900 daily users on some estimates) and ongoing questions about Meta's ability to monetize the platform. Timestamp: 50-70 seconds for the initial context, with updates later in the timeline around 593-603 seconds.