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Trouble in the Metaverse

“Test fast, fail fast, adjust fast.” – Tom Peters

Silicon Valley news this week has been dominated by impending large-scale layoffs at Mark Zuckerberg’s Meta Platforms, which owns both Facebook and Instagram.

The downsizing of the Meta workforce doesn’t bode well for Zuckerberg’s visionary metaverse. The reasons for the question marks hanging over the metaverse are varied and complex, including the broader economic uncertainty in the pandemic era, the sheer size of the metaverse ambition, as well as more ground-level doubts about the willingness of most potential consumers to wear clunky VR headsets.

But the most alarming sign of the multitude of struggles for close watchers of Meta is the steady decline in the company’s share price this year. According to some estimates, Zuckerberg’s personal wealth is down by a steep US$71 billion in 2022 already.

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Mark Zuckerberg was quick to change his Metaverse avatar after criticism of the earlier versions. Will he make big changes to his Metaverse vision and plans as well, as the possibility of failure grows?

At the heart of Meta’s problems over the metaverse reside some old issues about how innovation should be done. Terabytes have been written about this pervasive problem, but the late ‘management god’ Peter Drucker told the world succinctly decades ago: To be successful, an innovation has to be simple, and it has to be focused.

This is exactly where the metaverse, with its rambling size and fuzzy target, may be stumbling.

As the futurist Bernard Marr wrote this week: ‘…no one really knows what the metaverse will look like yet.’ That is a potentially fatal cloud of vagueness over any innovation, but especially one as super-hyped and expensive as Meta’s metaverse.

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The Meta share price has been going steadily downhill this year.

Despite all the confusion, the basic idea of an interconnected VR digital space remains intriguing, if not exciting. But can this be achieved without the competing players working together to create a cohesive experience for users? (While Meta is the player attracting everyone’s attention, Microsoft, Decentraland, Nvidia, and other major companies are all eyeing the metaverse).

Asian economies are moving quickly to take the lead, with South Korea now having a blueprint ready for the local metaverse industry, and India, Singapore and others also putting in place regulations in preparation for what they believe is the inevitable arrival of the metaverse.

The excitement may well be borne out over the next few years. Or everyone – and especially Meta – may need to return to the figurative drawing board to rethink and redesign what the metaverse needs to be.

As always, time will tell.

At MyTreasur-e, we keenly track social, economic, and financial trends that can impact our customers. Our passion for anticipating and managing risk in all its forms is what accounts for our customers’ satisfaction with our cutting-edge treasury and risk management solution.