The Metaverse has caught the eye of many in 2021. Many companies have deployed related businesses one after another, of which Meta is the most radical. However, the recent plunge in Meta's share price (nearly 25%) has made the market skeptical of the metaverse concept. In fact, recently, there has been news that some big companies have failed in the Metaverse project in the market. This article will let us understand where Microsoft and Meta have fallen.
Microsoft hesitates to continue developing HoloLens
HoloLens, a pair of mixed reality smart glasses developed and manufactured by Microsoft, has now been iterated to the second generation. HoloLens initially shipped on March 30, 2016 for developers in the US and Canada, priced at $3,000 at the time. Since then, companies such as Samsung and Asus have successively proposed to Microsoft to cooperate with Microsoft to produce mixed reality products around HoloLens. On October 12, 2016, Microsoft announced that HoloLens would be available for purchase globally.
The HoloLens 2 was announced at Mobile World Congress (MWC) in Barcelona, Spain on February 24, 2019, with a pre-order price of $3,500.
However, compared with virtual reality related products on the market, the disadvantage of Microsoft HoloLens is the high price. For example, Meta's latest Oculus Quest 2, launched in 2020, costs only $299, less than one-tenth the price of Microsoft's HoloLens. And the resolution of Oculus Quest 2 is 1832×1920 per pair of glasses (roughly equivalent to 4K high image quality). It can be said that Meta's Oculus Quest 2 has a great advantage in terms of cost performance. Oculus Quest 2 was also rated as the most worthwhile virtual reality device by foreign authoritative evaluation websites.
Microsoft needs to improve the price/performance ratio of its products in order to gain a foothold in the virtual reality product market. In addition, Apple is also rumored to be actively working on a virtual reality device, which is expected to launch in 2022. Apple, which is good at combining software and hardware, is bound to be a formidable opponent when it enters this field in the future.
On February 3, 2022, an article in the well-known foreign technology media "Insider" stated that the Microsoft mixed reality headset HoloLens 3, which has been delayed for a long time, was revealed by company insiders that it was stillborn.
On February 4, Microsoft spokesman Frank Shaw immediately denied that the HoloLens project was dead. Microsoft's project lead, Alex Kipman, said on Twitter, don't take the news you read online, and it was previously said that Hololens 2 was also canceled.
According to the Insider report, many internal Microsoft employees have confirmed that it will cooperate with Samsung's headset in the future, and the new Microsoft MR headset is likely not a Windows-based cloud computing device.
Microsoft's HoloLens device was a hit when it made its public debut in 2015. However, being caught up by Oculus in the later period and the market's tepid attitude towards HoloLens devices may have made Microsoft a little frustrated.
In total, HoloLens has sold between 40,000 and 60,000 devices since its launch in 2016. At its current price of more than $3,500, the HoloLens only generates $210 million in total, which is paltry in Microsoft's $168 billion in annual revenue. Alex Kipman has said in 2021 that Microsoft intends to release a consumer version of HoloLens. However, Microsoft is mainly facing the enterprise market today, which makes Microsoft inexperienced in facing the consumer market, which leads Microsoft to give up the idea of HoloLens.
At this time, Samsung said that Microsoft provides software and Samsung produces hardware, which is the best combination, which may become the next WinTel combination (Microsoft provides software, Intel provides hardware). It also made Microsoft hesitant to build HoloLens.
Microsoft has also changed the design and details of the HoloLens throughout its development. According to the Wall Street Journal, more than 100 people have left Microsoft's mixed reality department in the past year, many of whom have gone to Meta, including a 20-year Microsoft veteran, mixed reality researcher Don Box and a 26-year veteran. Dave Reed, an experienced computer vision distinguished engineer.
Microsoft previously cooperated with the U.S. military to develop a custom product based on HoloLens technology for a contract worth up to $22 billion. The ideal is very happy, but the reality is very skinny. Reports from the Pentagon's test office suggest that Microsoft's system has not yet demonstrated the ability to make combat goggles.
If the HoloLens project does end, Microsoft could put engineering resources on other projects, including Bondi, which was built in partnership with Samsung. Unlike HoloLens, Bundy will use a Samsung phone as its computing platform.
It's still unclear how exactly Microsoft's HoloLens project is going. But what is certain is that Microsoft has encountered a lot of trouble on the road to develop the HoloLens project, and there are still many problems to be solved.
Meta's digital currency launch ends in failure
On January 27, 2022, it was reported that Meta (formerly Facebook) was selling its stablecoin project Diem , and Federal Reserve member bank Silvergate Capital would acquire Diem and its technology assets for $200 million.
Libra (later renamed Diem) is a blockchain-based permissioned payment system proposed by Facebook. In May 2019, Facebook confirmed the layout of cryptocurrencies, and on June 18, 2019, the project was officially announced as Libra. The plan is to release in 2020, but only basic experimental code has been released.
There is an association behind the plan, which consists of major companies. Each association member needs to first inject $10 million to support the value of Libra, but the plan has never been approved by regulators. On July 15, 2019, Facebook announced that it would not launch the currency until all regulatory issues were met and Libra received “appropriate approval.”
Global central banks, finance ministers, lawmakers, and many privacy protection agencies around the world have questioned Libra and listed multiple issues related to Libra, including money laundering, terrorist financing, and financial stability.
In the end, many companies withdrew from the plan due to regulatory obstacles. In October 2019, multiple companies left the Libra Association: PayPal left on October 4, followed by eBay, Mastercard, Stripe, Visa, and Mercado Pago on October 11, and Booking Holdings also on October 14 day to leave.
As of September 2021, only a few companies from the association remain in attendance.
Table: Libra Association members (as of September 2021)
Founded in 1988, Silvergate Capital is a leading provider of innovative financial infrastructure solutions and services to emerging and expanding digital currency industry players. Silvergate Capital leverages the expertise of its technology platform and management team to develop solutions for many digital currency exchanges and investors around the world.
Headquartered in San Diego, Silvergate Capital is a California-chartered bank that has been profitable every year for the past 21 years. Silvergate Capital has been serving digital currency clients since 2013. Today Silvergate Capital has more than 700 digital currency and fintech clients who use Silvergate Capital's platform every day to grow and expand their businesses.
Silvergate Capital has actually reached a strategic cooperation with the fading Diem in 2021, planning to launch a U.S. dollar-pegged encrypted stablecoin. In May 2021, Meta announced the transfer of Diem's main business from Switzerland to the United States. At the same time, Meta also announced a strategic partnership with Silvergate Bank, which will be the exclusive issuer of Diem’s USD stablecoin and will manage Diem’s USD reserves.
In December 2021, the founder of the Diem project, David Marcus, left Meta. It can be said that Meta has hit a wall on the way to launch its own metaverse currency.
On February 3, 2022, Facebook’s first financial report after changing its name to Meta was a disaster. Meta’s stock price plummeted 26%, and its market value evaporated by more than 200 billion US dollars.
Meta stock price trend
Meta's latest quarterly financial report shows that its Facebook community application software daily active users fell for the first time in a row (daily active users DAU, from 1.930 billion to 1.929 billion), and the much-watched Reality Labs division, the loss is reached $10 billion. While there was good growth in other areas, such as profits and margins, the drop in users led investors to believe that Meta had entered a phase of slowing growth, leading to the company's biggest one-day drop in 18 years.
Zuckerberg, the founder of Meta, firmly believes that the next generation of the Internet is the Metaverse. While some in the market were skeptical, Zuckerberg poured money into the Metaverse. Meta spent more than $10 billion on metaverse construction last year. Zuckerberg said that he hopes to spend more money to continue building the metaverse in the future, but the investment in the metaverse will not see returns in the near future.
For a vision that will cost the company billions or even tens of billions of dollars over the next few years and may never be realized, getting others and the market to fully believe in him is no small challenge. For a variety of reasons, Meta's stock price has been sold off.
On December 10, 2021, Meta officially opened its VR social platform "Horizon World". Horizon World is already available on the Quest 2 and Rift stores for free download. To log in to Horizon World, you need an Oculus Quest 2 device owned by Meta.
"Horizon Worldn" started beta testing in 2020, during which time it attracted many VR users and developers to create 3D content such as mini-games for it. The platform is characterized by providing users with easy-to-use tools and a low threshold for developing content. In order to further enhance the VR social experience, Meta has also added freely configurable security measures in Horizon World, such as reporting, muting, blocking, and more.
However, the avatar without legs gave people a bad impression of it, and many people even gave negative reviews, thinking that the experience was very bad.
David H. Freedman, one of Newsweek's authors, experienced Horizon World and felt that it still had many problems to solve. The foreign technology website "Kotaku" thinks that "Horizon World" is a strange experience, and the overall atmosphere feels less interesting and relatively unappealing. The relative lack of security features on the platform, as well as the mismanagement of misinformation and hate speech, needs to be further addressed.
Meta's future in the metaverse is not destined to be smooth sailing. In addition to the above problems, there will be more problems in the future that Meta companies need to overcome one by one.