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The Metaverse Is Still the Next Big Thing, Meta Insists

(Bloomberg) -- Nick Clegg, head of global affairs for Meta Platforms Inc., took to the metaverse on Wednesday to insist that the future of computing will take place on that still not-quite-yet-defined virtual world.

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The metaverse in this case was a virtual space in Meta’s Horizon Workrooms, where Clegg, logged in from London, spoke with a handful of reporters who were wearing borrowed Meta Quest headsets in Washington. The group appeared as torsos seated around a large wood table, though only Clegg’s avatar actually looked like him.

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Wearing a virtual blue blazer with a red and blue pocket square and a white collared shirt, Clegg promised that the clunky experience of today’s metaverse applications will eventually be replaced by a more user-friendly experience that isn’t so heavy on the head — and presumably includes virtual legs.

“We’re going to stick with it, because we really believe, all the early evidence suggests, that something like this will be the heart of the new computing platform,” Clegg said. “But it’s going to take a while.”

Clegg’s commitment to the metaverse stands in contrast with the rest of the tech world’s relative loss of interest. Excitement over virtual realities has been replaced by zeal for artificial intelligence, and the burgeoning startup sector springing up around it. With tighter economic conditions forcing the tech industry to focus resources, several companies have pulled back on investments in virtual experiences.

In February, Microsoft Corp. killed its industrial metaverse project as a part of its layoff of 10,000 people. Microsoft has been an ally for Meta’s efforts, with Chief Executive Officer Satya Nadella appearing at the social media giant’s product event to tout bringing together virtual reality technology and its suite of workplace productivity tools like Teams, Word and Excel. Just this week, Walt Disney Co. cut a division that was working on its metaverse strategies as part of its own broader workforce firing.

Clegg on Wednesday said there are two main ways for Meta to capitalize on its investment in virtual worlds: advertising and commerce. Harnessing user data to target very specific ads is what made Meta’s Facebook and Instagram platforms enormously profitable, but it remains to be seen how much people will be willing to spend on virtual goods or use VR tools for shopping.

Meta is walking a fine line with investors when it comes to its commitment to the metaverse, the far-off technology that inspired the new name for the company formerly known as Facebook. In 2022, when faced with three consecutive quarters of revenue declines — contracting for the first time ever — CEO Mark Zuckerberg held fast to his expensive commitment to build out the metaverse. Investors punished that decision, leading the stock to its worst year in history.

Then, in February, Zuckerberg made a stark about-face, declaring that 2023 was the “year of efficiency,” with a focus on near-term problems. That meant firing 10,000 people, on top of the 11,000 let go last year. The cuts impacted all teams, including the Reality Labs division, which works on the metaverse. This new tone was rewarded with a share price trading at levels not seen in a year.

Some communities, like gaming and fitness, have been quicker to embrace virtual worlds, but Meta believes there’s untapped potential for applications in fields like education and health care, Clegg said. He also stressed the company’s commitment to involve researchers, civil organizations and other companies in the development of the metaverse to create an experience that allows “real creativity, real ingenuity and real just pleasure and enjoyment and delight to flourish.”

In the virtual room on Wednesday, when one reporter asked a question, three of the avatars on the screen moved their mouths, as three different headsets in the physical room in Washington picked up the voice of the same person talking. The view outside the virtual room was lovely, with imaginary green mountains towering over a blue lake. And virtual arms darted out in front of avatars as reporters tried to peer under their headsets to write in physical notebooks.

“I just really want to stress that we’re going to look back on the headware we’re wearing now and think, ‘Gosh, do you remember the days when you would wear a Quest Pro?’” Clegg said. “We’ve always been very clear that we’re in this for the long haul. This is not going to happen overnight.”

--With assistance from Lucas Shaw.

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