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Meta global business group VP says the metaverse is a continuum of modern technology

Amid the heavy spending, some experts say it’s possible that a major breakthrough occurs soon.

There has been significant innovation in VR already, says Sarah Ostadabbas, assistant professor of electrical & computer engineering at Northeastern University, so much so that she thinks widespread adoption may indeed be “just one or two killer applications away.”

“With high latency and poor headtracking, previous VR was basically useless,” she said, and added that Oculus has “already overcome these biggest limiting factors.” 

On Monday, Meta will open its first physical store and showroom for VR headset technology, where customers will be able to purchase the Quest 2 headset. It is also gearing up for a higher-end headset, currently referred to as Project Cambria and to be released later this year.

A case can be made that, given these tech advancements, the design side is where there is room for growth, a territory usually owned by Apple (long rumored to be developing a headset).

“It’s been rumored for years that Apple will release industry-disrupting AR/VR hardware,” said David Lasala, team lead, interactive development & XR technology at New York University.

But he says among active players right now, the clear front runner is the Meta (formerly Oculus) Quest 2. The second would probably be the Valve Index. Other headsets of note include the Lynx and Pico Neo. Also worth mentioning: Pimax, Varjo, HTC Vive, and there are still some Windows Mixed Reality activities.

But since Meta isn’t primarily a hardware company, there is significant freedom in the niche to let the best VR developments be used.

“I think they want to build the platform (OS),” Ostadabbas said. “Google got scared when Meta and other social networks locked them out, so they jumped on cellphones to avoid being kept out of these major sources of information. Similarly, Meta has found out the hard way what smartphone providers can do to hurt their business model with one policy change.”

Recent privacy restrictions on ad targeting from Apple and Google smartphone operating systems have cost Meta billions in ad revenue. The company’s CFO estimated the Apple changes could cost it $10 billion in revenue this year.

What is the metaverse and why are billions of dollars being spent on it?

There are cautionary tales about owning the hardware, such as Google Glass, which has found only limited enterprise and industrial applications to date, and 3-D televisions.

Zuckerberg said on the last earnings call that “the best experience will be on virtual and eventually, augmented reality platforms, and especially on our platform like Quest,” but he added that the company plans to make it easy for people to enter the metaverse from more platforms, and “even without needing a headset.”

Whoever wins the hardware battle, if the tech works for consumers, there’s still the question of what people are going to actually be doing in the metaverse, and, really, what’s the point of all of it? Skeptics see hype and rebranding, and not much beyond that. A lot of the hype can be cut through by one word: presence.

“Aside from the immersivity, one of the most interesting differences between the metaverse and the internet is presence — your avatar,” Ostadabbas said.

While sitting in a meeting in the shape of a purple octopus may seem silly (because it is) there is something to be said for the underlying concept. “The internet is a source of information and people explore massive amounts of information without ever leaving a mark. Until you comment, you are invisible. With the metaverse, your avatar means that consumption requires presence, and so even exploration is active and interactive,” she said.

With presence comes Meta’s other promise (pulled along from its Facebook days): community, a word that has seen a lot of its meaning devalued by social media, but there is promise here too within the metaverse in the shape of community without any constraints as to real world geography. Most community building throughout life is tied, for the most part, to a fairly thin range of possibilities (school on one side of thirty, work on the other). “In the best scenario, someone figures out how to recreate this community experience in the metaverse and people’s lives are improved through a greater sense of belonging,” Ostadabbas said.

Chris Nguyen, an experience expert, demonstrates the Quest Experience during a preview of the inaugural physical store of Facebook-owner Meta Platforms Inc in Burlingame, California, May 4, 2022. Brittany Hosea-Small | Reuters

The centerpiece of Meta’s approach is the social platform called Horizon Worlds, and it has said that after building out “the experience, the next focus will be on growing the community.”

At its best, this will allow people to discover themselves more profoundly than ever before, according to Lasala — grow and heal, make art and learn. Grander claims can be made too, though they remain dubious. “I imagine if half the world’s population was meeting and working in VR versus commuting, it could slow the climate crisis,” he said. “But I have not done a deep dive into the carbon footprint of server farms and silicone productions compared to vehicles, so this might be wishful thinking.”

The worst case is easier to figure. Meta is convinced that the business model of today is the bridge to the business model of tomorrow. “It’s a new paradigm for computing and social connection,” Zuckerberg told Wall Street analysts and investors on the recent earnings call. “So over the next several years, our goal from a financial perspective is to generate sufficient operating income growth from family of apps to fund the growth of investment in Reality Labs, while still growing our overall profitability.”

But the metaverse could all very well be just “a cynical money grab used to monitor people at an even deeper level, with AR headsets allowing construction of deep social graphs and recording of interactions in a way previously not possible,” Ostadabbas said.

The algorithms whirr along, creating increasingly controversial stratification of people to amp up clicks and ad revenue, and if this is a business model that sounds familiar, it should. It’s the internet of Facebook and Alphabet, except this time around you’re a purple octopus in an Oculus. In fact, as Horizon rolls out across all platforms, the business will include some shorter cycles “that might resemble a little bit more what we’re used to with apps,” Zuckerberg told Wall Street analysts.

The company received recent blowback from creators for plans to charge high fees for virtual asset transactions.

Mendelsohn stressed that the company’s history is rooted in successful transitions.

“I’ve been at the company almost nine years. We’ve made some very strong pivots before,” she said, alluding to the shift from PCs to mobile, and the shift to Instagram Stories.

The fully realized version of the metaverse is, she said, “some years off,” but she added that it’s a continuum of where the company is today, and clients like Wendy’s that are already using video and ad products, and launched a world in Horizon Worlds with virtual restaurants last month.

“This is laying the groundwork for what I expect to be a very exciting 2030s,” Zuckerberg said.

—By Trevor Laurence Jockims, special to CNBC.com