Well, that didn’t take long to resolve. Two short weeks ago I wrote about the two possible outcomes for Meta’s trajectory in VR, given the company’s recent pivot away from any and all responsibility to manage what goes on in their own premises – Facebook, Messenger, Instagram – as Zuckerberg fell in line with the newly formed Just-Us League of America, the team of powerful tech billionaire sociopaths and misfits you know and love, trying devious tricks to make America officially become their own 2.27 billion acre Arkham Asylum1.
I likened Meta’s VR to being in a chrysalis state right now in terms of what the user experience will ultimately turn out to be, and who the market will ultimately cater for. It could either be butterflies that emerged from the cocoon – a nice, happy, open and friendly future that continues to support the growth of VR, at least in the short term2. The second possibility is that wasps emerge instead, and Meta’s VR (and consumer VR in general, by association with and due to Meta’s significant market lead) becomes a hellhole of manipulative free-to-play games, focused around building out Meta Horizon, where Meta can reap the most rent and exert the most control.
I said in the piece that I wasn’t too worried about Meta coming to juice VR’s customer base just yet, because the market was still in a growth phase. I made the entirely predictable prophecy that the wasps were probably on their way, we just didn’t know when.
Now we do.
On 3 Feb, a leaked internal memo to all Reality lab staff, Meta CTO Andrew Bosworth laid it out clearly —
“2025: The Year of Greatness
Next year is going to be the most critical year in my 8 years at Reality Labs. We have the best portfolio of products we've ever had in market and are pushing our advantage by launching half a dozen more AI powered wearables. We need to drive sales, retention, and engagement across the board but especially in MR. And Horizon Worlds on mobile absolutely has to break out for our long term plans to have a chance. If you don't feel the weight of history on you then you aren't paying attention. This year likely determines whether this entire effort will go down as the work of visionaries or a legendary misadventure.
On paper 2024 was our most successful year to date but we aren't sitting around celebrating because know it isn't enough. We haven't actually made a dent in the world yet. The prize for good work is the opportunity to do great work.
Greatness is our opportunity … There is a very good chance most of us will never get a chance like this again. … You should be doing the best work of your career right now. You should be pushing yourself to grow where needed and doubling down on your strengths. When you look back on this time I want you to feel like you did everything in your power to make the most of it. …
The path is clear. You don't need to come up with a bunch of new ideas to do this great work. Most people in the organization just need to execute on the work laid out before them to succeed.
I will close with an Arnold Glasgow quote: ‘Success isn't a result of spontaneous combustion. You must set yourself on fire.’
2025 is the year. Let's be on fire.”
An inspiring mission that sounds like it could mean a dream of a year ahead if you’re working at Reality labs! Bosworth’s tone and language are all a bit tough-push motivational-eeeuw of course, and If I were a Meta employee I think I would be delighted to be told in fluent corpo that I should stop trying to apply my unique skills and creativity to improve the work in front of me, just put 100% of my effort into delivering the assigned task I’ve been told to do. The thought did occur to me that this is exactly the sort of thing Llama should be able to do, to actually free up space for human creativity rather than take it away. And then I chuckled at myself, of course.
But of bigger significance for me was the reveal that the future of Meta’s hugely costly VR effort ($69 billion on Reality Labs since Q4 2020, $19.9 billion in 2024 alone) may be completely dependent not on it’s own performance or success metrics, but those of the smartphone version of Horizon Worlds.
The deadline says time is running out, but the fact that success is tied so completely to engagement with the mobile app, rather than engagement with Horizon in VR, also says to me that Meta has had enough of subsidizing headsets and trying to build a healthy ecosystem. It tells me that they’re putting all their eggs, VR-shaped ones included, into one low-fidelity, under-performing-social-app basket, and making one final push to get as many young users into Horizon Worlds as they can in the next quarters. It does sound like they’re letting go of a few balloons they’ve been gripping onto tightly, having realised they’re slowing them down rather than lifting them towards their destination. Drop everything that’s not essential; nothing else really matters in the final run for the end goal. A goal which I do believe was once much more genuinely tied to building a rich and aspirational VR ecosystem (albeit to gather VR eyeballs in their own METAverse), but has, over the last year or so, boiled away the skin, then the fat and then the actual meat of those ambitions, to leave the bare bones of the long-game exposed: capture and retain an active audience at huge scale, so they can in turn monetize, advertise and retain control of them entirely within the Meta enclave.
Not a surprise to most, of course. But as I’ve written in the past, it’s long been a worry to me that even though this is just another capitalist long-con game plan coming into focus for those who hadn’t yet noticed the sleight of hand, we as consumers and developers who have invested heavily in supporting Meta’s ecosystem are still going to get badly stung by this. Getting out of the pool takes time. There’s going to be lots of users that love their Meta headsets today, but might actively hate them a year from now because of how much the experience inside has changed. And that will bring even rougher times for the public perception and trust towards VR in general.
We can’t blame businesses for having a business plan, and Zuckerberg’s huge investment in propelling VR over the last decade has been an immense net positive for the industry. It has grown the commercial western VR market far more successfully and extensively than any other headset manufacturer. Credit where it’s due I guess.
I’d like to take a quick aside here to share a fun little anecdote, and point out something I find hilarious. Some of you may know by now that a ‘quick’ aside isn’t likely from me - but it’ll be interesting to see how I get on. Wish me luck.
Meta bought Oculus on March 25, 2014 – almost 11 years ago. It’s a date I remember because it was a few days after Mark Zuckerberg visited the major VR stands at GDC for a private evening showing. Everyone had to clear the floor except the essential staff and he had the run of the stands that had stayed open for him. Like Michael Jackson attending Disneyland. Zuck was still a bit of a rock star himself at this time, and hadn’t gathered nearly as many thumb-downs in the general public’s opinion that he has now. Most of Facebook’s most damaging scandals still lay ahead, but we’d seen a few, and everyone had seen The Social Network by this point as well, so plenty of people were already sitting on the fence, or climbing up onto it. Zuck came over to the PlayStation area after trying the new Oculus DK2 demos, and was keen to try some of our PlayStationVR demos. I didn’t speak to him myself, but my understanding was that he was complimentary about our hardware and demos and seemed impressed with the levels of immersion our demos managed to evoke. Apparently he didn’t have a strong reaction to being attacked in our shark cage demo which was freaking other people out, but that makes sense; the tech industry is swimming in sharks, and he’s a ‘The Meg’.
The next day was all abuzz because the word was already out on the grapevine that Facebook were going to be buying Oculus. The $2 billion official announcement came a couple days later. We’ll never know if his 30 minutes in PSVR influenced Zuck in any way to make the deal with the Oculus team, or if it swayed the price in either direction. We used to joke internally that the show floor demos from our teams (which were pretty strong I think, especially for a hardware reveal) probably bumped up the general valuation of VR in Zuck’s mind, and figured that the Oculus guys owed us at least a slap-up meal.
No complaints though. As baffling as it seems now, this was actually a beautifully friendly and co-operative time across the nascent consumer VR scene, even between our (rival) teams because we all benefited if the VR tide rose, so sharing information, data points and hypotheses was common, especially at conferences. Oculus welcomed myself and plenty of the other PSVR guys from UK, US and Japan to their annual Oculus Connect conference every year, which was an amazing, unique event – at least for the first two years. By Oculus Connect 3 in 2016, Oculus founder Palmer Luckey was a no-show at the conference, the Facebook press briefing saying that he wouldn’t be attending because he didn’t want to distract from Mark Zuckerberg’s first hosting appearance.
That this seemed like a half-truth at the time was the major talking point in the conference corridors. By Oculus Connect 4 the founder’s departure after an extended garden leave was announced, presented as being the result of the fallout from a $10,000 donation Luckey, a Trump supporter, had made to an anti-Hillary Clinton group. That seems like a quaint scandal in today’s times, of course, but he was promptly pushed out of the picture, and the remaining OG Oculus team followed suit over the next few years.
But here’s where I laugh. Zuckerberg himself has recently made a donation 100 times that amount to pledge his fealty to Trump. Palmer Luckey has been vocal about the absolute hypocrisy of this, of course, but these days he’s become far wealthier from taking his golden parachute and founding Anduril, his autonomous drone-focused weaponry company which is under contract with the US military and currently valued at $28 billion and rising. Very few of his early VR fanbase still love him enough these days to have got upset about the injustice of it all. But I did meet Palmer a few times back in the day, and he showed a wicked sense of humor for sure. I imagine he absolutely reveled in the fact that Zuckerberg has had to pay such a steep ticket fee to be allowed into the Trumpiverse.
Anyway, back to Bosworth’s leaked email. What happened next?
Upload VR were quick on the case. 2 days after the leak, they posted an illuminating survey analysis by Henry Stockdale, which is well worth reading in full.
It paints a bleak landscape from multiple developer survey responses, making it clear that this push has already begun, and that developers were already feeling devalued and pissed off by what Meta has been doing. Some of their most unpopular decisions, like throwing their store content and Applab content3 into one unwieldy storefront with no separation between ‘premium’ and ‘free’, are directly causing developers to find they’re failing significantly against sales expectations for existing titles, and causing new, premium titles to struggle for air. Crappy dollar store meme games, seemingly coded in an afternoon, had absolutely swamped the front pages of the store, pushing premium titles into the background.
(I checked over this last weekend and Meta have made efforts to address this already, and dialed back how much of the lower tier stuff gets exposed on the front pages, but search a little further and you can still easily unearth too many tons of the stuff. Getting noticed was never easy for developers after Meta abandoned their tightly curated approach a couple of years ago, but it’s exponentially harder now because of the crowds).
This is just one of the many issues raised – the overall picture one could paint (use Open Brush, it’s free AND great) is that Meta have decided that it’s do-or-die time for Horizon and their interest in VR, and Free-to-Start is the business model they’re most likely to succeed within the time frame they’ve set.
It’s a depressing read, but it does makes sense as a pattern of behavior. We’ve already been seeing a big shift in this direction over the last couple of years from Meta, which is part of what prompted my earlier post. The surprise toy inside this egg for me is that Meta appear to be setting a deadline for reaching paradise, putting an end-date on their VR efforts. Since King Zuck alone determines the company’s policies and future, it does look like his highness is perhaps finally running out of steam with his push to capture the market. He’s always made it clear that it was going to be a long play.
The running theme of the engineering side of each Oculus Connect has been to give an honest appraisal of where they were right now, and when they expected the technological breakthroughs necessary to let them build the METAverse. Predictions of 5, 10, 15 years into the future and Meta’s endless and unapologetic spending on Reality Labs certainly made it seem like Zuck would stay on the horse, no matter how much it bucked. But after moseying along for a decade spending somewhere between $80-100 billion along the way, it does seem like he might be finally getting saddle-sore and weary of endlessly pioneering towards a destination that doesn’t really exist yet, one that Meta itself is largely building brick-by-brick. Plenty of big pioneering dreams were hit by harsh reality on the way to Oregon, after all, and history shows countless examples of pioneers abandoning their original plans in favour of settling and flourishing amongst the opportunities they discovered along the way. Tapping into the huge (85m+ daily users) Roblox age range, who are happy to spend hours in low-fi, low-priced and high-fun VR must seem like rich and fertile soil to put down new roots, and a good alternative to endlessly pushing the wagon train onwards and having to lay the trail which those who follow will get to use for free.
The very next day after the survey analysis was published, Meta responded via a post on their developers blog, with VP of Metaverse Content Samantha Ryan clarifying the platform’s position. You can read the full article here if you fancy.
The post is illuminating about where Meta see the value proposition of their ecosystem. Ryan explains that ‘young people’ are a growing market share and contributing to the rise of free-to-start and free-to-play titles, as well as using Horizon Worlds - which is also (currently) free to use.
“This shift signals a growing opportunity for new business models...(it) has changed some of the tenets of our ecosystem that were previously taken for granted… To reach younger audiences looking for fun, social, free-to-play experiences, we’re expanding ways you can build and monetize in Horizon Worlds… We expect free-to-play (F2P) to become a broadly viable strategy for developers, who up until now have relied almost exclusively on premium apps. But we don’t think F2P will replace premium apps — both models are likely to coexist. That means we expect premium titles like I am Cat and Five Nights at Freddy’s: Help Wanted 2 will continue to succeed alongside great F2P content like Animal Company and Yeeps: Hide and Seek!”.
It reads as a positive but it actually sends a pretty clear signal as to what business models they’ll be supporting and helping in future, and which ones they won’t. Ryan acknowledges the importance of ‘premium apps’, but the four example titles here (2 premium, 2 free-to-start) are all squarely, unarguably kids games.
They do name-check two obviously more mature titles, Thrill of the Fight 2 and Contractors Showdown, earlier on but only in context of the sales performance they’ve shown for Meta, and to frame AAA as being higher expectation titles for customers. Both are independent titles, and while great games, you could argue that neither would really be classed as AAA by any traditional console metric – be that development budget, critical acclaim, marketing exposure or player count. They’re also both multiplayer focused. Meta has funded or supported plenty of higher profile AAA titles over the past few years – Resident Evil 4, Asgard’s Wrath, Assassins Creed, Batman Arkham Shadow and others, mostly single player adventures – that Ryan could have pulled from but didn’t. This acknowledgement arrives during a section on the previous history of Meta’s ecosystem, anyway, and doesn’t toe anywhere close to the standard soft-soap lines we’d expect to hear; that such titles are valued, loved, important for the future of VR, yaddadi-yaddadi-yadda.
Reading between the lines, in a piece delivered to anxious developers who have seen the revenue from their premium titles drop sharply despite the surge of new users that arrived over the holiday season (where Q3/3s were the No1 selling games console on Amazon US, as you’ve probably heard), many devs will see this as a hearty warning to get on the free-to-start train that’s soon to depart, or else they’ll get left to make their own ways from this point forwards. If your game’s not on Horizon, and it’s not free or free-to-start, it will be harder. Meta won’t keep anyone from putting their game on the store and taking their 30% slice of any sales, of course, but it feels like they’re not going to work too hard to help you. The premium VR space is something they’re likely to leave to survive on its own from this point forward with little in the way of funding, marketing support, or store-front exposure. It’s no longer the route they’re taking. If your premium game can keep up then yours is a good wagon to be in the train, providing 30% of it’s benefit to Meta while you travel together. Welcome! If it breaks a wheel or gets stuck crossing the ford though, they’re probably not going to throw you many ropes to help, and they’re not going to get delayed addressing your problems. They won’t waste any more time; they’re forging ahead to their destination. I don’t believe they’ve changed that destination in long time, either. Rather that they’ve decided now is the time to just make a bee-line (wasp-line?) towards their long-time goal. Full speed ahead, damn the horses and don’t spare the whips.
In business terms it makes sense for Meta to go for it at this point – with the AI spectacles sector growing fast for them and representing a future all-day wearable rather than a home-based entertainment device they couldn’t expect to be used more often than the average console, the need to keep going hard in VR just isn’t there anymore. For capturing eyeballs, the Ray-Ban glasses are already proving an easier sell with more obvious use cases for many grown-ups and is a step closer to Meta being able to replace smart phones (a sector in which they must pay rent to rival platform holders to access) with a device they can control and monetize at every strata of the vertical, and which is still keeping them heading towards their metaverse destination. And of course it’s not like Meta’s VR will go away, or that they can’t change lanes again later. The current platform will likely acclimate itself to the younger market over the next couple of years, giving the tech some space to grow more slowly (and at less expense to Meta) as this young market ages into maturity and their expectations rise.
Meta placed themselves in an awkward position when they pivoted from PCVR and went all-in on untethered mobile VR half a decade ago; they’ve made some truly impressive leaps and pushed what’s possible in a standalone headset and really accelerated the evolution of that hardware technology incredibly well. But mobile VR, in performance terms, has always trailed a ways behind PCVR and console VR, and those platforms are out there as a constant point of comparison. As good as the Quest3 hardware is, and as slick as a lot of the games now look, a side-by-side comparison with the other contenders almost always leaves them in a distant second place in terms of graphical quality, performance, haptic feedback and so on. Like having a better-looking older sibling (speaking from experience here - hey Rich!), it’s a long shadow you can never escape from, and delivers a sting you feel every time you’re compared. Meta’s standalone headsets, for all their wondrous qualities, miraculous architecture and attractively high value at their pricepoint won’t ever be able to out-perform or out-shine their rivals on those terms, so inevitably they’ll struggle to ever capture that premium audience.
And while Quest is a popular headset for PCVR use, that’s worse still from Meta’s POV - because they’re losing money selling a discounted headset that won’t be used within their ecosystem, minimizing the chance of them making their money back on that acquisition cost. Getting PCVR users to buy some standalone titles and spent time using the device within Meta’s ecosystem is only likely to work by luring them with exclusive titles they can’t play at all on PCVR, and those titles tend to be the most expensive showpieces to create. Meta have spent years trying this. Batman: Arkham Shadow has sold 1 million copies in 3 months, for example, which is very decent for VR. But plenty of those will have actually been pack-in sales (the game came free with the purchase of Q3/Q3s headsets). Even if they were all genuine £40 sales, that wouldn’t look to cover the development costs for a AAA quality title in VR these days, probably not even close. There’s only so many of those Meta will want to finance, especially if it’s not those titles that are actually growing the market.
So here we are. I’m very worried for the many, many developers out there who are going to struggle over this coming year, who are either going to have to pivot their game or app in a direction they might not ever have wished for, or will have to stay the course despite the change in weather. And if they do keep up and find their paradise, they may struggle to find a sunny spot to get established, on what might quickly become a rocky, sewage-tainted beach that’s abuzz with out-of-control kids, crying and screaming and swearing as they get stung by wasps and hunted by predators, with nobody watching them or looking after them. It’s likely to be a grim future ahead.
And as someone whose passion -and livelihood- is in helping developers to elevate their VR apps and games to the highest standards, I’m worried for me, too. I care about VR’s future and I just really wish it had been butterflies. I’m sad and disappointed. But I’m honestly not surprised.
The man called it. 2025 is the year. We’re going to be on fire 🔥
Until next time,
Jed
Jed Ashforth has been working in the games industry since 2002, and working with VR, MR and AR apps since 2010. He has too many headsets and not enough time. If you’re interested to find out more (or even bring him on board to help you) you can reach him, and check out more of his work and articles, at www.realisedrealities.com.
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I’ll be honest, I couldn’t crack the comedy matchups for those in the League because I kept getting stymied by Musk famously fancying himself as a Tony Stark-alike, but in this DC analogy (the Justice League are DC characters and they’re ripping up Washington DC - it had to be DC not Marvel) I struggled to work in the Justice League’s equivalent to Iron Man. Like, it’s obviously Cyborg, but that’s already Zuckerberg. And of course, each member is rich, ridiculous and so completely up their own arses (that’s ‘asses’ in the US) they long since stopped being able to see the real world anymore - so really I guess they’re all just Booster Gold anyway. Anyway, the whole team makeup fell apart in my head. Please feel free to figure it out for me in the comments.
At least for a while, until the growth stops and the business model switches to extracting increasing value from your existing customers until you’re bleeding them as dry as you can get away with.
Applab is/was an enormous bucket of mostly amateur or early access offerings that were not considered ready to appear on the Meta Store itself; some gemstones to be found for sure, but mainly janky free / monetized clones of other titles, often broken, unfinished or simply troll-ware. Meta placing everything into their previously curated store has been likened to a high street Apple Store giving over 3/4 of their floorspace to a flea market.