super jili My Sad, Lonely, Expensive Adventures in Zuckerberg’s V.R.

Where is all the money going?

Meta, the corporation formerly known as Facebook, has been investing staggering sums in what it calls “the metaverse,” the virtual-reality wonderland that Mark Zuckerberg argues represents the future of human connection.

But to me the most interesting questions about the metaverse are less sociological than financial. When I don the company’s latest V.R. headset, the $1,500 Meta Quest Pro, and parachute into Horizon Worlds, Meta’s virtual theme park, it isn’t the future of human communication that I’m left wondering about. Instead it’s the state of Meta’s accounting department.

Zuckerberg’s Xanadu is a cartoony wasteland; everywhere you look, billboards promise big fun — there are concerts, game rooms, open mics, dance halls, bowling alleys, escape rooms and much more. But nearly all of it is a tease. Most of these places have been left for dead; you’ll be lucky to find many venues populated with more than a single other avatar. Every corner of Meta’s metaverse reeks of creepy abandonment, like the post-apocalyptic United States of the Fallout games. And as you wander about the forsaken place you can’t help picturing all those billions being set on fire: Zuckerberg spent all that dough … on this? How? Why? What is he thinking? Is he being blackmailed?

The amounts are stupefying. In an earnings release last month the company said Reality Labs, its metaverse business, had burned through nearly $4 billion in the latest financial quarter. The division spent more than $10 billion so far this year, on pace to exceed the $12 billion it spent on the metaverse last year. In just a few years, Meta’s V.R. investments have exceeded what the United States spent on the Manhattan Project (adjusted for inflation).

Sure, lots of tech companies pour boatloads into new initiatives. Netflix has invested tens of billions of dollars in movies and TV shows. Tesla is spending mightily to build out its car and battery manufacturing operations. And every year Amazon spends billions and billions on data centers and fulfillment warehouses.

But what sets Meta’s spending apart is how amazingly little it has to show for the money. At least Netflix’s billions got us “Stranger Things” and “Squid Game”; Tesla’s money is revolutionizing the car industry, and Amazon’s endless investments let me get same-day shipping on toothpaste and toilet paper. Meta’s V.R. spending, on the other hand, seems barely more fruitful than shoveling cash into a furnace. Reality Labs’ $12 billion in costs resulted in just $2.3 billion in revenue last year; so far this year revenue is just barely higher, while costs are up by more than a quarter.

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