This analysis was first published in SvD Näringsliv, in Swedish, on October 12th, 2022. This piece was translated from Swedish by Claude. Some phrasing may differ from a human translation.

The metaverse bet is costing billions — and prompted Facebook to rename itself Meta. The stakes couldn’t be higher, which came through clearly in the pre-recorded message that opened the company’s big developer conference.

Mark Zuckerberg, Meta’s founder and CEO, had a clear message for viewers as the company’s developer conference kicked off on Tuesday evening Swedish time. The metaverse — the three-dimensional world into which Zuckerberg has poured both his prestige and billions of dollars — deserves your belief.

The shift has permeated the company so completely that they changed their name, from Facebook to Meta. Giving up any time soon is simply not an option.

This also explains the slightly desperate, over-eager tone of the opening pre-recorded presentation. Meta needs this massive bet to pay off, and for that to happen, it needs to convince the world’s developers to start building on its new platforms. That the sales figures for select developers were among the first things mentioned was no coincidence. The message was clear: there is money to be made here.

Launching a new tech ecosystem for developers, companies and consumers is notoriously difficult. When Microsoft tried to launch a new mobile operating system in 2015 — Windows 10 — they spent hundreds of millions just convincing app developers to come on board, on top of billions in development and marketing costs. And that was for an established product category — a smartphone operating system — that everyone understood. It still failed, and the project was shelved just two years later.

What Meta is trying to do now is significantly harder. They need to explain why anyone would want to put on a large helmet-style headset and transform into an animated version of themselves. To make things even more complicated, they also need to build the hardware that makes it possible.

The question is entirely fair. Listening to Zuckerberg and his executives, it is all about creating meetings where you feel more “present” and can more easily “express yourself” — a “social” space where you can meet people, play games and work. The presentation featured Microsoft CEO Satya Nadella, who has this time decided to support someone else’s ecosystem rather than build his own. Soon you will be able to use the Office suite in a three-dimensional world. It is hard to believe that was top of anyone’s wish list, though.

Internal analytics showed that not even Meta’s own employees were using the product they were working on.

Even those closest to the project have started to doubt. Internally at Meta, the big metaverse project has reportedly — according to the New York Times — come to be known by the acronym “MMH”: “Make Mark Happy.” Keeping your boss happy is likely a powerful motivator at many companies, but as a business strategy it tends to leave a great deal to be desired.

In a leaked memo, Meta’s head of metaverse Vishal Shah urged staff to spend more time in the company’s flagship VR product, the game Horizon Worlds. Internal analytics showed that not even the employees working on the product were actually using it. Shah summed up the problem in a simple question to his colleagues: “If we don’t love it, how can we expect our users to love it?”

Second Life — influential but only modestly successful — launched back in 2003. Had it come out today, we would have called it a metaverse too. It was a 3D world where you could meet other people, socialise and take part in cultural projects. In 2007, Sweden even built a virtual Swedish embassy there. In hindsight, the project was simply too early, and the platform never really took off.

Now — almost twenty years later — many inside Meta are asking themselves the same question. Horizon Worlds has reportedly 300,000 monthly active users. Compare that to Facebook’s 2.9 billion and you get a sense of what lies ahead before the metaverse becomes a meaningful part of the business. Mark Zuckerberg is certain it will get there. But he appears to be largely alone in believing that, for now.