Meta announced a few weeks ago that Horizon Worlds will lose Quest headset access on June 15th. Users will no longer be able to build, publish, or update virtual reality worlds on the platform. The company is spinning this as a strategic pivot to mobile, positioning Horizon Worlds to compete with Roblox and Fortnite. Let’s call it what it actually is: the quiet funeral for the metaverse bet that was supposedly so transformative the company changed its entire name over it.
The timing of this is something to be admired honestly. With a war in Iran dominating the news cycle, a landmark social media trial heading to a jury verdict, and rumors of a massive company-wide layoff swirling, this is about as buried as a major strategic reversal can get. That is exactly how you want to unwind a bet this embarrassing. Reality Labs has lost nearly $80 billion since 2020. They laid off roughly 1,500 employees from the division last month. They shuttered multiple VR game studios. The VR fitness app Supernatural (which they acquired in 2023) has been moved to “maintenance mode,” which is corporate speak for “we’re pulling the plug but don’t want to say that out loud yet.”
I am not remotely surprised by this. The fundamental problem with Horizon Worlds was always that nobody could articulate a compelling reason to use it. Who wants to strap on a clunky headset to sit in a virtual meeting that could have been an email? Making a Second Life clone that was somehow more boring and had worse graphics than actual life was never going to have legs. The product was a solution searching for a problem, and after $80 billion in losses, Meta finally found the courage to admit it (sort of, and only while nobody is watching).
What concerns me more than the Horizon Worlds shutdown itself is the broader picture of where Meta is heading right now. The company looks genuinely hapless. They are quietly unwinding their defining strategic bet. Their AI division is reportedly a mess internally. They are staring down a court case that could fundamentally alter how their core products work. TikTok continues to eat their lunch with younger demographics. And on top of all of that, they are potentially about to lay off 20% of their workforce under the convenient banner of AI efficiency.
Zuckerberg is now talking about AI glasses being the future. Maybe. But we have heard Mark talk about the next big thing before (we are literally watching the wreckage of the last one get swept under the rug right now). The pivot from metaverse to AI feels less like visionary leadership and more like a company lurching from one hype cycle to the next, hoping the next bet lands before the market notices how badly the last one missed.
I genuinely do not know where the light at the end of the tunnel is for Meta right now. If you’re holding this stock, you have to ask yourself what the bull case actually is beyond “they have a lot of users.” That used to be enough. I’m not sure it still is.