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Horizon Worlds: Meta's Metaverse Misstep

Latest updates: Dec 15 2022

Key Takeaways

  • Meta Horizon Worlds, which is the latest social VR product of Meta, is a place where VR creators, enthusiasts, and users can come together to collaborate and participate in shared experiences as well as join a growing virtual community.
  • Horizon Worlds has intuitive and immersive user experience due to its simplified user interface, high creator engagement, standardized avatar system, hardware-software integration and seamless user scenario transition.
  • According to a new report from the Wall Street Journal, Horizon Worlds had gained 300,000 users by February 2022, but the latest number of users recorded in October is less than 200,000, missing their updated target by 50%.
  • It also reported that the retention rates for the Quest VR headset have dropped in each of the last three years and over half of Quest headsets aren't in use six months after purchase.
  • Meta has quietly gone into a "quality lockdown" for the rest of the year to address performance and other issues in Horizon Worlds and there will be no new features until the current user experience is improved.


A new world is emerging before us, a realm of infinite possibilities where everyone will be able to step inside a virtual-reality utopia and live their best lives, the Metaverse. At the same time as Web3 virtual world projects like Decentraland and The Sandbox were on the rise, Mark Zuckerberg, CEO of Facebook, shocked the world by announcing that the company would change its name to Meta and become a “metaverse company” in October 2021.

“Our hope is that within the next decade, the Metaverse will reach a billion people, host hundreds of billions of dollars of digital commerce, and support jobs for millions of creators and developers.” - Mark Zuckerberg

Zuckerberg apparently had high hopes for the initial version of his metaverse: Horizon Worlds was marketed as Meta’s virtual playground for creators. But hope springs eternal, as the saying goes, and hope is mostly all that Meta has going for it as 2022 nears its end and Horizon Worlds has consistently fallen short of Zuckerberg's goals since its launch last year.

What is Meta Horizon Worlds?

Meta Horizon Worlds is a free VR app that can be experienced on a Meta Quest headset. It is an ever-expanding social universe where users can hang with friends, meet new people, play games, and attend virtual events; there are over 10,000 worlds and experiences to explore. There’s always something new to discover inside Meta Horizon Worlds.

Facebook first launched Horizon in August 2020 as an invite-only beta platform for virtual explorers. The premise was the same: users could play around with a set of pre-built creation tools to develop their own experiences they want to see in VR. The public beta was available to Quest (VR headset developed by Meta) users 18 and up in the US and Canada in December 2021.

In addition to being a creator platform, Horizon Worlds is also a shared space for multiplayer gaming, where users can play games created by others. The app combines the following key functionalities that allow users to create immersive VR experiences.

  • Code blocks: A collection of ready-to-use code snippets and scripts that allow users to define automated events in VR.
  • Gizmos: Pre-built object and avatar properties that users can associate with the different elements of a VR world.
  • Sounds: Includes three types of pre-built sound effects – event-specific effects, background sounds, and music.
  • VR physics: Physics effects that allows users to create objects that behave like real-world items.
  • Animation effects: Users use the tools in the app to make an object move around and record the movement as a custom animation.

What can you do in Horizon Worlds?

Inside Meta Horizon Worlds, anyone can become a creator and develop original content using the Build Mode. Creators are essentially VR world designers and will own the intellectual property rights to the content they create.

Players can also create VR spaces with coworkers and friends. Collaborators will have the same rights and privileges as the original creator, but will be unable to add or remove new collaborators. This feature makes Meta Horizon Worlds a powerful tool for remote work and collaborative product or game design. Using the software’s built-in tools, teams can create highly customized workspaces where everyone can meet, change their surroundings, discuss work, and visualize ideas using the available shapes, animations, and sound effects.

Key features to attract users

The first time you talk to someone in Horizon Worlds will change how you think about VR and the Metaverse because it is like you’re having a conversation with someone who’s physically present.

  • Creators engagement: Meta announced a $10 million Creator Fund to encourage more people to build with them. As of February 2022, it had 10,000 virtual worlds built by users.
  • Simplified interface: Compared to other Metaverse platforms like Decentraland or Rec Room, Horizon Worlds’ user interface is quite simple and easy to access. The app also features a standardized avatar system that users can customize by modifying the shape and the color of their hair, eyebrows, eyes, nose, and mouth.
  • Great software and hardware integration: User experience is more intuitive with Quest headsets. Rather than relying on the buttons of the controllers like other platforms, certain wrist and hand movements will trigger different functions in Horizon Worlds.
  • Seamless user scenario transition: Users can enjoy different activities and seamlessly cycle through different virtual scenarios and is integrated with Horizon Venues, where people can watch virtual concerts, gameplay, or videos together; and Horizon Workrooms that provides virtual workspace for collaborations.
  • Diversity and inclusion: There are different worlds and events honoring different cultures and identities like “Worlds of Asia” where people can find worlds made by Asian creators, a meeting space for members of the LGBTQ+ community, a “Women in Horizon” event venue, etc. There are also numerous safety functions to protect the user experience of various user groups’ In the Safe Zone.

An empty world is a sad world”

Zuckerberg bet the future of his company on the idea that everyone in the world would want to spend every waking hour on the Metaverse and even spend money on in-app goods— so much so that he changed his company’s name. But, according to a new report from the Wall Street Journal, very few people are actually interested in doing that.

In October 2021, Horizon officially launched in the US, Canada, and later the UK after years of beta testing, name changes, and controversies over user conduct and safety. Horizon Worlds had reportedly gained 300,000 users by February, fewer than Meta had hoped, and the visitors who do show up generally don't return to Horizon after the first month.

Horizon Worlds first set a target of hitting 500,000 MAU by the end of 2022, later revising the goal to 280,000. In August 2022, Meta continued to launch Horizon Worlds in France and Spain in an effort to expand its market. But the latest number of users recorded in October is less than 200,000, missing their updated target by 50%. In other words, Horizon Worlds is a flop despite the fact that Meta has pumped $36 billion into building the Metaverse and $10 billion for this project; compared to the $150 million Apple spent to create the original iPhone or the $25.8 billion The US spent on Project Apollo between 1960 and 1973, Meta’s fund is just huge.

The graphics / design of Horizon has been widely criticized after Zuckerberg announced the expansion on social media with a virtual selfie of his avatar standing in front of a rendered Eiffel tower within his virtual world. The graphics were so sub-par and outdated that users and investors alike became even more skeptical about Horizon Worlds and its future. Given the 10 billion dollars Meta has sunk into the project, people have expected way more, and were quick to ridicule what they saw as completely underwhelming result for such a high budget.

“In Horizon Worlds, users inhabit customizable (but legless) floating avatars — mine looks kind of like a cartoon version of me on a good hair day — that some might find creepy or obnoxious. Facial expressions also don’t necessarily match what the person behind the avatar is feeling.” - a user complaint.

Zuckerberg’s infamous selfie of his Horizon avatar that drew harsh criticism for the outdated graphics.

The decline in the number of users of Horizon Worlds was caused not only by the poor graphics and tedious worlds but also the cost of Quest headsets. If users don’t have the newest hardware, they might not be able to enter it at all. While the app is free, the headset required to use it costs $299 - $399. Meta recently announced the new Meta Quest Pro, but its price tag of $1,500 makes it unlikely to become a mainstream product. In addition, the Journal reported that the retention rates for the Quest VR headset have dropped in each of the last three years and over half of Quest headsets aren't in use six months after purchase.

All of this means that Horizon Worlds' performance is falling short of expectations.

Investors Lose Faith

Meta investors are now paying big price for the company’s decision to shift its business roughly a year ago. According to Meta’s latest earnings report in October, the company’s metaverse division, Reality Labs, drove Meta’s losses, shedding $3.7 billion in the quarter compared to the $2.6 billion lost in the same quarter one year ago. All told, Reality Labs has lost some $9.4 billion in 2022 – and the year’s not over yet. Year-to-date, Meta’s shares have plummeted over 71% to less than $98 per share in November for the first time since 2016, cleaving more than $650 billion off the company's market value— a clear indictment of Zuckerberg’s costly misadventures in the Metaverse. Meta is now attempting to assuage Wall Street by demonstrating greater fiscal responsibility. On November 9, the company announced it was cutting 11,000 jobs, or 13% of its total workforce.

Top holders of Meta Platforms stock and their paper losses this year so far (S&P Global Market Intelligence, IBD)

The company has quietly gone into a "quality lockdown" for the rest of the year to address performance and other issues in Horizon Worlds and there will be no new features until the current user experience is improved.

Looking Ahead

Over the last few months before the self-imposed lockdown, the company had added safety features like controls for voice chat and four-foot personal boundaries around avatars in the Horizon Worlds platform. It also said that it is working on a web version to let people experience virtual worlds without owning a VR headset and will let users add legs to their avatars on VR, mobile, and more as part of the company’s next generation of avatars.

Meta’s ambitions for Horizon Worlds hinges on its ability to become profitable. Meta hopes to monetize many aspects of the virtual world in order to start generating ROI. Meta also plans to release an enterprise VR headset, currently known as “Project Cambria,” perhaps hoping that the appeal of working in a high-resolution virtual world will encourage users to try it out.

Going forward, Meta is committed to realizing Zuckerberg’s vision for the Metaverse– although it will face tough challenges along the way, with players reportedly turning away in droves. And given the company’s ambition, penchant for ruthless tactics, and unprecedented level of investment, it’s too early to assume that Facebook’s bid for the Metaverse will end in failure.

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  • Key Takeaways
  • Introduction
  • What is Meta Horizon Worlds?
  • “An empty world is a sad world”
  • Investors Lose Faith
  • Looking Ahead