Meta stock price drops more than 20% | Hacker News Reader

Meta stock price drops more than 20%

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256 pointsderwiki475 comments

A lot of people blame Meta's VR attempt, but I don't think that's the problem.

The problem in my opinion is that we have reached peak advertising. Advertising is ultimately a doomed business model as it works against your users' interests, yet requires those users to willingly use the product and engage with the ads.

Over time, users learn to ignore it (see "banner blindness") so a short-term response is just to include more ads to compensate, but there's only so much space before the entire product becomes saturated with ads and users leave completely because the inconvenience of advertising became greater than the value the product provides. Regulators are also wisening up to it with stronger privacy protections (that threaten non-consensual ad-targeting) all around the world.

Advertising is a time bomb and an unsustainable business model. It provides short-term revenue (and a lot of it if you play your cards right, as Meta's stock price until now reflects) but will never be sustainable in the long run. Advertising is a parasite and its host will always try to get rid of it - a pretty terrible business model when you can instead align the incentives by charging your users money and provide them a valuable service in exchange.

Is there value in Facebook's products (whether current, or future VR-based ones)? Yes. Is there enough value to justify a overinflated stock price that only got there due to a combination of monopoly position as well as temporary gap in regulation against spyware? Doubt it, and so does the market.

The game theory of firms choosing to advertise seems to be prisoner's dilemma like. The only equilibrium is for both firms to advertise at a loss. If either firm stops advertising, the other firm's ads become more effective and it will steal market share.

As a consequence of this, I think advertising will always persist irrationally unless the system if changed to prevent this irrational behavior. A really high tax on any ad spend would probably work.

That's not what "at a loss" means and is also not irrational.

High tax on ad spend would be a throwback to our Christian moralist days where we decide that some spending is good spending that we like and other is bad spending. Most attempts to ban payment for boosting speech have failed, see citizens united.

I'm sorry, but have we ever left "those days"? There are dozens of examples of sin taxes on things like Cigarettes, Gambling, Alcohol, Carbon Emissions, etc.

Carbon has clear negative externality. Most of those other taxes were first instituted during periods of much greater Christian beliefs in the US than now.

So are you OK with a sin tax if it is on something with a negative externality? Do you think advertising does not have any negative externalities?

Carbon is not a sin and that is not the historical reason it is taxed, unlike say alcohol and cigarettes. Many of these other things may have externalities, both positive and negative, but not so clear cut as carbon.

The reason you're getting downvoted is because you compared a tax on ad spend to "Christian moralist" taxation in the United States, otherwise known as sin taxes. But you changed your definition of a sin tax halfway through the thread.

These days, sin taxes like those on soda are often not motivated by religious concerns, at least in the US. They're taxes on goods or services that are harmful to individuals or society.

And Cigarettes, Gambling & Alcohol don't?

The primary impact of all of these things is on the purchaser. So not an externality.

Of course, there are arguments around the externalities of all of these things. I view most of those arguments as society contextual (people don't like others smoking, so it is an externality) as opposed to something like carbon which would have a negative externality regardless of this societal/cultural context.

Some externalities of smoking for non-smokers include increases in health care coverage costs, reduced access to health resources, and loss of loved ones to smoking related health issues.

>Of course, there are arguments around the externalities of all of these things. I view most of those arguments as society contextual (people don't like others smoking, so it is an externality) as opposed to something like carbon which would have a negative externality regardless of this societal/cultural context.

I agree with you here and find the obsession many people here have with advertising weird. Still, alcohol pretty clearly has a negative externality "regardless of societal/cultural context." The consistently high percentage of vehicular deaths, assaults, rapes, damage to developing babies through FAS, and so on are all largely borne by people besides the drinker themselves.

Taxes on cigarettes, in the US, at least, are not driven primarily by Christian moralists. I was part of a prominent US non-profit that is behind both higher cigarette taxes and laws that ban smoking in public areas. The motivation is health.

Tax on advertising is a very interesting idea. Everyone understands that is a necessary evil and most parties would rather not do it given the chance. But how do you classify what advertising is? Buying adspace on a website or billboard might be obvious? What about other forms like content creation, influencer marketing etc. If you create some websites or videos related to your services, is that considered advertising?

Exactly. It wouldn't survive a court challenge.

I think you only need to track financial transactions, advertising companies would have to report and be taxed on income. The government has shown moderate competence at being able to implement things like this (maybe there are some areas where there is a lot of tax fraud, but generally it works).

It is an interesting question you raise about second order effects-- would there be ways to work around this to get advertising for free?. For example maybe spam would become more common and intrusive and be used by more reputable companies. Note that ideas such as "hashcash" were solutions to effectively put a fee on email spam.

The root of what is troubling about this all is that free speech isn't a sufficient framework in the modern world where attention and time are constrained.

How do you separate advertisement companies and, say, entertainment companies that happen to just do product placement?

I'm in favor of taxing ads, but it'd need to be comprehensive definition unless you want some unintended consequences.

Product placement is advertising. You only need to tax the transaction for the advertisement not “advertising companies”.

It does get more complicated about how you define that it’s an advertisement vs not. And there’s lots of “paid placement” stories even in “respectable” newspapers that masquerade as news but would be hard to pierce the veil on as advertisement instead of just “free speech”

you don't have to pierce the veil. the newspaper is still free to publish whatever content it wants, including ads. it just has to pay a tax if it wants to accept money for it.

I would word the law very generally: an X% sales tax on any transaction made in exchange for publishing, or increasing the visibility of, content supplied by the payer.

this covers Facebook promoted posts, fake editorial articles, search ads, even NPR ad spots and YouTuber sponsors. it wouldn't affect product reviewers taking bribes from companies, unless the companies actually supplied review drafts.

sadly, this probably falls afoul of Citizens United, which was about the legality of ad money.

Among the sea-changes in the publishing industry was the abolition of exceptionally high taxation rates on advertising in the UK in the early 19th century (circa 1830 or so).

I've only read peripherally about this and don't have any good sources handy, but it's a historical fact which strikes me as quite interesting.

Seems premature to crow the death of advertising when not a single social media company has been successful with this alternative scheme you are imagining.

The market is contracting because when rates are high and capital is expensive, ad spending is one of the first you cut.

Not a single company succeeded because up until now, advertising both produced greater returns and neither people nor regulators were interested in its privacy implications.

Now people (and most importantly regulators) are starting to pay closer attention, so the tide might be turning, up until the point where advertising becomes such a minefield that its costs will make alternative monetization models more profitable.

[Caution: contains strong language.]

I can't believe I'm the only one who considers advertising as an active negative signal. That is, if you're pushing ads, you are loudly telegraphing that your offering is not good enough to be discovered organically, and is therefore shit.

Paying for so-called influencers is even worse: if you do that, you are - and there's no kind way of putting this - paying for others to whore their opinions on your behalf.

If you want to make your wares visible in my sphere, find ways to make these appearances interesting, original, inventive and sufficiently unobtrusive. If you can't, tough. Take your toxic waste where it belongs.

You're not the only one - I generally also considering advertising a slight negative signal (although not for the reasons you describe.)

I just assume there is some other lower cost competitor that spends less money on advertising and returns the margin to me.

So basically all products are shit. Gotcha. Seems like a sound model.

"If you want to make your wares visible in my sphere, find ways to make these appearances interesting, original, inventive and sufficiently unobtrusive"

Yeah, that's also called advertising. Sorry.

Right, I should have tried to inject relevant nuance into my original post. Without trying to be pedantic, I make a distinction between "advertising", and more generic "promotion" activity. A well done piece of intelligent material, in any form, that happens to allow voluntary discovery of something related to the matter at hand is fine. Anything that disturbs or disrupts the flow and tone of the aforementioned material is not.

On the other hand, I do appreciate the snark here:

So basically all products are shit. Gotcha. Seems like a sound model.

You're not too far off. The rule of thumb I apply to this world is that 90% of everything is crap.[ß] And that rule is recursive. Acceptably decent things are rare exceptions and outliers.

ß: Including me.

I don’t think so. I think ad spending is in a temporary slowdown due to economic concerns, and Meta is losing users to TikTok so it’s got less eyeballs to monetize as well. Google for example grew ad revenue this quarter YoY.

Tangential but I'd be happy to see them become a second-rate company like Yahoo! I understand Advertising and Marketing have positive social functions, but I also think we are getting oversaturated with it and need to pull back to a "saner" level. Humanity doesn't need the latest crap to survive as a species.

I don't know if you have an actual reason to attribute Meta's performance to their business model (apart from not liking advertising). They could reasonably run a steadily profitable business based on advertising without expecting to grow forever.

People learn to ignore ads over time (if not deploying technical countermeasures such as ad-blockers), so even maintaining stability is IMO impossible as the effectiveness of the advertising (and thus the revenue from advertisers who pay for it) will diminish.

I ignore ads, but do occasionally buy stuff from Facebook ads. For example, I ordered some guitar picks. I like that if I am interested I can look at the comments and get some immediate reviews and discussion about the product.

It is even more simple than that. Apple has kneecapped Meta's advertising business with their privacy controls.

I’m not so sure the advertising parasite hasn’t killed the host. At the very least, I’d say it’s winning, and that it evolves much faster.

As long as you can attract attention, ads will work. Fb can still attract plenty also there is still no better way to attract attention than a mobile phone

Traditional ads might become less effective. But all social interaction is mediated by ads now.

> Is there value in Facebook's products (whether current, or future VR-based ones)? Yes. Is there enough value to justify a overinflated stock price that only got there due to a combination of monopoly position as well as temporary gap in regulation against spyware? Doubt it, and so does the market.

The market also doubts the future VR-based ones. If you think there is value in those future VR-based products then I would say take a chance and buy the dip! Institutional investors are not as deeply involved with computing as we are on this forum.

There is value in VR in that there is at least some demand that Meta is meeting. 1bn+ in quarterly revenue is not nothing. But assuming their VR business could become profitable, the valuation justified by a billion in revenue is still much much much lower, so the dip would be a ways down still.

I want to hear more about how advertising is a doomed business model. We've had advertising for centuries... But I'd love to know it was going away...

I must have missed the viagra ads in "A Tale of Two Cities."

You jest, but "A Tale of Two Cities" was published in just under three-dozen weekly instalments in a periodical that did have advertising.

I think there's some confusion here. By "advertising" GP is referring to the business model where you offer a product to users, but your revenue comes from advertisers targeting those users.

IIUC they are not claiming that basic practice of advertising goods and services you provide is doomed.

Mass-market advertising in the modern sense dates to about 1860, or about 160 years. That's over a century, but not "centuries". As a significant social and economic dynamic, it's younger yet.

As I've recently posted to this thread, Hamilton Holt's 1909 account is an excellent introduction to the beginning of this period:

<https://archive.org/details/commercialismjou00holtuoft>

Google's Ngram Viewer suggest that the terms "advertising agency" and "advertising copywriter" only came into vogue during the 1920s, which would be only just at the century mark:

<https://books.google.com/ngrams/graph?content=advertising+ag...>

I don't have a ready reference for ad spend evolution over the entire 20th century, but based on the 1980--2000 data, it seems likely highly skewed to more recent times:

<https://www.visualcapitalist.com/evolution-global-advertisin...>

There's probably a pretty good historical basis for the series Mad Men to have been set in the years 1960--1970.

<https://en.wikipedia.org/wiki/Mad_Men>

advertising at its essence is dissemination of information to the people who seek it. it’s a win/win done right and essential to an information society

This is a very broad statement. Google's search ads revenue are growing just fine... Youtube is down though.

WPP is seeing increased ad spend as well.

Conclusion? Probably that apple has fucked facebook to such an extent that it's threatening their entire business. This isn't much to do with advertising in general.

If that were true, we'd see other companies that rely on advertising to drop similar, or at least drop as well. Google, ClearChannel, IPG, and even Amazon. But those aren't collapsing.

What you say is probably one reason, though. But the actual crash is more likely because Meta didn't innovate and move away from-, or diversify their advertising-model over time. So rather than a steady change through continued innovation, A&M etc, they are now forced to bet on a giant pivot. For one, this makes investors nervous.

Meta has performed several M&As though, some of which proven extremely profitable and successful. But while e.g. Instagrams' userbase is different from FB, their income is based on almost the exact same model of targeted advertising. FB failed to move into ecommerce, video, streaming, etc. and diversify their income significant. Something that Amazon or Google do much better.

FB/Instagram became boring for a very long time. Their recent pivot to "discovery" is a move in the right direction, but they are still ways off from staging a return. And all this is overshadowed by the Metaverse.

They've invested so much reputation wise (changing their name even) that it's very hard for them to back down, maybe impossible considering who makes that call.

> Their recent pivot to "discovery" is a move in the right direction,

I'm not following META closely. But isn't this another pivot to diversify their userbase, rather than diversify their revenue-stream?

Or is there some plan to monetize this "discovery" outside of their common "targeted advertising"?

Google is dropping. Amazon doesn't rely on advertising.

The advertising market is definitely slowing with the high rates.

Amazon doesn't rely on a single revenue stream.

But Advertising certainly is an important income stream. It gets its own chapter in the earning calls. ~$9 billion in 2021, which is more than subscriptions (Prime etc), at ~$8 billion[1]

[1] https://www.insiderintelligence.com/insights/amazon-revenue/ , https://s2.q4cdn.com/299287126/files/doc_financials/2022/q2/...

I wouldn't call that reliance. Compare with advertising as share of Google or FB revenue.

The reason has less to do with share of revenue and more to do with stalled or weakening performance in the business’s core value offering.

Facebook loses users of genuine content consumption to tiktok. Amazon has smaller baskets checking out. Google threatened on its buying into default search on mobile safari.

Ad revenue has padded earnings and shielded these companies from investor critique and urgency in “what’s next?”

It’s much bigger than content and TikTok - it’s teens and early twenties not using Facebook, they are all using Snapchat for their social network.

So the audience is getting older, and there is no way of now getting new eyeballs. So they have to try something else to get them, hence Metaverse.

> it’s teens and early twenties not using Facebook, they are all using Snapchat for their social network.

Let me introduce you to: Instagram.

Literally none of them are using Instagram for their social network - they are just spamming likes, sure with people they know, but as much following influencers, celebs, bands, whatever.

Snapchat is where the teens spend their time keeping in touch with their friends, Meta has lost them, they aren’t going to get them back to Facebook or WhatsApp. The teens have moved on because their parents are there.

I am Gen Z. It is true that Snapchat is very popular among teenagers.

But IG has a lot more going on than you are imagining - stories & DMs have rescued it, hardly anyone ever actually posts though.

> Google is dropping.

Yes. Just to put numbers on that: Google's share price has dropped 25% since one year ago. Now everyone's in a bit of funk right now (except energy companies), but for comparison Apple has only dropped around 5% in the same time period.

> Amazon doesn't rely on advertising.

Yep, for revenues Amazon relies on retail, then AWS, then advertising and other miscellaneous. (And for profit largely on AWS, IIRC).

Eh, the volatility from 1 year ago is so great that you shouldn't grab one date to compare to. AAPL had a good December and is down 20% YTD .

FB is down 70% though. It's different.

Noise vs signal ration. Despite all those nasty infliction of ads, Google still provide very important services. Ditto for Amazon. Amazon does show ads but it is aligned with their business model. I mean I am browsing for products and I get ads for products.

The same isn't true for Facebook. I've stopped using this 7 years ago and I didn't even miss it for one day. One day my wife was scrolling through FB feed and all I can see is ads after ads after promoted pages. She scrolled for like 5 minutes, encountered may be 2 posts from her acquaintance circle and then she closed the app. The boredom while browsing FB feed was visible in her eyes.

FB simply doesn't offer any value these days. Almost everyone I know has gradually stopped using FB. This is an app with very low signal to noise ratio.

Something was broken at Facebook for a long while. Before I stopped using it, my feed would show me content that had nothing to do with my social network. The algorithm was trying to keep my attention.

My FB feed would not show me posts from friends, whom I knew posted something (by checking their profile manually). I think their internal kpi metrics meant staff sacrificed their user base by tuning for engagement in the short term.

Once users realized they weren't seeing posts from their own social network they left. As each person left, FB had no choice but to fill a diminishing feed with crap. To the point where they forgot to feature genuine posts their users made over curated 'attention' content.

I think it's a bit like the recent abandoned UK budget. Lots of countries, under current conditions, will show budget deficits this year, without really being punished by the markets. And the bulk of the UK deficit under the proposed budget would have been that sort of thing. But the difference with the UK was that a portion of the budget was just _gratuitously throwing money away for no reason_ (particularly the top-rate tax cut), and the markets punished them for that.

This is similar; everyone dependent on advertising is struggling to an extent, but most of them aren't currently setting fire to vast piles of cash in service of an idiosyncratic project which most people don't have much hope for.

FB advertising works extremely well, little less so after Apple's changes, but still it's a beast.

If you look into FB financials, revenue per user has more room to grow, outside US if nothing else, but I think US as well.

So "advertising model broken" isn't really true. It is irritable and despicable/deplorable in some ways for sure. But it works.

I've got to disagree. I've been involved in many projects and companies where we needed to reach out to potential partners and customers around the world. Advertising was essential. I'm sure there are better ways to do it but as long was we need to get someone else's attention, it will be there.

> Advertising is ultimately a doomed business model as it works against your users' interests, yet requires those users to willingly use the product and engage with the ads.

Sort of, but not quite. We had already kind of reached peak advertising, this isn't recent. More specifically the following trends:

- Advertising has been and is expected to continue to grow at a measly 5% per year on average[0] (compare that to say like 10% on Software)

- Digital advertising's cannibalization (e.g. the pie shifts) of traditional media is slowing down and hitting diminishing returns

- We're hitting peak media use at 12 hours 9 minutes per day[1]. There's just physically not enough hours in the day to consume more media.

- There are more players trying to capture that consumption. Facebook's properties's use are diminishing compared to competitors (e.g. basically TikTok).

TL;DR - Pie only grows 5% per year, digital is getting close to eating a majority of the pie, and people that aren't Facebook are eating that pie and Facebook can't compete.

[0] https://www.imarcgroup.com/global-advertising-market

[1] https://review42.com/resources/how-much-time-do-people-spend...

It's interesting to note that mass advertising has gone through several stages, and a number of previously highly-active platforms are now pale shadows of their previous selves. Some of this is a matter of shifting technology and related advances, but there also seems to be a pattern of burning through audiences through frustration.

Arguably, advertising initiated in bulk print (newspapers and magazines), see Benjamin Day's The Sun (1833). I've mentioned Hamilton Holt's Commercialism and Journalism (1909) many times, it's an excellent summary of early advertising-based publishing, and its many problems: <https://archive.org/details/commercialismjou00holtuoft>.

Radio stole the thunder from print as a more passive and accessible medium, television from radio. Targeted cable offerings sniped over-the-air broadcast. And now online advertising is dominating both print and broadcast. I'd argue that billboard advertising has shown similar patterns as well, expanding rapidly with highway construction, seeing a strong backlash (beginning in the 1960s, notably by Lady Bird Johnson: <https://www.sandiegoreader.com/news/2001/jun/21/what-happene...>), and over the past several decades, trending strongly to very low-value advertisers ("gentlemen's clubs", lottery and casino ads, the classic anti-goods of alcohol and tobacco, as well as the increasingly ubiquitous "your message here" placeholders, being strong indicators of this, particularly outside high-wealth metro regions).

I don't recall who made the observation, but in the content industry, it's interesting that music, film, and books are exceptions to the advertising-supported nature (mostly, there are a few exceptions, mostly minor, though the expanding length of trailer and pre-film advertising in theatres would also be an exception ... this may have been mentioned in an Ezra Klein episode).

And speaking of Klein: that podcast includes advertising. I find myself averse to listening when I know I'm going to have to hear those (e.g., I can't intervene to skip the ads, such as when I'm doing household tasks), and will avoid listening to it. There are a number of other podcasts which are similar, a surprisingly large number being of what are nominally public-radio programmes --- Freakonomics comes to mind. Combined with IMO lackluster quality, I'm actively avoiding many of these, and have unsubscribed to several. Independent and academic podcasts are more my style, History of Philosophy by Peter Adamson and Complexity from the Santa Fe Institute being among the best.

And more recently, the vast expansion of direct marketing over p2p networks, most notably landline and mobile telephony, is making the experience of subscribing to those services increasingly undesirable. Much in the same way as spam and simply information overload seems to be making open-standards, universal-access email much less widely used (many organisations no longer publish email addresses, or respond to emails where such addresses can be found), an overall frustration level can in fact kill general use of a medium or channel.

John Gottman's five-to-one ratio of positive to negative experiences, originating in relationships but apparently having broader applications, may well play a role here. If even a relatively small minority of experiences over time with a technology, medium, or channel are negative, that impression tends to strongly discourage long-term favourability. See: <https://www.gottman.com/blog/the-magic-relationship-ratio-ac...> (for the relationship side, the ad/media extension is my own suggestion, though I suspect others have argued similarly).

As Nextgrid's comment notes, the real problem with advertising is that it's a race-to-the-bottom market, especially where high-value / highly-attractive audiences flee. Higher-quality advertisers similarly depart, and both the products marketed and methods utilised tend to ever-increasing toxicity in both figurative and literal senses. As I mentioned a couple of months ago, advertising ultimately has a reverse-Midas touch: it turns gold to shit: <https://news.ycombinator.com/item?id=32669503>

Part of the constant-platform-migration trend seems to be explained by highly-valued audiences tending to be early adopters of such platforms. Early advertising returns are high, and for all parties (publishers, advertisers, and audiences) the initial experience tends to be positive. With both wider adoption and early-adopter defections (leaving the media/platform), that kicks off the death-spiral dynamic.

How can the average media usage be 12 hours 9 minutes per day? Is the average person only working a part-time job?

After a stint years ago in the adtech business, I adopted a personal rule never to invest in any ad-revenue-based company. (Of course through ETF holdings I can't avoid them).

Besides moral concerns, advertising might be a good investment at the beginning. I predict TikTok will make a killing as they ramp up advertising on their platform now that they've gained a huge audience. However, returns will diminish over time and eventually disappear.

You’re over complicating things. Apple’s Ad Tracking Transparency feature which allows iOS users to opt out of tracking. FB admittedly as much last quarter.

It’s amazing how much more effective a 10 line change to App Store rules was in protecting user’s privacy than a bloated 99 section 11 chapter law - ie the GDPR.

> It’s amazing how much more effective a 10 line change to App Store rules was in protecting user’s privacy than a bloated 99 section 11 chapter law - ie the GDPR.

You should remember this in the future, when Apple have become even worse than FB in terms of advertising. Device growth has stalled, and services (i.e. advertising) is gonna be their new iPhone.

The App Store has been basically no better than a flea market for over a decade. I doubt that it could get worse.

> Advertising is ultimately a doomed business model as it works against your users' interests

From the dawn of mass media it has been subsidized by ads. Newspapers, radio, magazines, television, movies (through product placement), music (through sponsorship), podcasts, and even outside of media: sports, schools, mass transit, etc.

Ads have been a monetization strategy across a mind bogglingly broad cross-section of society for over 200 years.

Individualized ads may get regulated out of existence or maybe even out-competed by more consumer friendly options, but people by and large like the subsidies ads provide. Ad supported music, tv, and movie streaming is wildly popular. HN users often post archive.is links to bypass paywalls which actually opts into a paid-for-by-ads experience.

What we see with meta is their ads becoming less valuable and their stock reflecting that. I think it’s a huge mistake to draw any conclusions about the business of ads other than ads are controlled by the platform.

Apple is hoping these ad dollars flow to them, not that the ads go away.

I think you're conflating "infinite growth" with "unsustainable."

Advertising can be a sustainable business model. Radio, television, billboards, etc. sustain themselves through advertising. We can quibble about their growth rates, but if advertising were unsustainable, then these industries wouldn't exist in their current form.

I think you're actually rejecting the idea that a company can sustain infinite growth through advertising. I think that's a little different from being wholly "unsustainable."

It's interesting though that both radio and TV switched to pay models: cable/premium channels and Sirius/XM for radio. Billboards are providing anything to the user, they're just giant signs that say "go buy this"

On the contrary, advertising is a business that will always exist and thrive, never decline and always grow unless the population starts declining.

I have a different hypothesis (I know it's a controversial one).

Ad based business models have a redistributive effect. Services like Facebook are paid for in proportion to spending power whilst usage has a completely different distribution. So wealthier users are effectively subsidising less wealthy users, which enables broad network effects and economies of scale.

People will always pay to influence other people. I think advertising while being annoying is one of the less malign forms of doing that. It also has privacy preserving characteristics as there is nothing more destructive for privacy than making a payment. That doesn't mean we shouldn't regulate to limit ad targeting. I think we should.

I work in the industry and I agree with your take.

> It also has privacy preserving characteristics as there is nothing more destructive for privacy than making a payment.

This is a very interesting take and I'd like to see some further delves into this.

I must be some of the few persons in the world which enjoy ads in FB, I can even confess that I sometimes log there to search if there any attractive offers regarding to clothing or vacations. It centralizes many offers of different services I’m looking for, but I am very lazy to actively search for them. IMO the drop is due to the loss in confidence of the shareholders on the vision of the company.

> The problem in my opinion is that we have reached peak advertising. Advertising is ultimately a doomed business model as it works against your users' interests, yet requires those users to willingly use the product and engage with the ads.

Isn't the problem much simpler.

It's a shift in users attention to other social networks like TikTok, plus Meta already capture the total addressable market.

It's hard to continue growth when you've essentially plateaued and now users are spending less time on your site.

Nah, this is all about Apple and their ATT changes.

Like TikTok are losing money hand over fist, so it's not that the advertisers are moving to them, it's that advertisers have essentially been forced to give a bunch of the money they were previously giving to Fb to Apple.

“Dark Money Political Ads Proliferate on Facebook and Instagram Ahead of the U.S. Midterms, Enabled by the Platforms’ Policies”

https://www.newsguardtech.com/misinformation-monitor/october...

They're placing all their bets on their meta quest pro and pushing people into the metaverse.

Complete control over that environment, combined with the new vr headset's eye tracking+other sensors, would likely make them the best A/B testing / irl ad performance data platform on the block... if it's successful.

Imo, they haven't really proven their case for their metaverse, the price point for the headset is wayyy too high for mass amounts of users to join in, and likely wouldn't join anyways since I'm not on fb/ig and don't trust em

> A lot of people blame Meta's VR attempt, but I don't think that's the problem.

Analysts explicitly think the VR effort is overfunded. It's the problem according those who are trading.

I feel like VR is partially to blame in the sense that it is showing that Meta is a one trick pony, a trick that you pointed out is rapidly losing it luster.

It's going to be an interest year or two if all tech stocks continue to fall. Most of these companies pay largely in RSUs for more senior ICs and managers. RSUs strike a price at the grant date. If you're paid 50% in stock, and the stock falls by 24%, you just took a 12% pay cut.

Meanwhile, the new guy doing the same job as you got their RSUs granted at today's stock price, but the target value for someone at that job level- no pay cut for them, effectively.

It's a recipe for a lot of people swapping jobs just to keep their incomes at the same level.

Or, companies can do as my employer did (bias note) and switch to a new comp system that avoids these problems: https://news.shopify.com/rewriting-the-story-of-compensation

Shopify’s system drastically limits the upside which is unattractive

If you want upside, you can get paid almost entirely in options. The upside is huge.

Sure, but options are not RSUs. Shopifys system is little different than all cash and an employee stock purchase plan. For better or worse.

Then you can also get paid in stock. Like, the system lets you pick between cash, options, RSUs. Whichever is your favourite, take it.

The point is that the way it’s implemented is effectively a stock purchase plan.

Any time a company uses "flex" in the name I now associate it with generally making things worse. "Flex PTO", "Flex Pay", "Flex Role" (aka remote but not really)

It limits the downside too. There's a lot of upside already to making 300k+/year and investing it wisely.

Guaranteed millionaire status with close to 0 risk. Look how spoiled many of us have become in tech, though, that we have people like you saying this. It's not gonna last forever

Saying that RSUs have more upside than full cash comp has nothing to do with being spoiled lol. It’s just a mathematical reality.

The spoiled part is saying that it's unattractive due to limiting upside, without appreciating that it limits downside too.

Most who got RSUs over the last two years lost big, and I bet they regret having a variable comp component now. Choosing RSUs over cash was a horrible choice for most in recent years

Hopefully GenZ/Millenials are learning the important lesson about fair value and fundamentals

Sure, and those who got RSUs over the last decade gained big. So what. Obviously stocks go up and down.

You sound pretty smart and well versed in the stonk investing.

Going to be great to see many of the 80%ers in tech have to face reality when the recession comes next year... hope you're a 20%er.

To be clear, Tech employees have been grossly overpaid the past decade (including myself). That reality is ending soon... get used to it

Stonk investing? Lol. Given that you’re just rambling at this point I think we’re done here. Good luck.

Grossly overpaid? What are you basing that on? Every company that is paying big bucks is generating revenue that is 5x+ the cost of the employee.

Many tech employees are underpaid, if anything.

It seems your bitterness is clouding your ability to have a constructive discussion here.

And your compensation choices are valuable information to Shopify and indicative of your "buy-in" to what they are doing....and therefore could be used against you.

Also, mechanically, as someone who was paid primarily in RSUs last year, you pay taxes based on their value at the date of grant. This is painful if they go down quite a bit between when you receive them vs tax time.

That hasn't been my experience. RSUs are taxed at vesting in the US.

This isn't true for RSUs in the USA. You're taxed on the value at the time when you receive them.

This doesn't sound right. You pay taxes when they vest, not when they are granted.

It depends on the country and tax law. What you said is true for the US.

> With RSUs, you are taxed when you receive the shares. Your taxable income is the market value of the shares at vesting.

You pay taxes at date of vest not grant. Small terminology difference, but important - if you sell your RSUs immediately, you never lose $ after taxes.

https://www.schwab.com/public/eac/resources/articles/rsu_fac...

In Europe, you pay taxes, as soon as you get them.

In my part of Europe, you pay on sale, not vest or grant.

Totally depends on the state. In Ireland you don't pay anything when the stocks are granted to you (you're promised X stocks in Y months), you pay income tax (PAYE) on them when they vest (you receive the stocks) and then you pay capital gain tax (CGT) on the gains (sell price - vest price) when you sell them.

Example: you're granted 1 share today to vest in 1 year. In 1 year the share is worth 100, it vests and you pay PAYE in this (it can either come from your salary, or by selling the stock). If the stock rise to 150 and you sell it after, you pay CGT on 50.

> Example: you're granted 1 share today to vest in 1 year. In 1 year the share is worth 100, it vests and you pay PAYE in this (it can either come from your salary, or by selling the stock). If the stock rise to 150 and you sell it after, you pay CGT on 50.

Huh? Can you actually keep the stock and give revenue the money out of your post-tax? I wasn't aware that was possible.

Yes. To be fair, I never tried it. But my broker (Morgan Stanley) allows you to select how you want to receive them, the default method is "sell to Cover" (sell just enough to pay taxes) but you can also select "Sell All Shares" and "Pay Cash to Cover Taxes".

Huh, interesting. I used Schwab and don't remember ever seeing it. That would definitely have been worthwhile at some point in 2014.

This isn't correct. You pay CGT on the difference between grant and sale

The one loophole is to sell with 4 weeks, that is CGT exempt.

Where in Europe?

Actually it can be either way: https://www.cooleygo.com/what-is-a-section-83b-election/#:~:....

83b is offered to very select few and most of us regular folks just don’t have that option. Either way it would be a terrible thing to pay tax at time of grant and the stock takes a hit.

This varies widely country by country. I think your case applies to Germany(at least for options). Most of the Nordic and Baltics pay tax on value at vesting afaik.

I heard some German employees got screwed by option grant taxes when the stock tanked between grant and vest. Some even took loans to pay the taxes.

It's taxed at vest time.

Most people should always just sell the stock immediately to cover tax burden. I mean, do whatever you want, but why set yourself up for tax liability risk at all. There are tons of other good investments out there that will mitigate concentration risk.

If there's actually a strong fundamental basis for upside (not 10x sales fantasy valuation), it could be prudent to hold in some cases

Isn't the tax already withheld at the time of vest? I mean sure at some point your tax rate is going to be much higher than the withholding rate so you end up paying extra over it.

Concentration is the real risk. I know many people at Apple and Microsoft whose only investment is their company stock. It has worked out well for them but they're just one big scandal away from disaster.

No tax is withheld at vest time. At least in the majority of cases/usually.

Holding vested RSUs is only wise if your conviction is that the company you work for is the best investment available at the time.

You can easily sell them and invest in other stocks instead, which reduces your risks substantially

> No tax is withheld at vest time. At least in the majority of cases/usually.

My last two employers deducted shares at vest as tax. This is in US, btw. I am surprised it isn't the common practice. The only problem was that the withholding rate was too low for my effective tax rate which means I always have to pay estimated taxes.

Google and Facebook both deduct shares at vest. The default is something like 25%, which isn’t too far off from most folks’ effective tax rates. Yet, base comp tends to be withheld at marginal rates; so if you don’t change anything, you can still end up owing a decent amount.

> The default is something like 25%

Default withholding has been 22% now for a few years. I bring this up because the gap between default withholding and the higher marginal rates has widened compared to the years it was at 25%.

> Yet, base comp tends to be withheld at marginal rates

To clarify, default withholding on base pay uses your bottom tax rates. It assumes you have no other income, so it will calculate based on standard deduction, 10%, 12%, then working upwards. So I wouldn't use the word "marginal" to refer to base pay because most people understand that as their top tax rates.

This means that for bonus, stock, and other compensation, it's reasonable to increase withholding to reflect the top tax rates.

> most folks’ effective tax rates

A bit of an aside, but I'm not a big fan of the idea of "effective tax rates". It's not a term the IRS uses, but something that tax software companies like to push for whatever reason. You also can't do much with it in practice: regarding withholding, it's not useful and potentially confusing.

Thank you for the correction, and yes I agree with everything you wrote!

RSUs are refreshed annually. So if the stock price is now in the doldrums, at least you can hope to get the refresher at a good price in February (or whenever).

This is not true for all tech companies, including FAANGs. For some (many?), the first grant is all you are entitled to, and subsequent "refresh" grants are based on performance, manager discretion, or other non-guaranteed criteria. Hence the "4 year cliff" many people complain about.

True. I was talking about Meta specifically (but failed to be explicit about that).

The refreshers at Meta are mostly mechanical based on your role and level, and they’re allocated in dollars even though the grant is converted to shares at a specific date.

I imagine the dollar amount will get lowered over time as the stock price falls though.

Otherwise the company is creating a lot of dilution for shareholders. e.g. to reach the same dollar amount requires more shares. And Meta is already crashing explicitly because their operating costs are out of control and outpacing their earnings growth

But that would just be pragmatic, they may not actually be doing that.

Good management in this situation would be refreshing grants only for the top half of performers and letting the others choose to leave, IMO

not in most companies they arent

There is risk involved for both parties. It's not cash, even if it has been treated like it in the past.

Most companies give cash bonuses when the stock tanks. I remember Microsoft doing this and I think I read recently Amazon was doing it too, or at least adjusting the mix of stock vs cash compensation.

Microsoft has not done this recently.

It happened under the Balmer years a few times.

Amazon never did this. They gave some extra stocks.

Inflation already cut my salary by 12% a year lol.

>It's a recipe for a lot of people swapping jobs just to keep their incomes at the same level.

Job swapping assumes these tech companies are no longer under a hiring freeze. It also assumes that these companies won't recognize why the mad rush of job swaps is happening and just lower the salaries for new hires.

> If you're paid 50% in stock, and the stock falls by 24%, you just took a 12% pay cut.

On top of this, my experience is that a shocking number of people getting a large part of their comp in RSUs don't diversify when they vest.

I don't work at a FAANG, but 1/3 of my TC is RSUs. Most of my coworkers look absolutely aghast whenever I mention that I liquidate all my vested shares as soon as the trading window is open.

Many of my friends that do work for FAANGs, getting >50% of their TC as RSUs likewise don't diversify as soon as possible, but hang on to it.

What's crazy is if I ask my coworkers "If you had that same amount of vested RSUs in cash, would you invest in our company?" They all laugh and say "no!", but then immediately claim that they won't cash-out and reinvest.

Point being I suspect that individual net worths of a wide range of tech workers are getting absolutely destroyed right now.

What about capital gains? I hold mine for a year because I was under the impression that liquidating immediately would cause you to pay short term capital gains rather than long term.

The stock price has to go up from the purchase price for capital gains. If you sell immediately on vesting this should be 0.

The face value of the RSU is treated as income (taxed) when it vests.

If the stock then appreciates, you have to hold it for a year to get long term capital gains tax on the appreciated amount (not the original vest amount).

So there's no tax advantage to waiting to sell. Only if you wait and it happened to go up in that time, and then you don't want to incur short term cap gains on that appreciation.

There is a big tax liability problem if you choose not to sell and the stock declines though. You may end up owing more in taxes than the stock is worth in some cases

22% of my RSUs (the federal withholding rate on supplemental income) are sold rather than released to me, so only a huge crash could leave me in the hole on my 8%-ish estimated taxes.

A huge crash like 70%, which happened this year?

Bigger; if I receive $78,000 out of $100,000 in shares and then they drop to $23,000, that still more than covers the $8,000 of under-withholding I need to pay.

Granted, $15,000 after tax income would not be what I was hoping for.

(I'm ignoring state income tax because my withholding on that happens to be correct.)

This would only matter if your stock immediately shot up the moment it vested. All the growth during vesting is taxed as income at the time of vesting.

Capital gains only covers the value increase over the year you hold the stock after its vested.

If you work at META, and then immediately on vesting diversify and don't touch the stock for a year you'll reap the same capital gains benefits but with a diversified portfolio.

You also have a wide range of defensive strategies you can apply that you can't if you're locked into trading windows. Say a META employee was very bullish on FAANG in general and at vesting put all their money in GOOG. If they were nervous about this week's earnings they could have either closed their position to see what happens, or bought defensive puts to lock in a maximum loss. Had they instead chosen to hold META they would have neither of these options.

There are cases for recently IPO'd companies where you vest then have a potentially 6+ month lockout period for trading. In those cases it can make sense , provided you have seen substantial gains in that lockout period to keep holding for tax reasons.

Thanks so much! I just sold my RSUs thanks to this info. Very much appreciated.

This is country specific. The stock grant price and the vest or sale price are used in my country to assess gains, so you still have capital gains to pay even if you sell right after vesting

> Most of my coworkers look absolutely aghast whenever I mention that I liquidate all my vested shares as soon as the trading window is open.

I spent a lot of the last decade at facebook. I immediately cashed out every single vested RSU and plowed the money into broad market ETFs.

It always blew my mind how many of my coworkers were willing to leave a huge chunk of their net worth invested in their employer's stock.

As you might imagine, I'm feeling pretty good about my strategy right now.

I spent five years at Facebook (2013-18) and the best move I ever made was to ignore the existence of my shares until 2017. But yeah, generally the right approach is to diversify.

From 2013 to 2020 (at which point the USG turned dollars into Monopoly money), FB only barely outperformed the S&P500 while also being a volatility risk.

Looking at historical prices, that is simply not true. S&P doubled in that time period while FB went up about 8x.

Yeah, I literally left at the peak in 2018 before the Q2 earnings.

Clearly I was holding the place together ;)

> a shocking number of people getting a large part of their comp in RSUs don't diversify when they vest.

Can confirm. A couple of decades ago I was working at EMC. Back then we got options instead of RSUs, but I basically always cashed out as soon as could and moved the money into other things. I figured I already worked there and had the stock purchase plan and the unvested options, so I didn't need more eggs in that basket. All of my coworkers thought I was crazy ... until I watched many of them ride the stock from $114 down to $3 hoping all along that it would come back up.

I was lucky to have learned the lesson the easy way, but I'm pretty sure they all learned it too. Also pretty sure that many of my former FB colleagues are right now doing exactly the same. Twenty years from now, if HN hasn't collapsed into a black hole of toxicity by then, we'll probably be having the exact same discussion about whatever replaces FB. The wheel keeps turning.

Options are a totally different story than RSUs. If you exercise immediately, you’re throwing away a huge part of their value. From an efficient markets point of view, RSUs should be immediately sold but options should be held until the option premium equals the risk concentration premium.

Also, the fact that a single stock once fell from $114 to $3 should have no bearing on decision making.

> the fact that a single stock once fell from $114 to $3 should have no bearing on decision making

Recognizing the possibility that such a thing can occur shouldn't affect decision making? Sounds blinkered and crazy to me. It's exactly how my coworkers lost their shirts. Finance-bro jargon aside, you don't seem to understand basics like the kinds of options given by employers at that time (two types neither the same as the ones you buy on the open market) or even the value of diversification. But sure, go ahead and keep proving my theory about why we won't be having that discussion here in twenty more years.

And of course that sort of devaluation was not at all rare at the time. EMC was hardly an outlier. I did get rid of some of that EMC stock but held way too much of it even if it recovered some value over time.

While you're not wrong, doing this in the last 10 years either had you leaving a ton of money on the table, or diversifying into a highly correlated tech stock / tech driven fund.

Pay cut is relative. If you started 5 years ago you still wouldn’t have a pay cut. But if you only count the fall from the peak, yes you have a “pay cut”.

That’s not how it works. Meta (like many large employers) issues refresh stock grants yearly. So everyone’s current comp is down.

Is there some different treatment of money spent on options (vs RSUs) that isn’t apparent from the Shopify blog post? I’m not understanding why someone would pick options ever in this scenario but maybe I’m just getting thrown off by demo text in the blog post

Options cost, I believe, 0.4X current stock price for a 10-year option to buy at today's price.

It's a great deal if you plan to stay with the company for a long time and think the stock will go up quite a bit, because you multiply your gains.

The stock is down 70% to be clear. 20% is just what happened today.

Now there's three hits. Employees generally kept their stock. So their savings went down. The pay is down as you said. Lastly inflation.

In addition job mobility is down. There's still plenty of tech jobs but it's definitely down and not as easy to just switch.

It's one hell of a return to earth although perhaps overdue.

Yeah all those 1200 SqFt ranch houses in the valley might drop to something like 1 million dollars.

That was already going to happen anyway due to remote work. CA has some of the fastest falling home prices right now

No one ever seems to talk about the fact that RSUs should be treated as bonuses not as real income. It’s nice if they work out but you should never rely on them being worth anything.

Not only that but future RSU should be treated as part of your portfolio which means that you must sell every vesting cycle.

I did this while at Facebook eating the shit while the stock price grew, but now... I feel like a genius.

It’s definitely an interesting approach by Shopify and nice to see someone challenge the status quo.

What’s the downside though? Do you get the same dollar amount whether you choose RSU or cash? Does the comp compare favourably to the top of market companies who pay mostly RSUs? Can you potentially lock in a low strike price for your grant over four years or is it more like an ESPP? (Of course the last year showed this is not always a winning strategy lol).

My assumption is that paying employees in RSUs works out more favourable for the companies than paying all cash so I’d expect it to be lower if you take all cash (I have zero knowledge of accounting mind).

The online advertising party is over. It’s going to hit all advertising platforms badly.

Facebook has been hit particularly hard by the iOS changes, but that’s not the cause. If Apple hadn’t made that change themselves, government regulations would have been brought in that implemented it.

I also don’t believe the increase in AI is a solution to the regulations around tracking.

Advertising online is increasingly a black box, you put money in one side and the algorithm sends you traffic. The control and insight that used to be there is gone. I don’t believe advertisers will continue to trust this AI based future, I certainly don’t (have run an e-commerce store for 10 years).

I don’t want “deep tracking” and profile building. I just want manual controls and visible conversion tracking. But we are never getting that back.

> believe advertisers will continue to trust this AI based future, I certainly don’t

Why not? If ROI remains high, why would I care ?

GDPR already tightly regulates the use of AI for automated decision marking affecting consumers, and other regulators aren't too happy about the directions taken by either AI companies or advertisers.

So there's a very, very big "if" on future ROI.

>I don’t believe advertisers will continue to trust this AI based future, I certainly don’t (have run an e-commerce store for 10 years).

How do you advertise your e-commerce store?

I think you are confused by what Apple did with ATT.

Apple did not do anything to really prevent "deep tracking" and profile building.

In fact, the single primary casualty of their changes is the exact thing that you say you do want: visible conversion tracking.

Yet both Netflix and Disney+ are introducing cheaper ad-supported tiers. Consumers want cheaper services, at the cost of advertising.

Hacker News lives in a bubble of users that understand and value privacy, knows about browsers such as Brave, etc. The rest of the world just wants their influencer content.

Even further, consumers are content with being "the product".

If an average Netflix viewer watches Netflix 70 hours per month - they will spend 6 of those hours watching ads - to save $3. It's a sucker's deal. Sure, some extreme savers will be so blinded by the promise of CHEAPER that they will probably go for it.

The ad breaks are eye breaks and bathroom breaks. The health benefits are extremely valuable.

The only way profile building will survive is personalized recommendations from friends. Suggestions from people I know and trust would recover a lot of the current trust erosion: "your friends X and Y both have eaten here a few times" is a much stronger recommendation than "we think you'll like this based on trust us."

Indeed its pretty infuriating to see how fast you can burn cash, get meager results with no real understanding or knobs to tweak to try and help yourself out.

Is it entirely fraudulent? Are your ads showing up on a site that specifically tries to game the ad placement system? Who knows! Probably though, because the few times I've seen it tried the results were abysmal at best.

I was extremely bullish on Meta’s VR effort. The Quest 2 is extremely impressive and you really feel like peering into the future of computing.

I’m starting to realize that it may be the far future. The $1500 Quest Pro was just released to scathing reviews. The AR color passthrough feature sounds like a low quality joke. The headset is heavier and the battery lasts a hour or 2. The screen fidelity is still too low for productivity computing. The eye and face tracking result in extremely underwhelming animation that I can’t imagine adds any value to the social proposition. The primary Meta dream of all your social interactions in VR with friends, family and coworkers around the world is starting to seem more than a decade away.

And on top of all that, Apple looks like it may have a serious entrant into this market and might easily beat Meta to the finish line to the next computing platform.

Nobody but tech bros cares a whit about VR, sorry. VR is a toy, and a poor one at that.

I think it could be ok for conferences; if you're too lazy to go to DefCon for instance.

Yeah, and technologists don’t give a shit about what regular people think. When have they ever advanced the state of how we use technology? In 20 years they’ll be happily be using VR glasses, completely having forgotten their initial skepticism.

Outside of gaming ... I don't understand who the current efforts in VR are FOR?

There was an arstechnica article about Carmack giving a speech about the state of VR.

Apparently he was dismissive of some controversy regarding avatar details. And was disappointed that they weren't yet at the stage where they could hold "arena-scale support with thousands of avatars milling around".

Who wants that? I don't want to put on a headset to sit in the nose bleeds of some virtual world with Zuck or Carmack ... that only seems to appeal to: 1. Developers making the cool thing work. 2. The person on stage talking who gets to just put on a headset to appear before thousands of people.

That's it.... who are these efforts all for?

I actually think tons of people want virtual experiences. Concerts seem to be a great use case for VR. Exercise is a great use case. Meetings probably are too, certainly better than zoom.

My greatest concern is that all these virtual experiences are behind a paywall, first hardware and then pay-per-experience. Going for a walk should be free.

"I want to go for a walk, but not actually walk, and pay for it, while being bombarded by ads" said no one ever.

"Hello Neighbor. I'm not actually a woman but this is the default avatar and I don't want to pay money to change it."

"Hello Neighbor. I'd like you to join my professional network on LinkedIn."

"Hello neighbor, you won't believe what happened to this dog, come with me to learn more."

It could quite honestly depend on exactly where you live, maybe it is already a good idea. Maybe your neighborhood is plagued by cars and pedestrian hostile design, and you don't have time to travel. Maybe it is the middle of a blizzard. Unfortunately I think technology will encourage this, as our society is primarily optimizing for GDP (ad spend) and jobs (lack of free time and neighborhoods focused on life outside work).

I think it says something that a VR use case requires a dystopian future.

Dystopian is such a harsh word. I mean, for billionaire tech bros, it's paradise.

It wouldn't be the time humans have willingly created massive problems in order for an emerging technology that is necessary for economic growth to become successful.

How is this in any way necessary for economic growth?

Sorry, I said that backwards. Economic growth is necessary (at least in the capitalist system we are in). We need things to succeed to deliver economic growth. At a certain point large sacrifices will be made to ensure the success of a new industry that promises economic growth. I don't think VR is at this point yet, but it might be soon.

Cars in the US and the destruction of passenger trains is a good past example. Cars gave consumers more freedom but at a much greater price and thus role in economic growth. We made great investments into highway systems to subsidize the automobile industry. This came at the expense of passenger trains (among other things) which was a direct competitor to the personal car, but operated more efficiently.

Tying back to the original comment, if there is a way to monetize walking that can only be done in VR, incentives will flow towards promoting that VR system to succeed. Those incentives will necessarily undermine the free alternative of actually walking. This is all done in the name of economic growth.

I think the logic here is backwards.

Cars didn't become more popular (measured by usage per person) than trains because of the vast infrastructure that was built. Cars became more popular because they were more appealing and useful than trains (for the reason you mentioned - sense of freedom). Cars CREATED the industries you mentioned (highways, gas stations, dealerships, car insurance, etc) because consumers wanted Cars. The demand for Cars increased, new industries were created from the demand, and the combination of all of the above moved the auto industry forward, displacing trains. This isn't a sacrifice, it's the better product winning.

VR will succeed when VR is 'better' than the current non-VR options. People will use VR more, demand will increase, and current or new businesses will start building for VR. Lowering (or raising) the price of a VR headset, releasing new versions of low adoption headsets, or asserting that VR is the future, isn't going to increase demand. Usefulness increases demand.

I'm curious about what your other examples of that happening are. I'm trying to think of one where VR is at least sorta parallel.

I'm having trouble understanding how concerts are a "great use case for VR"... at a concert you sit/stand and look at the stage and listen to the music. Seems like that could be replicated with just a regular display and sound system, but that kind of remote viewing of concerts has never become mainstream. What about VR would change this?

Watching a concert on a display isn't immersive imo. You are still acutely aware that you're in your living room.

I guess I struggle to understand how being surrounded by hundreds of cartoonish avatars would improve the experience. It would be immersive in a sense, but also pretty clear that I was still not really at a concert.

I think the lack of avatars is part of what makes it compelling. Sure some people will do the "communal" experience, but others will have a set up that makes it feel like the band is performing for only them and their friends. Real concerts are sweaty and smelly and hot and other people can be distracting.

You can see it from any angle, with an infinite number of added effects possible.

It depends what you think the important differences between a broadcast concert and an in-person concert are.

Is it the limitless resolution, and great venue acoustics and sound system?

Is it about the fact you're meeting up with your friends?

Is it about the atmosphere and energy of the crowd? The dancing, the fighting, the mingling?

Is it about the fact that if the performer tells you to make some noise, doing that at home to a video stream would be absurd?

Is it about the fact you might meet an attractive stranger, and go home with them?

Is it the fact you can buy drinks?

Is it about the intrinsic authenticity of a performance by a human, not a recording played by a machine or a copy of a copy of a copy?

Is it about being a singular moment, having experiences that can't be paused or replayed and are all the more real for it?

Is it about getting out of the house, and not being a shut-in?

Is it the cultural cachet and the fact you can post pictures on social media so other people will know you're cool?

Some of these a metaverse concert might be able to provide - you could produce a very high quality video stream with good sound, and an ability to talk with your friends.

Others the metaverse will never provide.

I think legitimately there could be a product that you put on your face and get a virtual on-site with photorealistic avatars. Or a pair of glasses that give you multiple 24 inch 4k screens that you could work on all day. And a replacement for Facetime sounds compelling as well, essentially a holographic call where there mom shows up in your living room from the other side of the country.

And yeah the gaming case is already pretty compelling when you look at things like Alyx, so just imagine more of that plus AR games that don't take you out of the real world.

At the end of the day you are talking about a display technology that can produce anything from an animated chess set on your kitchen table to the closest thing I will ever see to a Holodeck in my lifetime. In my mind computing will absolutely make the move from little pieces of glass in our pocket to AR, I just think it's going to take 10 to 20 years for moore law and miniaturization to do their thing.

> Or a pair of glasses that give you multiple 24 inch 4k screens that you could work on all day.

This is my current experience and I have no desire to simulate it.

I've only every toyed with VR and the demos were pretty cool and gaming seems promising, but to my mind, we're already a bit too far into this latest wave of VR (I'd say the first one was the late 80's into the 90's) to call it early, and it seems pretty niche still.

The killer app for VR is unfortunately going to be porn, although it seems many stakeholders are unaware of that. E.g. Neither Zuck nor John Carmack seem to have realized this yet.

But it makes sense when you realize that VR is inherently isolating and is hard to use collaboratively/socially. This is a bug for many applications and a feature for porn.

Like always, leave it to porn to push the tech forward

I think it's live sports and entertainment. Yeah, image quality will have to rise first. But being able to charge $10 for a seat at the 50 yard line at the Superbowl is too good to pass up. Add in some features that only VR can give, not just the live experience, and I think that's the ticket.

No need to stay in your seat even, imagine seeing the game from the QBs pov

Create surfaces for ads. Zuck said as much.

You nailed one of the biggest problems with current efforts out of Faceb...Meta. They are trying to recreate physical experiences in VR including the exclusionary limitations of physical environments.

A concert in VR has none of the natural limitations of a concert in the real world. Every member of the VR audience should be able to watch the concert from any location. Everywhere from on stage with the band to it just in a window in SIMD other virtual space so it can just play in the background while doing something else.

Even "stage" is a silly concept in VR, the concert could take place in a Star filled nebula or the halls of Moria. A concert in VR could look like a music video of a band playing in some crazy location in impossible costumes.

VR clients should also be able to control what they see. Watching that VR concert they should be able to enable or disable whatever elements that they want. They should be able to change a parameter and shift the concert venue to some other motif or disable the rest of the crowd to have a private show.

Instead of any of that Meta is just building nosebleeds thinking people are interested in having those physical limitations. If VR doesn't enable experiences that would be impossible in the real world then it's just a shitty lower fidelity version of the real world. Zuckerberg can go surf on his private beach in Hawai'i whenever he wants. Everyone in VR should have the same luxury of a private beach, dwarves forge, or a space station orbiting Jupiter. Meta is building VR where users are just as excluded from private beaches as they are from Zuckerberg's private beach. No one wants to be as poor in VR as they are in the real world.

I mean, if you had the chance to experience being in the front row of the Super Bowl virtually vs watching a flat 2d perspective, some people would want the 3d immersive 'feel like you're there / presence' experience. Same goes for concerts, burning man type stuff, music festivals, an intimate jazz performance, a Broadway musical, going to a zoo virtually, tourism like being in the bottom of the grand canyon, etc.

They are not substitutes for the real thing they are substitutes for a 2D version that is usually pretty non-compelling.

The real limitation is that the lack of tactile feedback means that you are at most a spectator/voyeur in these experiences.

I'd be curious how exactly that would look. Front row super bowl, am I just watching a video of the the super bowl ... like I was in a seat? Does the stadium then just have VR cameras everywhere?

One interesting repeated promise in TV land was that one day you could pick your view, specifically for sporting events ... but that is very rare and content owners / producers seem uninterested in providing it. I'm not sure they change their mind about that ...

>One interesting repeated promise in TV land was that one day you could pick your view, specifically for sporting events ... but that is very rare and content owners / producers seem uninterested in providing it. I'm not sure they change their mind about that ...

The reason i guess is advertising.All those logos on the field are optimised for the specific camera angles

Apple bought and shutdown NextVR, which was doing most of the sports broadcasting in VR. So sadly for the moment, we don't really know what the state of the art is in that area.

That aside, any kind of large event is extremely problematic in VR, as the resolution just isn't there. Everything a couple of meters away just turns into a blur. So looking at a far away event just feels like looking at a 240p video. It's really not a good experience.

To further complicate the effort, you can't just move the camera closer either, such events are made to be looked at from far away. If you go up close, any kind of choreography in a concert will look weird and a sports event without a good view of the playfield wouldn't be great either.

There might be ways to work around that, by leaving camera choice to the user, use of multiple screens, virtual binoculars or whatever. But it's far from a straight forward process. Meta themselves still hasn't even managed to properly broadcast their own conferences in a VR format, it's all still just flat 2D videos.

When the action happens closer to the camera things get much easier, something like a boxing match with VR180-3D cameras in the corners might work well enough. Can't point to any real examples, but here is a fictional one[1] of how a fight might look in VR.

[1] https://www.youtube.com/watch?v=d2RqR6MtwG8

Yeah that's kinda what I assumed. TY for the comment.

I got to a lot of sporting events, I'm moving my head / eyes, refocusing constantly, specifically closer to the action.

I don't know how VR could capture all that visual data effectively and allow me to just look around.

Have you experienced VR film? Stereographic 180 degree SBS video? You'd just need something like ZCam k1 pro camera (although most videographers are using better stuff by now) that can do livestreaming and the big issue is dealing with heat + battery limitations at this point.

"just watching a video" makes me think maybe you haven't really experienced actual stereo video (3d movies don't count).

360 monoscopic videos like you see on youtube are not stereo video in case people are confused.

Another cool application would be home movies. Imagine being able to film your child’s first party from a headset and be able to relive it down the line. Would be pretty dope.

Hasn't Meta always said their VR project will take the better part of a decade to reach the mass market goal? Maybe I misunderstood them.

I think you've understood them correctly, but should you _believe_ them?

Metaverse is a virtual 3D world, like a MMORPG game, right? Do you necessarily need VR to participate in such worlds? I had a VR headset, it's very tiring to wear it for a long time.

I cant imagine a world where 2B users are using VR, but if that world happens, it seems like it will be long after FB gives up and runs out of steam trying to build the MV.

Investors will not tolerate years of huge losses, Zuck will probably lose his job

I think VR is fair bet with how batteries need to improve (elecrtic cars). They can work on system/algos and battery breakthrough will make it all viable some day

Apple will be the one to win VR. They’ll wait until the very last possible moment. All Meta is doing is making their R&D cheaper.

Google should bring back Cardboard. Even with crappy quality, people will try it out for $10.

Certainly seems that way with their entry into the advertising market. Watched and learnt from DoubleClick, Google and Facebook. Cut them off and now it's time to strike.

You're right about apple. Focusing on execution rather than bleeding edge innovation has certainly been a winning strategy.

I think you're right. On top of that, Apple isn't afraid to ignore the low end. Meta and Microsoft can have that market.

Even if they try to get the low end - they fail at it, their customers just buy the high end stuff, see iPhone 5C, iPhone Mini, iPhone Plus now - all "cheaper" and cancelled or not doing well.

It certainly helps that they’re already a hardware company.

what indicates Apple will even play in VR market?

Just individuals' hopes and dreams that VR will some day be useful I think.

Every report, rumor, public interviews from executives have pointed to a VR device in 2023.

*AR device

No, VR.

Google should throw resources into Project Starline and shift their focus from business to personal use. I get it's insanely expensive and that shouts "enterprise!" but people will pay a lot for a realistic enough experience of being with their loved ones that they don't get to see.

https://blog.google/technology/research/project-starline/

It looks like it's similar to Cisco's telepresence.

Unlikely, a significant proportion of VR sales are due to gaming. Apple may win the business VR market but it'll likely fall flat for all other uses.

Have you heard of Apple Arcade?

Apple is huge in gaming. Earlier this year, Mashable reported that mobile gaming was now 60% of the entire gaming market. Consumers apparently spend $1.6 billion per week on mobile games.

https://sea.mashable.com/tech-1/20432/60-of-entire-gaming-ma...

But how many of those hella-profitable games could even use VR? Pretty much just the "Core" genre. A VR 4x game is going to contain a lot of fluff.

I guess mobile will be the proof of the future of VR one way or the other. Mobile game companies have the funds to conduct the research to determine if VR increases profits and customer spend, and by how much.

That figure is for the Play store and the App store combined.

Yep.

Other articles I've read have said they are somewhere between Microsoft and Sony as far as gaming revenues go.

I was watching https://www.youtube.com/watch?v=x6AOwDttBsc about Meta's VR prototypes. They seem pretty clear-headed on where they need to get to, but a lot of it seems like a decade away. At double the price-point of Quest Pro, Apple may solve some of VR's issues (battery-life, speed, ergonomics and looks) but the screen-tech just doesn't exist yet.

I think you missed the most important point - no one wants VR apart from a niche audience.

No one wants VR because in its current state it simply sucks and is quite expensive for general adoption.

In the early days no one wanted computers either.

And VR will continue to suck if it remains tied to Facebook, like the Oculus stuff.

The Oculus stuff is no longer tied to Facebook, though? I got an email recently about account changes, and was prompted to create a new account, with the option to link it to my Facebook account.

If that's the case for all Oculus devices, that would definitely be a massive improvement. I still see some people here complaining about the Facebook link, though.

Bit of a false comparison, though. Computers obviously enable a lot more than VR seems to.

I think there will be a market for VR. However, I'm not entirely convinced games and entertainment are it. Certainly I think there will be a market for those, as well; but I can't shake the feeling that it doesn't actually add too terribly much to them.

The social aspect of entertainment is completely missed with VR. We want to do things /with people/ when we are being social. Is why people watch sports games in parties. Most of the folks at the party are marginally interested in the sport, but in the people they are there with.

For games, 3d shooter is certainly a genre. But it isn't the only one. And the casual market that they hope to capture is largely not the 3d market.

You know what would be a killer app kind of application for AR? A real life HUD you could just wear all the time. Anything that can be done with a smartphone these days but without the hassle of carrying a giant brick around that you need to fumble with.

But to get to that stage you need to at the very least integrate all that functionality into a set of glasses (more than 60% of all people already wear glasses daily anyway), and you also need direct brain interfacing control to make it practically usable at all.

Way beyond anything we can currently do these days unfortunately.

AR is a very different beast compared to VR. Such that, I agree moving to a HUD can be nice for many things. That said, requiring full body interactions for anything is a laughably bad non-starter. Looks great for performance art and movies, but is far from effective.

And, as I said elsewhere, also not gaming/entertainment focused. Arguably anti-social.

It's hard to say until the technology gets to the point where you can start to match what a monitor does. You'd need a 8k or probably higher screen for each eye plus the graphics card to drive it at ~144hz. Then if you want it portable you need a battery to drive it.

Once we're there then we can see what sort of future VR has.

I don't buy it. VR will always, by definition, be a race to feature parity with things in the real world. And escapism is often more about not replicating real life, such that all of the tactical feedback that goes into the majority of what folks thing will work in VR is as likely to be the reason to avoid it.

Think about it, even the amazing open world games like Zelda will be nigh inaccessible in a VR world where you have to actually climb. Yes, you can get some sweeping visuals where you can turn your head to see the landscape, but a large TV already goes a long way to getting that, with much much better controls for the movement. So, you can get enhanced "you can turn your head to look around," but at the tremendous cost of "everything else about moving and interacting is completely broken. You will still need obviously untenable item management. Want to have many weapons? It will be hilariously off looking compared to everything else in the world.

Can it help with some desktop management and such for work? I mean, maybe? It will definitely be a good aide. I'd wager the high level workers are already "retreating into their brain" for a lot of their work, such that I don't expect miracles out of AR assistance.

Robotics and control do have a lot of promise, of course. But, again, I'm more questioning gaming and entertainment.

>Think about it, even the amazing open world games like Zelda will be nigh inaccessible in a VR world where you have to actually climb.

Even if climbing is an challenge insurmountable then you'd just make games with out it. Elevation changes could be handled by predefined paths.

>Yes, you can get some sweeping visuals where you can turn your head to see the landscape, but a large TV already goes a long way to getting that, with much much better controls for the movement

I think you're way underselling the impact of VR. It's a massive upgrade and a different level of immersion. You don't see people face planting trying to jump off a building when it's a TV.

Plus those stationary treadmill things look cool as shit. If you get that working plus the headset it's really something. Even just taking an evening walk through Paris/Tokyo/the Himalayas would be bonkers if all the technology comes together.

I think you are under thinking how much effort there is to "make it an immersive experience." The /vast/ majority of game travel time is always with characters that are running. It is a bit of a gag in games. Try using the characters at walking speed.

And then think of transferring that to "we want you to feel like you are in a vast world.... that you can physically traverse in less than a day. Probably less than an hour."

You probably need to believe that mostly a younger generation will at some point buy into ambient socialization in VR, which is to say the metaverse/Second Life 2.0 I guess. I guess it’s possible but I’m not the target market.

Online socializing doesn't have to be VR, though. Witness by looking at all of the online socializing that happens today.

Indeed, for many folks that like the idea of online socializing, we like it /because/ it is not necessarily visual.

I'm not sure that I'd call current VR tech "the early days". The VFX1 and those arcade cabinet VR systems were the "early days".

The Occulus Rift came out six years ago. We are well into the phase of VR where improvements are incremental each generation.

> We are well into the phase of VR where improvements are incremental each generation.

If that's the end of it, VR is doomed to remain a curious niche. It struggles to deliver compelling results for thousands of dollars (headset plus powerful enough PC), and if all we ever get from now on are tiny incremental updates, we'll never reach a steady state where perceived quality, relative to contemporary 2D offerings, can keep up.

I would consider those arcade cabinets equivalent to time sharing computers in labs of yesteryear. Current VR is about like the 286, it does some neat stuff but more promise than delivery.

VR encourages staying in as opposed to going out - the whole thrust of technology should be that - so that humans could be more... human. The timeline where VR fits seamlessly in the latter is decades, away and betting on it as a company right now is madness.

Yeah, just like no one really wanted a Palm Treo or whatever flagship smartphone was dominant in 2004.

This is all about where the ball is going to be tomorrow, not where it is today.

I can email grandma and get directions to the park on my smartphone. The value proposition is clear.

I can ??? by strapping an enormous headset to my face, flailing my arms around, and getting sick to my stomach and lightening my wallet by $500-$1500 with VR headsets. What do I gain by doing this?

You are arguing against the opinion "it sucks right now, but it can get better" with "it sucks right now". Is your position that things that suck can not get better?

I've heard that exact same defense for 10 years.

When? When is this magic moment where it stops sucking? We've been told oh just wait for better hand tracking... oh wait for better screens... oh wait for portable/wireless headsets... oh wait...

Shit or get off the pot VR. You've had 10 years.

Tons of things have taken more than 10 years to stop sucking. Digital cameras, MP3 players, "smart" phones, arguably laptops...

I am not a VR believer by any stretch, but this is such myopic thinking.

VR has been around for fifty years, that's a pretty long time to not produce any convincing results.

And all those inventions piggy backed off a very rapid pace of hardware getting faster, smaller, more power efficient and cheaper at the same time.

Moore's law meanwhile is dead, the rate at which CPUs/GPUs get faster is slowing down considerably, and VR needs a lot faster and cheaper and more power efficient hardware just to become affordable at reasonable quality.

That's not a good starting point, especially when you're a publicly traded company and your future depends on reaching that inflexion point soon™.

And then you still run into practicality problems:

• User input is still fairly clunky. Touchscreens just removed most of the friction of computer input devices, VR puts it back in. That won't make it particularly popular. Granted, future advances in hand/finger tracking might solve this, but this adds another set of sensors and hardware to make sense of them, when VR headsets are already struggling to reduce the bill of materials to become affordable.

• VR needs lots and lots of space. Digital cameras, MP3 players, smartphones, laptops, … for the most part reduced the amount of space a family needs to do things, compared to what came before, which made them a no-brainer for all demographics. No amount of technology improvement can really reduce VR's space demand without compromising on user experience. Not a problem for US tech bros, but ask an European or Asian family what they feel about doubling their rent so one family member gets enough space to use VR. Not gonna happen.

„Shit or get off the pot VR. You've had 10 years.”

What a strange anthropomorphization of technology/product. Is this somehow hurting you personally? Is there some other technology being developed by someone that is somehow not “getting it’s turn”?

All the tech you like took much, much longer to develop than 10 years. The first computer was 1945. The first “mobile” phone was 1946. The first video phone was 1956. The first “internet” was 1969. Electric cars were commercially available in 1900. These were all developed by giant companies that no longer exist.

No, not really, because while nobody enjoyed the pre-iPhone smartphone experience, it was obviously useful and there was adoption - think Blackberry.

VR though... it's really hard to imagine use cases that will cause a billion people to buy a headset and wear it for a number of hours a day.

The same thing you gain by using headphones over speakers.

And you can get into VR for much less than $500. Have been able to for years now.

Most people prefer speakers...

And yet people use headphones everywhere. Especially in apartments to avoid annoying neighbors.

Speakers are, with few exceptions, inconsiderate of folks around you.

> And you can get into VR for much less than $500. Have been able to for years now.

Which isn't good then, it's so cheap yet barely adopted?

10m devices sold per year (and growing) is not "barely".

Most importantly, using a smartphone is a very low-friction experience. It takes two seconds to pull it out of your pocket and unlock it, and two seconds to put it back in your pocket. Same with a desktop - to use it, I sit down at my chair, maybe press the monitor power button, and I’m good to go. When I’m done, I get up from the chair.

VR headsets are far more bulky and intrusive. They don’t allow for easy context switching between cyberspace and the real world, and they’re not portable enough to be used on the go like a smartphone.

Yep. They weren’t a low-friction experience before though.

Have you compared headsets lately? Because just recently I have, and this shit is changing. A 2017 Vive is very different from a 2021 Oculus from that friction POV. With nm chip architectures and battery tech improving, it really doesn’t take that much imagination to predict where they will be in 2025 or 2030.

Personally, I think one of the killer features for this category will be matured inside-out hand-tracking. Not having to do anything but put the headset on your head makes a huge difference.

Add that you've got a lithium battery pack pressed against the back of your head -- those things don't have a perfect safety record. If it blows up in your laptop, you probably won't be permanently disabled.

Or that excessive use of the device will probably have long-term consequences for your eyes. As a long-time user of smartphones, I am beginning to wonder if staring at a small screen has accelerated aging in my eyes. I can only imagine the damage from poorly calibrated VR glasses.

Did you try getting directions on a smartphone in 2004? How about showing your grandma how to send an e-mail in 2004 on a smartphone?

You gain nothing - not right now, not today. Nobody is holding a gun to your head. Nobody is saying this stuff works today.

Use your imagination. You can: - Attend meetings and feel an infinitely greater sense of presence than Zoom - Whiteboard with your coworkers - Play games more immersive than any you’ve ever played before - Extend a tiny laptop into a massive multi-monitor setup - on the go - Spin up a massive movie theater for yourself on a plane flight - …

Do people really not remember the fairly large business adoption of Black berries pre-iphone? They remained the standard issue government smart phone even into the 2010s (DC at that time was very much like House of Cards in the usage of the device).

The iPhone completely changed the game, no doubt, but there were a lot of non-techies that had smart phones and used them heavily prior to the iphone's release.

This is true. Hard to call them “smartphones” by the current definition though. Blackberries were internet communicators, useful for work, calls and e-mails. Beloved by professionals for their utility, tactility.

Apple made a successful bet that multi-touch screens/UI done with sufficient discipline could be not an enormous pain in the ass to use. And that a well groomed AppStore would create a plethora of opportunities for change. Without Android quickly following that model we wouldn’t then have the arms race of functionalities. This is probably something Meta is hoping for - that this time around they will have a better seat at the table than they got in that smartphone arms race. I’m looking forward to all of it.

Bingo. It's been about a decade now since the revival of VR. We've had 10 years of, "everyone is going to be computing in 3D". It never materialized. Worse, it looks like the content is shrinking and stagnant.

Covid was it’s gleaming opportunity too.

10 years or not, the tech is simply not there yet while being far too expensive for what it is. It's not exactly a recipe for growth or success. Like trying to make electric cars a thing in the NiCd battery and brushed motor era.

I said that for a long time but honestly it's getting cooler. The exercise applications alone are a huge market (in theory almost everyone).

what are the exercise applications? Isn't exercise a thing where your form matters, so you need to be able to see your own body?

To date I've enjoyed playful activities like swatting at glowing targets, boxing, or virtual light saber fighting.

Assuming you aren't serious about becoming a jedi and don't do it enough to give yourself RSI it should be OK. Maybe not as good as a personal trainer but I'd be shocked if it was worse than sitting on the couch, on balance.

Also, with the cameras on the headset as well as peripherals they can give you some idea of where your body is.

Noone wants shitty VR, which is what current generation VR is.

VR has a market of over $5 billion per year. In 2021, over 10m devices were sold, and its still growing.

That's a bit more than a niche.

Citation?

Google.

vr market value

vr devices sold

If I can do it, so can every other person on this forum.

I call bullshit. VR has a pure ergonomics problem and Meta is chipping away at that every year, this Quest Pro is so nearly there and the second we get VR sunglasses it's done. It's over. It will become mainstream and the PC will go the way of the typewriter.

I think “VR sunglasses” is an oxymoron. Isn’t the core selling point of VR deep immersion?

AR perhaps, but that’s a whole different set of use cases. A single device cannot adequately cater to this “spectrum” of full vs, semi-immersion.

> VR sunglasses

Unless they completely surround your eyes to block outside light, VR "sunglasses" would absolutely awful. For VR to work well, you need immersion, which is not possible when the edge of your vision is filled with the scene of where you are in the real world.

AR sunglasses on the other hand would be great, but I'm not convinced AR has much of a future outside of some specific niches.

The biggest hurdle for any sort of portable VR or AR is compute and power. VR is incredibly compute intense, which means portable headsets only have a 1-2 hour battery life and need a heavy battery.

Pre-iPhone smartphones catered to a niche audience. Tablets weren't very popular in the market pre-iPad. Bluetooth headphones were around for over a decade with a lot of people ignoring them before Airpods popularized them. Personal media players weren't nearly as mainstream before the iPod. Almost all of these product markets existed and mostly catered to niche audiences before Apple jumped in.

Of course, those are mostly their successes. They had stumbles too, no doubt.

If there's one thing Apple excels at, its convincing the mass market to adopt technologies that currently only cater to a niche audience. I have no idea what their plans for VR are, but I do imagine if they do something in it they'll make some waves. But maybe it'll turn out like the Newton. Maybe they will never launch a VR product. Who knows.

It’s not so much that the technology is niche, it is that the use cases are niche.

What is the main killer use case of VR? How many people want it or would enjoy it or would pay for it?

I definitely agree the mass market appeal to VR is yet to be proven. This is a big part of why I say if Apple chooses to launch a VR headset. It may never be proven to be a successful mass market technology, and if so, I imagine Apple may never release a VR headset.

The main use cases I see are gaming, and of that market only certain kinds of games. Then on top of that its challenging having the space to play those games safely. Personally, I really enjoy my VR headset, I love playing games like Star Wars: Squadrons in VR.

> The main use cases I see are gaming

I think of that in terms of “escape from reality” or “entertainment”.

I suppose there are also educational use cases and remote control use cases.

Are you living in a different timeline than me?

Ever since the ipod came out people were salivating for the possibility of an iphone. Upon it's release the hype for it was incredible and had been building for years.

Virtually everyone I know has a pair of non-airpod blue tooth headphones.

Everyone had a walkman, then a discman, pre-ipod. Yea adoption of early mp3 players wasn't particularly high because they were not that great, but the same is true for the mini-disc (which I believe had even lower adoption). I still knew quite a few people that had pre-ipod mp3 players.

Even among my gamer friends very, very few people have an Oculus. Everyone of the few people I knew who got an occulus (including myself) has had the exact same experience: First month, "wow this is a game changer!" second month, it's collecting dust. I know of literally no one who has used a VR headset weekly for a period longer than 3 months.

> Ever since the ipod came out people were salivating for the possibility of an iphone.

And yet barely anyone bought the devices which were already on the market which could have filled that niche. Which yes, they existed, almost exclusively listened to music on bluetooth headphones through my phone before the iPhone released. Even streaming internet radio over a 3G connection before the non-3G iPhone was released. The market wasn't wanting a smartphone, they wanted specifically an iPod phone. Because, once again, Apple is great at making the general market want tech that roughly already exists, but just isn't very popular yet.

> Yea adoption of early mp3 players wasn't particularly high because they were not that great

There were good MP3 players on the market before the iPod came out, but they weren't very popular. There was a bit of a lack of ecosystem with them and a massive lack of marketing.

I do agree there's not a large market for VR at the moment, and I agree its entirely possible there won't ever be a large market for it. I'm not saying its a given Apple will make a VR headset, I'm just arguing if they do it, it'll probably make a splash given their track record of releasing decently polished products with a good enough ecosystem to get the market to buy it. I don't think Apple would just dump a half-baked VR headset into the market.

> Even streaming internet radio over a 3G connection before the non-3G iPhone was released. The market wasn't wanting a smartphone, they wanted specifically an iPod phone.

In the US, I was not even aware of mobile broadband availability before iPhone 3G. And whatever quality mobile internet was available, I assumed was very costly and metered.

Some combination of the timing of iPhone 3G release coinciding with widespread deployment of 3G mobile broadband access and/or Apple negotiating ATT to provide unlimited data made it possible to have a little pocket computer that could stream whenever, wherever, however much you want.

That was a game changer. A lot of the big tradeoffs that people had to make with smartphones before iPhone 3G disappeared to make it a very compelling product compared to its competitors.

> In the US, I was not even aware of mobile broadband availability before iPhone 3G.

It was a $15/mo add-on to get up to 3Mbps unlimited data on my phone on AT&T in the US in 2006.

3G came out multiple years before the iPhone 3G.

I had a pocket computer with unlimited data on AT&T the day people were buying the original iPhone.

Interesting, I was in my early 20s, and was not aware. Or maybe $15/month seemed like a lot back then.

I just remember mobile companies charging nickel and diming for everything extra, so I never bothered to try and use anything that was not phone calls/SMS since those had been made unlimited and included in cheaper mobile plans.

If you had seen it, good chance you would have shrugged it off. Most phone's WAP browsers sucked. You would have pretty much been paying $15/mo to read sports scores or delayed stock ticker quotes on most phones sold in the store. They definitely weren't expecting people to use the dumb phone internet connections for much data.

I would buy unlocked GSM phones online and just pop my dumb phone SIM card into them. AT&T seemed to not recognize the IMEIs or at least wouldn't care that they weren't the cheap dumb phone on my plan. Then I'd have apps like Opera Mini and Google Maps. IMAP email would sync on the device without issue. internet instant messengers worked fine. I could stream music through m3u's. When the iPhone came out nothing about it seemed revolutionary to me, as I was a part of that niche market. Most consumers didn't even realize they could do those things on their phone, and for a lot of users it would be too complicated for them to even really consider it.

> Bluetooth headphones were around for over a decade with a lot of people ignoring them before Airpods popularized them.

This is just flat-out wrong.

They may have shot up in popularity after phones stopped having headphone jacks, but there was certainly a Bluetooth headphone market before that.

> Personal media players weren't nearly as mainstream before the iPod.

Again, wayyyyy off base.

Personal CD players were VERY popular and common in the late 90s. I'd wager Napster and the advent of CD burners popularized them even more.

> Almost all of these product markets existed and mostly catered to niche audiences before Apple jumped in.

Cringe. This reeks of the attitude common attitude around 2010 where Apple fanboys would praise Steve Jobs for his innovation when Apple would implement a feature into iPhone that Android had for years.

> If there's one thing Apple excels at, its convincing the mass market to adopt technologies that currently only cater to a niche audience.

They excel at UI/UX. From a purely technical standpoint, they're often a couple years behind, but if you polish the crap out of it, people don't notice.

Seeing people with Bluetooth headphones was a rarity 10 years ago. They existed, yes, but so did smartphones before the iPhone. Some people had them, but the vast majority of the market of headphones or phones didn't care.

By personal media players, I'm talking about MP3 players and iPod-like devices. Essentially post-CD players. They existed, they weren't popular. Even the initial iPod took a while to gain a real market presence.

I'm not an Apple fanboy, but I can definitely acknowledge there were lots of markets which were largely ignored by the mass market until Apple made it cool and easy to use. I had a 3G phone which could do video calls when the iPhone came out, so I definitely understand that Apple isn't usually on the bleeding edge of technology, they're just the ones that often manage to refine it enough to be acceptable by the mass market.

> By personal media players, I'm talking about MP3 players and iPod-like devices. Essentially post-CD players. They existed, they weren't popular.

They weren't popular because they just simply sucked.

Flash memory was still expensive, so they'd usually only have enough room for 10 songs at the most. They didn't have displays to see file names, which I suppose isn't a big deal when you only have 10 songs.

> Even the initial iPod took a while to gain a real market presence.

I don't even consider the iPod to be innovative in any way besides maybe the click wheel. It was just that the iPod was the first product that was actually designed to be a good product and not a cheap money grab designed to get a few dollars from all the Napster users.

To put it more bluntly, IMO, all the other products were made by boneheads. The iPod was the bare minimum of what an MP3 player should have been. It wasn't innovative, it just wasn't made by boneheads.

Personally, I had always expected MP3 CD players to become a thing. I didn't like the iPod's idea of a hard drive (Though they weren't the first to make a portable MP3 player that used a hard drive). I expected them to have high failure rates from head crashes.

iTunes was the killer app, not the ipod.

As someone who owned mp3 players, portable CD players, and portable mini disc mp3 players, and did not find itunes or the scroll wheel appealing, the iPod's main innovation was almost entirely just "heavy marketing".

Blackberries proved the smartphone market. Many people used and loved them a ton. VR not there yet.

Apple takes existing markets grows them and sets the new standard: PCs, smartphones, fitness trackers, headphones… Not first or early mover.

While Blackberries were some of the most popular early smartphones, the overall market size pre 2007 was way smaller than post 2007.

https://www.statista.com/statistics/263437/global-smartphone...

The market for smartphones was miniscule before Apple made the mass market decide they really wanted one. I don't deny there were smartphones which existed before the iPhone, I used them and enjoyed them. But most consumers didn't have them. These days most people over the age of 16 have a smartphone, you can't say that was true in the Blackberry heyday.

Apple didn't make the smartphone. Apple made the public want to buy a smartphone.

It's getting better every year, the hardware just wasn't there before. I think the sweet spot will be in new vr-native experiences and not awkward skeuomorphic-ish implementations of the offline world in VR(which is what horizon seems to be trying to do) or gaming. Turning a 2D experience into a VR one will continue to have worse graphics and odd mechanics for the foreseeable future, and gaming in VR is just not relaxing compared to sitting on the couch with a controller. Not everyone wants to flail about and gesticulate after a long day of work.

I personally like to sit back and watch random "experiences," virtual tours and stuff and when I introduce someone new to VR I show them these first rather than games. Complete immersion without having to think about what to do with your hands.

Another interesting experience is Liminal https://liminalvr.com/ It uses sounds/visual stimulation with the intent of affecting your "mood" and it's being developed by bona fide psychological researchers. It's truly something that can only exist in VR!

Apple's advantage in silicon will win the AR/VR war. Meta is out there talking about 1-2 hours of battery life for the Quest Pro. I'm very curious to see what performance Apple's headset/glasses/whatever provides on their own chips.

Meta seems to be trading the capital they have built up to advance a new era of 3D immersive computing. If the talk of creating a more open system is genuine, and the hardware itself becomes ubiquitous and cheap, Apple's closed system dependent on expensive marked-up hardware will eventually collapse.

I never understood why Google did the cardboard thing and ... didn't keep fiddling with it. It got so much attention and was a lot of fun.

I still use mine occasionally. I'm not using it for anything spectacular, but every once in a while there's an AR thing or a Youtube video that's worth watching that way.

because it's Google

I had a friend who used it and it overheated her phone. It had problems after that. I never used the cardboard kit I got because of that story. I have no idea what the failure rate data was, but anecdotes are enough to kill a product.

If an app breaks your phone, it's the phone's fault.

Sure, but it's still broken.

IDK, that just sounds like any android phone I've ever owned after any 3D game I've ever played on it.

They did keep working on it and released Daydream, which was dedicated holder for phone. They included VR support in Android and there were a few supported phones. But they canceled it and removed compatibility from OS. I still have mine, which was free with a Pixel phone, but not sure I can use it.

To me it made sense as cheap technology demonstration. Maybe allowing something further.

Hololens may give Microsoft a headstart into entering AR/VR for businesses.

I went from

Cardboard -> Note 4 with Gear VR -> S8+ with newer Gear VR -> Oculus Rift CV1 -> Oculus Quest 2 -> Selling my Quest 2 (and CV1) because Facebook (temporarily) made Facebook accounts mandatory to use it.

I doubt I'll ever purchase another VR headset from them in the future.

Cardboard blew my mind at the time, I was so excited to get a taste of VR.

I went Cardboard (though used it very little, probably only 1 hour cumulative) -> HTC Vive -> Valve Index.

I'll probably buy a Valve Index 2 if it ever happens.

Portable VR is highly limited by battery power. VR requires high pixel counts and high framerates to be immersive, and pushing that many pixels uses a lot of power.

If Zuck had never embarked on his VR adventure, and Apple today came out with a device exactly like the Quest Pro but with no advance leaks about what it’s like, people would be stunned.

But the VR excitement pool has been poisoned by Meta’s image and a decade of overpromise.

If history is any indicator, Apple is no where near releasing an AR/VR headset. They are never first to market, they have always waited until the tech is mature and people are ready to deliver a cohesive amazing experience. The argument that iphone was first to market could be argued for first without a keyboard, but just about everyone had a cell phone and most had some form of smartphone at the time.

Where would VR even be if Zuck hadn't bet facebook on it? I'm not sure it'd be getting the attention it is, the hardware isn't ready, the software isn't ready and frankly users aren't ready.

Cardboard and Daydream. Daydream was like fifty bucks, included a useful controller. Had to chuck it in the trash.

I personally think that the AR/VR will have a big market in the future. The question really is, how far away? 5 years? 10 years? 15 years? And will Meta be one of the winners when it's all said and one?

Meta is hellbent on creating a platform so they can be the iOS/App Store instead of just an app.

The stock is sliding because we're entering/in a phase where raising money is hard and cash is king. Companies are trying to pull back on investments and bets that might or might not pay off. Meta just told Wallstreet that it doesn't plan to pull back on Metaverse spending in 2023.

The problem for Meta is that it's almost certainly not going to look like what they're selling with their Metaverse which is some kind of Second Life knockoff. They went all in on a failed plan.

Well if all the end up with is the best hardware that's definitely going to be worth something. But what they really want is the app that people spend all their time on.

What they really want is to be the iOS and the App Store. They don't want to live under Apple and Google's roofs anymore. They want control. And they want to be the one taxing apps 30% instead of Apple and Google.

Maybe, they do have their own store for VR apps but they also allow you to connect the headset to a gaming PC and use Steam games. They also support OpenXR. So they don't seem to be building a walled garden, more like a garden with a fence you can step over. Maybe that'll change in the future but if it does they'll piss off a lot of their customers and force them to switch to other hardware.

I think Valve will get the best hw award.

They've been consistently the best since the beginning

I think Apple will come out with the best hardware.

Why?

1. Best mobile SoC designs by far. Not even close.

2. Hardware company at heart. Their culture is built for hardware.

3. Way more supply chain and mass manufacturing experience which means cheaper manufacturing.

4. Hardware designed for iPhone, iPad, Mac can be reused for VR/AR which means lower costs and more economy of scale. IE. M2 is used on both iPad and Macs. M2 cores are derived from A15 from iPhone 13.

My guess is Valve is bought by Apple at some point.

Uh...are you forgetting that Valve owns Steam?

There's no way Valve would ever be sold to Apple.

Ya i know, do you think the Gov would not allow it?

No, I think Valve doesn't want to be bought, whether it's through an acquisition or by IPO.

Valve was bootstrapped by Gaben. It doesn't have any investors that want an exit, doesn't need to raise funds, and Gaben is already a billionaire. They have no incentive to sell themselves.

I def agree, but things change. Gabe will get older at some point and something will happen. If not him, his kids.

Does Valve have a great track record with hardware? The Steam Machines, Steam Controller and the Steam link aren't really talked about or mentioned in gaming circles anymore.

I'm not necessarily buying that Meta is going to have the best hardware.

the rebranding was to skirt antitrust and regulatory scrutiny. They’re trying to convince regulators and the jury they are a AR/VR company, even though their entire business is (and will be) all funded by ads and data mining.

I still can't see how anyone would want to wear a headset for 8 hours a day to do their job like their promo videos show. Especially an office based job where their promotional videos show someone working with "large virtual screens" in an "ideal workspace setup". Surely most users would prefer actual screens and work without the headset on all day. Maybe the next hot thing is actually bigger and cheaper screens, not VR headsets.

I don't. I don't even own a VR headset. I tried the Quest Go or whatever it was called back in 2018. It was awful. I returned it immediately.

But I can see GenZ or the generation after GenZ embrace VR/AR. It doesn't have to be wearing a headset. It could be glasses when you're not wearing VR. It could be your phone when you're not wearing VR.

I still can't picture how anyone is supposed to get any actual work done when they've got that thing on.

I would only want a headset that could give me experiences I couldn't get anywhere else. Being trapped in a box and working sounds like prison.

A prison with sponsored skins for your virtual keyboard and mouse.

No one's proposing that, Meta was even showing off custom home environments for the Quest Pro https://mixed-news.com/en/meta-quest-pro-exclusive-home-envi... and you can use it for any other VR experience that you want.

Does anyone wants that ? A virtual luxury home in which you can't interact with anything ? Sounds like a nightmare

People pay a huge premium for a house or condo with a view. You can't easily go touch that view without travelling so I don't see a big difference there. Once consumer level devices catch up resolution wise with the insanely expensive business class headsets there will be almost no difference in the visual experience of looking through a headset vs looking through a window. With mixed reality you could even put that virtual window on your real wall.

If you're doing development for a VR application it's the way to go. Having to put the headset back on repeatedly to check out a change is annoying. I'd prefer all my meetings to be in VR as well since zoom is such a soulless and anti-social experience. My current work setup involves a 43" TV used as a main monitor so I can actually have enough room in the Unreal Editor to do shit plus 2 more monitors on the side for reference and other tools. I'm thinking of adding a couple more monitors since I still have to juggle windows sometimes. Being able to just have as many monitors as I needed at any one time positioned and sized perfectly would be a dream. Even when I'm doing non-VR development work I believe I'd benefit from this. The dealbreaker is how comfortable the headset is, I haven't tried the Quest Pro yet but it looks like they're moving in the right direction for comfort.

Have you ever tried virtual desktops? It was a huge benefit for me.

they should focus on the B2B use cases, the Metaverse is cringeworthy but the virtual desktop stuff I've seen actually makes me consider buying.

They just need to show the ROI vs buying multiple monitors, maybe put out some studies showing their VR meetings are more effective than Zoom, show the productivity boost of being able to use VR to tune out distractions in open offices. Get enterprise customers to buy fleets of VR for their employees and then launch some sort of SaaS marketplace for Meta devices and take a cut. Facebook now has their app platform they've wanted

Zuck's focus on social is what's ruining it, plus just the optics of him. He needs to disappear for awhile

Watch the Quest Pro launch, it's very obviously B2B and pretty much exactly what you're describing sales wise.

The virtual monitors stuff looks pretty in tiny Internet videos, but doesn't hold up on the actual headset. The resolution of both of the display and passthrough cameras is still abysmal, barely better than Quest2 and a tiny fraction of a real monitor. You can compensate a bit by making the virtual monitors much bigger than a real one, but even that only goes so far. At the end of the day, it's about the same experience as putting a big old 720p TV on your desk.

Resolution aside, going with virtual monitors also just shows how primitive the whole thing still is. From a 'workspace in VR' I would expect to get actual window management and UI elements in full 3D space, not just my 2D monitor projected to a virtual rectangle. Microsoft's WMR Portal had that five years ago (not without faults), Meta's attempt feels quite primitive and basic in comparison.

I agree with you.

This very much reminds me of Apple's Newton. It was actually quite amazing given the technical constraints imposed on making something to be shipped in volume, but not only was it underpowered for what it tried to be, the "killer app" for mobile devices would turn out to be wireless internet connectivity, and the world simply wasn't ready for that yet.

Apple started Newton development in 1987, killed it in 1997 when Jobs returned, and launched iPhone in 2007, arguably the biggest consumer product hit in history.

I'm rooting for Meta's demise, but history shows that it's quite possible for a company to try something, fail spectacularly, but come back and get it right when the universe catches up to the ambition.

Then again, Palm launched their first device in 1996, and had a big hit. But by the end of 2011, they were done. There are no guarantees that the company creating a market will be the one to profit from it.

Meta's problem is that mark just told wall st. to fuck off. Every investor is screaming to lower costs and he's raising them. It's not next years profit that investors are scared about, it's their lack of control over mark. This earnings report would mean Mark is fired even if he controlled 40% of the votes, it was that reckless.

>But really it's not next years profit that investors are scared about, it's their lack of control over mark.

Yeah, when things were booming no one cared about their class C shares that left control of these massive corporations in few hands. STONKS!

I sense that will change.

To me the issue is that Meta is pushing to attack three challenges at once.

On one hand there’s the hardware. Even now, people report motion sickness with the hardware. If you are trying to create a computing interaction medium of the future, these details around accessibility are going to be incredibly important. And I haven’t even mentioned battery life. So meta is working away at this very expensive challenge

The second challenge is the interaction model. No one is entirely convinced yet of what interaction with computers should look like in VR. Right now it’s “mouse/touch+windows but in VR. That’s like when TV and cameras first happened and it was theater shows but on the tv screen. So Meta now has to invent or at least shepherd computing integration models and that is also incredibly expensive.

And finally there is the metaverse. Technically we all live in the metaverse already. I interact with people I don’t know across forums and social media. I interact with them more than I do with some of the people I know in real life. I play games online which have meta worlds (Minecraft, temtem, and animal crossing for example). I may not have a single game of infinite worlds and meeting places but the concept of a universe within my existing world already exists and it’s served to me by the internet. But Meta wants to make it a ready player one kind of experience where I interact with it through a VR experience. That seems really forced because they are drawing a line in the ground saying that VR is how the metaverse can exist. This is also an expensive bet especially when the interaction model hasn’t been figured out yet.

I don’t know where this is heading for meta but their goal of creating the next big computing and interaction platform with app stores that they control instead of apple or google is incredibly ambitious but seemingly poorly executed thus far.

I don’t disagree with your overarching analysis, but:

> And finally there is the metaverse. Technically we all live in the metaverse already. I interact with people I don’t know across forums and social media.

Meta properties are already a huge share of this activity. Think FB, Instagram, WhatsApp, …

When you don’t have to wear an absurd headset

Facebook and Google got hit very hard in the recent quarter, but none of the articles point out one of the obvious reasons contributing to their drops: Apple made it significantly harder to track macOS and iOS users, which people tend to be high value targets for advertisements.

Not sure that hurts Google anywhere near as much as it does Facebook?

This was priced in last year when facebook said it would cost them $10 billion a year. Google has next to no presence in mobile apps/non-browser ads so I dont think they care much.

>Google has next to no presence in mobile/non-browser ads so I dont think they care much.

Uh... what?

Yeah that's crazy talk. Mobile search has represented over 50% of ad revenue for a while, hasn't it?

apple's changes made it harder to use a users profile from one app to target them on another app. All of google's ads are served on a browser so they weren't affected.

When you use a free app that shows you ads, whose ad network do you think is serving those ads?

facebook's...

According to stats like this one and many others, Google AdMob has a much larger presence in terms of serving ads on mobile apps: https://appfigures.com/top-sdks/ads/all

fair enough, thanks for the source.

Sure thing!

>This was priced in

Ah yes, those perfectly efficient markets, where everyone is doing DCF analysis.

Feels a little silly to be talking about things being "priced in" when a trillion-dollar-company loses a quarter of its market cap in 24 hours, no?

Mark going rogue was not priced in. That's why the stock dropped 21%, not because their revenue was down 4%.

Yeah, there's probably no other economic headwinds the low earnings could be due to. Must just be the thing you said.

Those changes happened 1.5 years ago, so it doesn't seem at all obvious why they'd have a larger impact now than in the previous 4 quarters.

> Apple made it significantly harder to track

I think that's a dangerous way to frame it. It's certainly the narrative Facebook wants out there.

Apple provided their users with more control over how their data is shared and those users overwhelmingly said no to Facebook and Google tracking them.

Apple made it particularly hard to track conversions. Also, what did they do on macOS to make it difficult?

I think you mean "Apple made it significantly harder for anyone but Apple to track macOS and iOS users". To their credit, it's a strategic masterpiece, as their hardware market growth slows they've built an impressive system to give than an edge in services and advertising.

Are you saying they have different rules for other advertisers than themselves in terms of what a user can control about what’s being tracked about them that can be used to drive ads?

Yes, this already exists. Pre-installed apps don't have to ask for the same permissions and defaults to sharing.

That happened almost 2 years ago - how long will they milk that excuse?

It's amazing what spending $15bn on a metaverse that everybody immediately laughs at will do to your stock price.

I started my Oculus Quest a couple days ago after a small hiatus, and it forced me to create a Meta account and set up a Horizon profile. Looks like Zuck is pushing really hard for his Metaverse thing. Ah, yes please, I would love to be in a VRChat universe flavored with all that Facebook goodness, I can't think of a better way to use my headset.

that's pretty much the only thing the quest is capable of running

Pretty much. Though you can play anything if you have a link, which is my case. There are other alternatives like the Index, but they are way more expensive.

Steam VR doesn’t count? I had to do some hackiness but now it works wirelessly for me, no link cable needed.

Forcing me to sign up with my IRL account was the no.1 reason I avoided the oculus.

I don't want fb tracking me roleplaying as a catgirl or doing some other degenerate activity with my 3D avatar and "accidentally" leaking data to advertisers or worse, family and friends.

With their track record, Facebook is the last company I'll trust with my data. No wonder they had no issue rebranding with such a lousy reputation.

its over for catgirls

I had a similar experience. I dusted off my Oculus Quest the other day thinking of revisiting some of the games I like there and seeing how well they had aged.

Immediately was prompted to create a Meta account and no longer had access to all the games I had purchased or installed years prior.

Tossed it right back in the bin it had been collecting dust in, which will likely change to the trash fairly soon.

Zuck has to push, otherwise he's out. He can't gracefully abandon the Metaverse after spending $12B and literally rebranding the company. Metaverse will either succeed, or Zuck will be sidelined.

Just remember the Mantra of Silicon Valley: "First they ignore you, then they laugh at you, then they fight you, then you win" -Gandhi

To be ignored or laughed at is, in a traditional SV company's mind, simply stage 1 or 2 of the plan, and if stage 4 never happens it's because they were "ahead of their time" or something, never can it be that the idea is fucking stupid.

Tangential, but not exactly from Ghandi https://www.snopes.com/fact-check/first-they-ignore-you/

*Gandhi

Ah, survivor bias.

The vast majority of things that are ignored, laughed at, or fought, go on to lose.

> "First they ignore you, then they laugh at you, then they fight you, then you win"

"They laughed at Columbus, they laughed at Fulton, they laughed at the Wright brothers. But they also laughed at Bozo the Clown." -- Carl Sagan

I don't understand the Apple Metaverse advertisements are even about... and I consider myself technical.

I've been reserving judgment on Meta's decision to go all in on virtual reality because maybe Zuck knows something we all don't. But his vision reminds me of Second Life circa 1999. I didn't care for it back then and I don't care for it now. Maybe there's something I am missing.

The idea of giving your boss Facebook level stalking into your working day isn't as appealing as Zuck hoped.

Not to say that Metaverse will necessarily fit the bill, but the question is whether your boss will be interested enough in getting Facebook level stalking power into their employees working day, me thinks.

Employees assess themselves as being the most productive working from home, management assess them as being the least productive. Management absolutely want in person office level control over their employees. Take a look at some of the things Microsoft Purview now tracks (and in some cases had to stop tracking due to backlash)

Completely agree with you. My point was that for the majority of workplaces, the choice of introducing or not such invasive tracking tech belongs to the employer. Employees sadly (at least to me) may not have much say in it if Meta puts together a convincing platform for employers.

Think sony had something similar to this in the ps3 era? Or I am remembering it wrong.

I read a quote saying managers at Facebook were struggling to get their own employees to want to have meetings on Metaverse. It’s not a good sign when the very product they’re pushing currently sucks where people don’t even want to use it.

This is one thing Microsoft had right in the Windows NT days, dog food the product. If the devs you're paying aren't willing to use it, there's no chance the paying customers will touch it.

I don't believe that Metaverse would be a success, but I still think $META could be a good value buy at this point. Investors are forgetting that $META still has an asset that it has not realized the potential of—WhatsApp. The app has 2B monthly active users and many of them are non-tech savvy who would loath at the idea of switching to another app. There are ~500M users in India alone[1]. Can you believe that? 40%+ of the country actively using an app?

The advertising potential is insane. But again, it's only speculation that the potential can be realized. I do think it doesn't hurt to have one risky bet in your portfolio.

[1]: https://www.indiatoday.in/technology/news/story/whatsapp-may...

ads on Whatsapp?? PLEASE NO!!

>The advertising potential is insane.

You realize the "just slap ads on it" monetization method is going away, right? Outside of regulation (ie GDPR) and platform control (ATT), it's 2022; do people really still believe that flooding a product people love with ads won't change user behaviour?

It may work for a year or two. That's still a year or two more of insane revenue than nothing.

Meta might be a good value buy at these prices if they launched a dividend. But their free cash flow dropped close to zero in this last quarter, so that won't be happening.

meta bought back 2% of their shares last quarter alone. They are one of the most aggressive tech companies when it comes to returning capital to shareholders.

> The advertising potential is insane.

I doubt it.

When you chat you are focused on the interaction. Ads are a major disturbance in the flow.

When you browse facebook you are actively looking for stuff to read - ads fit in much better.

Mark claimed on the earnings call that their "pay to message a potential customer" ads on messenger are already bringing in a billion in revenue. They haven't even fully launched on whats app. While this incredibly annoying feature push people toward other messaging apps? Yes, but plenty of people will just deal with it.

I think this is the right answer. Whatever disappointment may or may not exist with some of their other bets, their stranglehold on our attention continues to exist. I mean, you have really, really strong competitors like TikTok out there, and FB property usage GREW. In the developing world, Whatsapp quite literally has a stranglehold on communication -- full stop. Whatsapp for Business in a lot of countries is in its infancy... payment processing/etc. is surely a "willingness to do it" question rather than one of whether they can or not. It just sounds to me all in all like Zuck is trying to be ready to play a really long game. What all of this reminds me MORE of is the constant ridicule you'd hear out of Microsoft around mobile computing and the internet, only to realize it a bit way too late in the process that they had missed a trick. I think Zuck feels he has enough money to spend to not miss the next trick.

It could be if they didn't reinvest everything into the metaverse. Any dollar put into that essentially didn't exist as profit, in most investors minds

Yes! And the monetization in this case isn’t display ads but rather charging businesses for communicating with their customers.

But there are no ads in WhatsApp and if there were, we’d likely see people switch to one of an infinity of similar free apps.

Yea they still have other products of course, but shoving ads into Whatsapp wouldnt go down too well, seeing as all other messenger apps dont have any ads at all.

They should have spent the $12b on researching how to monetize their existing platforms properly instead of on this metaverse nonsense.

You don’t need ads to monetize a product. Plenty of people will buy things through WhatsApp.

LINE has non-intrusive ads in their app, among hundreds of other things, everyone in Japan uses it.

As someone working for one of their could be competitors in the VR domain, we are doing extremely well with a long list of customers, the end users don't see it, but VR is heavily used in medical training, military training, virtual classrooms etc. We have a good number of customers using it to show house/building plans too. Enterprise users seem to be more interested as the devices have almost become affordable and portable. Sub 400$ devices would be needed to break into mass consumer market.

The Metaverse may very well be the future, but Meta has just gone far too aggressively in pursuit, far too early.

There were tons of web startups with potentially viable business models in the 90s too, but they weren't actually possible to run profitably until much later. When the web was faster, when storage was cheaper, when logistics could be outsourced etc

There's a clear hardware limitation in regards to pixel density, compute etc, that is going to leave VR as a niche for a long time. Semi-manufacturing process/compute performance is not a limitation that is going to be overcome anytime soon, regardless of how much Meta spends.

No investor wants to wait for 200B and 20yrs to possibly achieve something in the metaverse.

What is crazy is that you will spend so much more compute resources just to do the same exact stuff you were doing in 1995. Some developer on here once commented that they used their vr headset to run an editor. I wonder how much more power it takes to render vim in VR…

I think it’s a natural trend.

We move to higher and higher level abstractions over time, which makes development easier but has a performance cost. The trade off is worth it for the most part.

Of course if CPUs stop improving exponentially, the tradeoff calculus changes.

Also the need to care about battery life has somewhat shifted thinking back towards efficiency

How can it be worth it? Does 2020 microsoft word do anything different than the one we used in 1995? Not really. Just now you need hardware thats 100x more powerful to output a .doc file. Thats waste, not a gain.

It's called "The Innovator's Dilemma" and not "The Innovator's Win-Win Situation" for a reason. You don't know what the future holds, so while you're making the decision both options look bad. Continue chugging on their FaceInstaApp stuff and they'll eventually stagnate and get taken over by SuperIMessage. Go all-in on a risky new path and there's no guarantee that it'll work.

Anyway, I get it. People hate Zuckerberg, they hate facebook, they wanna see the whole thing burn down. But then what, will that magically get rid of social media? Or will TikTok just take over?

I think a lot of people here would be happy with TikTok taking over just like the same people here were happy with FB back in the day. Give it a few years and the roiling cesspool below the surface of dancing and singing will burst forth and the same crowd will be calling for TikTok's demise and will be on to the next thing (also bad).

I was initially a skeptic of widespread adoption of VR. I'm not sure that it's going to be the next smartphone. However, if it gets more comfortable and the price point goes down, I could see it being a replacement for traditional desktop monitors. Instead of paying $1k for a 27-inch display you get as many large screens as you want. That seems probable to me.

I know that sounds awfully boring and mundane, but that probably comes way before other applications. After all the original iPhone was just an iPod you could make calls with.

>If it gets more comfortable and the price point goes down I could see it being a replacement for traditional desktop monitors

This is - quite literally - decades away in terms of panel production and graphics tech. Just like you should not found (or pivot to!) American Airlines in 1919, you should not bet the house on virtual reality in 2022.

envelope calculations

- You need two low heat/low power OLED 8k monitors (or more? Currrent state of the art is 1600x1440 per eye - and it's nowhere near enough to read text) And the current headsets are heavy, with thick fresnel lenses and produce enough heat to make them unusable with an ambient temp above ~23C - You need a mobile graphics chip better than a 4090 - wayyy better. A 4090 can render a 4k virtual world (more than 4x easier than what I suggested above!) but it requires 450W to do so. So you need >4x the performance with less than a 20th to 50th the power budget). - And finally, at a price point of $1k. Actually this is probably the easiest part, once any of the above exists, should only take a few more years of scale and sale.

This is if you want to replace the performance of a 100ish DPI 27" monitor. I believe a 2560x1440 is about ~110 DPI, which is very usable and pleasant, but much worse than the 220DPI of a Mac "retina" device (hence why I'm considering 8k per eye, honestly)

Either way, the technology to make small enough OLED panel is close, but not there. Samsung could do it, given how large they've made their AMOLED phones, but it's still a big jump.

The graphics technology to drive that is sooo far away it's not even a twinkle in ASML's eye. Here's your limiting factor.

And then you have to package them together cheaply.

I tried to work on a Quest 2 with ImmersedVR for a few hours. It wasn't perfect, but also not nearly as hopeless as you make it out to be.

I've played a lot of VR games, and used the VR desktop mode.

It's not matching a 1440p 27" monitor for clarity or ease of use for at least a decade.

It could do something quite different and do that really well - but it can't replace 1to N work monitors anytime in the 2020s.

For what class of people?

A 35 inch curved widescreen can be had for 300ish.

When I work, I need to see my surroundings. See the kid, see out the window for weather, visitors, deliveries. Make sure the dog isn't into anything. Say hi to the family when they're in/out. There's no way in hell I'm strapping on a digital blindfold.

Also, how do video calls even work? We all look like borgs? Don't tell me we're all gonna have floating cartoon avatars...

My point was it would likely look more like existing software today than the cartoonish, futuristic vision of Facebook's metaverse. My guess is a bunch of flat panels much like our computer screens with a web browser, or VS Code or Excel.

The other comment here makes good points about the tech needed to power such devices though. Unless there's some sort of breakthrough maybe VR will remain for gaming and other niche applications.

So something like Lenovo Glasses T1: https://news.lenovo.com/pressroom/press-releases/glasses-t1-...

It is no surprise, the problem is betting on when this would happen. The Metaverse is far outside their competency. And renaming their company to Meta makes acquiring another company with a Metaverse product impossible, without being a laughing stock, unlike with the Instagram purchase.

The thing it reminds me of most is when Michael Jordan tried to play baseball.

Fortnite is better metaverse as far as metaverse go

Mention of the current decline of tech stocks without mentioning Fed policies since 2000 is missing a foundational component in what’s happening. Meta has a viable business but they have also been the beneficiary of a tremendous amount of mal-investment, that party is ending.

They made their own bed through their election interference and the obvious bias of their “truth police“ and are now feeling the bite. I deleted my account but recently recreated it because in my area they are the best source of information and alerts during local emergencies and events. But yeah my posts are occasional sharing of meaningless content.This may be more or less of the affect than the bite apple took out of them but cumulatively they are feeling the affects.

As much as I don't like Facebook I'm glad there is a large corp with a lot of money investing in VR. They're the only one really trying something.

Yeah I definitely do not want a VR winter. Meta uncoupling Facebook from the VR devices was a good move. IMO Oculus should have stayed Oculus under Meta's umbrella and have done its thing. When it went blatantly under Meta and proudly displayed its branding, it pushed VR / AR skeptics further away. Oculus had a fantastic origin story / brand and they stupidly killed it just like that.

With the tech's current iteration though, it is not there for social / business. They are far too uncomfortable for such use. Make it almost as inconvenient as my glasses and people won't be able to live without it, a transformation just like smartphones did in our lives. I need to be able to comfortably put it on and get going. People will be using AR everyday through always on spectacles one day.

VR for gaming and experiences is AMAZING. But very expensive. When I went from standalone Quest 2 experiences to PCVR experiences, the gap was HUGE. I can't go back to mobile graphics / experiences.

Anyways, I doubt people putting on bulky VR glasses (even the new Quest Pro is way too bulky and uncomfortable, not even close) to work / be social will not be a reality anytime soon. VR gaming is still kind of niche and is not a big enough market to justify that amount of R&D costs. So something has to give. Would be very bummed about a VR winter.

Zuck clearly believes in his vision, but Meta is not the vessel to do it. It would be best if spins out the VR R&D operation, and devoted his energies full-time to this in a completely separate organization.

If not, I predict he will grudgingly agree to a "pullback" on VR ... or will be forced to step back as Meta CEO.

Tactile feedback.

That's the only problem VR should be looking into. If you want to go from novelty to useful, you need genuine full body tactile feedback.

It needs to feel like I performed the action I'm pantomiming. Other devices have both an input buffer and a visual buffer. Be it a controller, keyboard, mouse, etc. So I don't need to feel the weight of an item I'm holding, I just need to feel the response of the button I pressed to do so. Plus, what I'm doing is happening to an avatar on the screen. So I'm disconnected.

However, in VR, there are fewer buffers. I'm now the avatar. So when I pick up an item, I expect to feel that weight. If I make a throwing motion, I expect it to feel different if I'm throwing a baseball as opposed to a basketball.

But in VR, it all feels the same. Beat Saber works because the game works within the confines of VR's limitations.

On the contrary, I think focusing so much on emulating the real world is one of the core problem with modern VR, as the more you emulate reality, the more you are locked into the constraints that reality provides. Simple acts like picking up an object from the ground become a chore when you have to do them realistically. Just pointing with a laser pointer and having the ability to interact with distant objects gives a much better experience.

What VR is still missing is a well defined set of gestures, tools and UI elements to perform actions in the virtual space that go beyond what your body can do. There are only a few common ones, like snap-turn, teleport-locomotion or the laser-pointer, but even those have to be reinvent each time, which leads to a lot of inconsistency.

That's not to say that haptics wouldn't be nice to have, but that technology is very far from being practical for mass market VR.

Reasons why Meta has no future:

1. Multiple share classes. Meta (or Alphabet) would be blocked from joining SP500 with current rules.

2. Horrible corporate governance. Leadership without accountability. Mr. Zuck can't be ousted. Meta is his personal toy.

3. Meta business is peaking. Growth by acquisitions is blocked by new regulatory environment.

Hm. I've been a facebook user since the beginning. My silver lining here is that the company has a history of making very unpopular decisions that end up being very profitable. Deservedly or not, people love to hate facebook, even people who use its products regularly.

The problem for Meta is that there are use cases for VR - but they are niche (so far):

1. Practicing dangerous or expensive operations: I think Microsoft Flight Simulator is a good example of this but I'm sure there are industry applications that are similar. VR allows you to practice these without crashing the literal plane.

2. Replacing things that are currently impossible in the real world: I think Zwift is a good example of this. It allows you to ride your bike in a fun environment when there are snow drifts outside.

The problem for Meta is that none of these scenarios are in their wheelhouse or of high enough scale for them to be a business for them.

The problem with both of those is that they create movement in the virtual world that doesn't match movement in the real world which is the prime recipe for motion sickness.

Dramamine almost cures it, but also puts you to sleep. I've heard eating ginger and having a fan blowing on your face helps, but I haven't tried it yet.

VR isn't going to be a commercially successful product for Enterprise customers. I don't see how a company with 10k employees is going to think purchasing specialized hardware, software and training for a collaboration tool is going to help their business outcomes.

There is a point of "good enough" for collaboration/meeting tools and features above and beyond aren't going to materially make the outcome of the collaboration/meeting any better to offset the costs.

Lowest point since 2016, not adjusting for inflation. Damn.

META stock chart adjusted for inflation: https://totalrealreturns.com/s/META

(Will include today's change only after end-of-day data is released, probably around 8pm ET / 5pm PT.)

Regardless, will likely still land in the 2015-2016 time range.

It’s about damn time.

The global advertising revenue is projected to grow for the next 5 years [1]:

There is too much extrapolation in this thread from the results of 1 company in 1 quarter.

[1] https://www.statista.com/statistics/236943/global-advertisin...

Facebook’s toxic reputation is catching up with it and the user base is shrinking, specially in the Western world where most of the valuable (to advertisers) customers are. Also TikTok is eating their lunch with younger generations. A company slowly sliding towards MySpace-like irrelevance, with an authoritarian CEO who has a majority of voting rights, is not an attractive investment.

VR is a hail-Mary pass, and pretty much the only thing that can save the company.

$102 dollars to go.

Sorry if you work at this place and can mentally handle making the world a worse place but it needs to die.

It's been "known" Meta would report really bad results for a few days now.

Also, Zuck doublespeak about that a few weeks ago with the whole thing about the need to be "more focused" or some kind of "the party is over" type of memo to his employees.

The stock dropping 23% tells you that it's (much) worse than expected. That bad news were anticipated (and priced in) makes it even worse.

I think a so drammatic price sink came from Zuc post on Facebook prospecting even much more capex expenses for 2023. So for sure still another year of bad earnings

If it was in any sense "known," the stock wouldn't have moved 25% in a day.

It was public it would be bad, but it was not public it would be this bad. However it was "known" aka a group of people "had the same dream" before today that it would be REALLY bad.

If I was an executive at Meta, I'd be pushing to partner with Roblox and work on developing cheap Google Cardboard style headsets that work with phones. Roblox VR with a $10 headset would be a killer app at the grassroots level.

I am still long Meta, as I am long VR and the metaverse. While there's no guarantee that Meta will win this race, they are making the investments needed to try.

They blocked many shorting attempts today. It is nice that the stock market tries to correct price drops and makes it hard to profit from sales.

Once everyone who wanted a CB radio got a CB radio, the radios stopped selling.

Out of curiosity, why was the title altered from the 23% I submitted to 20%?

Does anyone else see a future of Meta without Zuck running it?

I only feel bad that I haven't been short Meta.

It’s never too late to start!

Tested a short bet yesterday. Was not disappoint.

This will probably continue to happen. Google/FB etc. used content that was created by others to monetize them but kept the profits away from the content creators. This resulted in a lot of original content going away (See the death spiral of the local newspapers) and getting replaced by clickbait, algorithmic content, misinformation etc. I don't think there is room for the same amount of growth going forward and this is simply the market adjusting their P/E multiple to account for the lower growth rate (FB is being hit harder because of the Meta overspending debacle).

One can only hope there will be a great awakening of some kind and it will go to 0.

Don’t let the door hit ya on the way out, mark

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