Meta CTO Andrew Bosworth provided the first insight into the company’s recent Reality Labs shakeup, publicly acknowledging that Metaverse’s efforts suffered from a “lack of focus” that ultimately negatively impacted the user experience on Quest.
Bosworth spoke last week at Axios House in Davos, Switzerland with the World Economic Forum, discussing some of the issues that led Meta to refocus its Metaverse and VR strategy. This included layoffs affecting 10 percent of the Reality Labs XR team.
Meta has refocused its approach, narrowing down and realigning its VR and Metaverse efforts while doubling down on AI and smart glasses. Bosworth, who is also head of Reality Labs, attributes this pivot to three problems: poor communication about the Metaverse vision, high development costs, and over-integration of Horizon Worlds with Meta’s VR strategy.
Horizon World Preview (2022) | Image Courtesy: Based on Mark Zuckerberg
Horizon Worlds wasn’t the company’s first social VR platform, but when it first launched in 2021, it was the first truly collaborative effort to provide a “default” shared VR space for Quest users. Bosworth said Meta’s ambition for Metaverse was to build a “rich version” of the mental “travel” that people already experience when interacting via smartphones.
“We’re still going to do it,” Bosworth told Axios’ Ina Freed, referring to Horizon Worlds. “But it’s like any other investment. You look at your performance over the years and reinvest in some areas and cut your losses in others. For us, we’re seeing tremendous growth in the metaverse on mobile.”
Image provided by: Meta
With its release on Android and iOS mobile devices in 2023, Horizon Worlds moved beyond quests for the first time, but ultimately led to higher costs and a more difficult development process.
“Having to build everything twice (once for mobile and once for VR) is a huge burden on the team. It’s better to build a huge audience and then work from a favorable position.”
The second issue was the meta decision to tie Horizon Worlds tightly to the Quest platform. Bosworth admits this wasn’t for everyone.
“When you put on the headset, you immediately enter into this accessible space of simultaneous existence. This is a very difficult task in terms of the fact that there are a lot of people who put on this headset for different reasons. We want to support all these different use cases,[but]the lack of focus sacrifices the user experience and results in a lot of expense in terms of development costs.”
Bosworth said the company currently has “two more focused bets,” but they essentially come down to third-party VR content and support for Horizon Worlds on mobile.
“Of course, to do this, there are tragic and human costs every time plans change. We identified a number of roles that were no longer needed,” Bosworth said of the layoffs. “So we ended up specifically winding down our efforts in the Metaverse. We’re online, but Reality Labs is not shrinking. We’re basically taking over all of those (positions) and investing in wearables. Wearables are growing very quickly for us.”
This follows the closure of three first-party VR studios and represents a concerted exit from developing and financing content for the Quest platform.
Notably, Reality Labs’ operating costs have consistently exceeded $4 billion every quarter since late 2021. Although the fourth quarter is the strongest in terms of revenue for the XR division, Reality Labs typically only generates ~$1 billion, with a significant drop in revenue from Q1 to Q3. We should be able to learn more about Q4 2025 when the company reports after market close on Wednesday, January 28th.
The full interview can be viewed below. Thanks to Reddit user “gogodboss” for bringing us this news.
