metaverse Archives | Digital Watch Observatory

Horizon Worlds remains active as Meta reconsiders VR plans

Meta has reversed its earlier decision to discontinue virtual reality support for Horizon Worlds, allowing the platform to remain available on VR headsets despite previous plans to prioritise mobile and web access.

The decision follows an internal reassessment of user engagement trends, which indicate limited adoption of VR-based social platforms.

While Horizon Worlds was once positioned as central to the company’s metaverse ambitions, demand has remained relatively low, raising questions about the long-term viability of immersive social environments.

Financial pressures also continue to shape strategy.

Meta’s Reality Labs division has recorded substantial losses since 2021, reflecting high investment in virtual and augmented reality technologies without corresponding commercial returns.

Industry data further suggests declining headset sales, reinforcing uncertainty around VR as a mainstream consumer platform.

In contrast, mobile usage of Horizon Worlds is growing faster. Increasing downloads point to broader accessibility and improved product-market alignment, though revenue generation remains limited.

As a result, Meta is prioritising mobile development instead of fully abandoning VR, maintaining a dual approach while seeking more sustainable engagement models.

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Meta’s metaverse collapses as Horizon Worlds shuts down on Quest

Meta will shut down Horizon Worlds on its Quest headsets, ending its flagship virtual reality (VR) platform and marking a clear retreat from its metaverse ambitions. The app will be removed from the Quest store on 31 March and discontinued in VR by 15 June, continuing only as a mobile service.

Horizon Worlds, launched in 2021, was central to Meta’s rebranding from Facebook and its vision of a fully immersive virtual environment. Despite billions in investment and high-profile partnerships, the platform failed to attract a large user base and struggled with design limitations and weak engagement.

Reality Labs, the division behind the metaverse push, has accumulated nearly $80 billion in losses since 2020, including more than $6 billion in a single quarter. Recent layoffs affecting around 10 percent of the VR workforce, along with the shutdown of related projects, underscore a broader pullback.

Competition and shifting priorities have accelerated the decline. Rival platforms such as VRChat maintained stronger communities, while Meta increasingly redirected resources toward AI and hardware, including its Ray-Ban smart glasses.

Although Meta says it remains committed to VR, the closure of Horizon Worlds signals a strategic reset. The company is repositioning its future around AI-driven products, marking a decisive shift away from its earlier metaverse vision.

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Meta moves investment from metaverse to AI smart glasses

Meta is redirecting part of its metaverse spending towards AI-powered glasses and wearables, aiming to capitalise on the growing interest in these devices. The shift comes after years of substantial investment in virtual reality, which has yet to convince investors of its long-term potential fully.

Reports indicate that Meta plans to reduce its metaverse budget by up to 30 percent, a move that lifted its share price by more than 3.4 percent. The company stated it has no broader changes planned, while offering no clarification on whether the adjustment will lead to job cuts.

The latest AI glasses, launched in September, received strong early feedback for features such as an in-lens display that can describe scenes and translate text. Their debut has intensified competition, with several industry players, including firms in China, racing to develop smart glasses and wearable technology.

Meta continues to face scepticism surrounding the metaverse, despite investing heavily in VR headsets and its Horizon Worlds platform. Interest in AI has surged, prompting the company to place a greater focus on large AI models, including those integrated into WhatsApp, and on producing more advanced smart devices.

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Meta pushes deeper into robotics with key hardware move

Meta is expanding its robotics ambitions by appointing Li-Chen Miller, previously head of its smart glasses portfolio, as the first product manager for Reality Labs’ robotics division. Her transfer marks a significant shift in Meta’s hardware priorities following the launch of its latest augmented reality devices.

The company is reportedly developing a humanoid assistant known internally as Metabot within the same organisation that oversees its AR and VR platforms. Former Cruise executive Marc Whitten leads the robotics group, supported by veteran engineer Ning Li and renowned MIT roboticist Sangbae Kim.

Miller’s move emphasises Meta’s aim to merge its AI expertise with physical robotics. The new team collaborates with the firm’s Superintelligence Lab, which is building a ‘world model’ capable of powering dextrous motion and real-time reasoning.

Analysts see the strategy as Meta’s attempt to future-proof its ecosystem and diversify Reality Labs, which continues to post heavy losses. The company’s growing investment in humanoid design could bring home-use robots closer to reality, blending social AI with the firm’s long-term vision for the metaverse.

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Meta introduces tools to enhance the Metaverse

Meta has announced the release of a new AI model, Meta Motivo, designed to enhance the realism of human-like digital agents in the Metaverse. This innovation promises more lifelike movements for avatars, addressing longstanding issues with digital body control. The company believes these advancements will revolutionise character animation and create immersive experiences with highly interactive non-playable characters (NPCs).

Meta’s focus on AI and Metaverse technologies has led to record-breaking investment forecasts for 2024, with capital expenditures projected to reach up to $40 billion. The company has also embraced an open-source approach by making its AI models available for free to developers, fostering innovation across its platforms.

In addition to Meta Motivo, the company introduced the Large Concept Model (LCM), an AI system designed to reimagine language modelling by focusing on high-level concepts rather than predicting text tokens. This system processes entire sentences in multilingual and multimodal contexts, aiming to enhance reasoning capabilities. Meta also unveiled Video Seal, a tool that embeds invisible, traceable watermarks into videos, signalling its commitment to both innovation and security in digital content creation.

These releases reflect Meta’s vision of advancing AI to shape the future of digital interaction and the Metaverse, aiming to establish itself as a leader in cutting-edge virtual and augmented reality technologies.

EU and UK universities begin metaverse classes

Universities across the EU and UK are set to introduce metaverse-based courses, where students can attend classes in digital replicas of their campuses. Meta, the company behind Facebook and Instagram, announced the launch of Europe’s first ‘metaversities,’ immersive digital twins of real university campuses. With the help of Meta’s VR partner VictoryXR, students can explore campus grounds, work on projects, and participate in simulations from their VR headsets or PCs, offering a more interactive experience than traditional video calls.

Several institutions are embracing the metaverse: the UK’s University of Leeds started metaverse courses in theater this fall, while Spain’s University of the Basque Country will introduce virtual physiotherapy and anatomy classes by February 2025. In Germany, schools in Hannover will launch immersive classes by the start of the 2025 school year. VictoryXR, which has collaborated with over 130 campuses worldwide, sees these “digital twin” campuses as ideal for field trips, group experiments, and real-time assignments.

Meta has provided VR headsets to educators at numerous universities in the US and UK, including Imperial College London, to encourage innovative teaching in fields such as science and language arts. According to Meta, these metaversities mark a ‘significant leap forward’ in education, creating interactive and engaging learning environments.

Meta’s new strategy: AI-powered gaming experiences

Meta is set to integrate more generative AI technology into its virtual, augmented, and mixed-reality games, aiming to boost its struggling metaverse strategy. According to a recent job listing, the company plans to create new gaming experiences that change with each playthrough and follow unpredictable paths. The initiative will initially focus on Horizon, Meta’s suite of metaverse games and applications, but could extend to other platforms like smartphones and PCs.

These developments are part of Meta’s broader effort to enhance its metaverse offerings and address the financial challenges faced by Reality Labs, the division responsible for its metaverse projects. Despite selling millions of Quest headsets, Meta has struggled to attract users to its Horizon platform and mitigate substantial operating losses. Recently, the company began allowing third-party manufacturers to license Quest software features and increased investment in metaverse gaming, spurred by CEO Mark Zuckerberg’s growing interest in the field.

Meta’s interest in generative AI is not new. In 2022, Zuckerberg demonstrated a prototype called Builder Bot, which allows users to create virtual worlds with simple prompts. Additionally, Meta’s CTO, Andrew Bosworth, has highlighted the potential of generative AI tools to democratise content creation within the metaverse, likening their impact to that of Instagram on personal content creation.

Generative AI is already making waves in game development, with companies like Disney-backed Inworld using the technology to enhance game dialogues and narratives. While some game creators are concerned about the impact on their jobs, Meta is committed to significant investments in generative AI, even though CEO Zuckerberg cautioned that it might take years for these investments to become profitable.

Workplace app discontinued as Meta invests in AI and metaverse

Meta Platforms, the parent company of Facebook, announced that it will discontinue its Workplace app, a platform geared towards work-related communications. The social media platform made this decision as it shifted its focus towards developing AI and metaverse technologies. The Workplace app will be phased out for customers starting in June 2026, although Meta will continue to utilise it internally as a messaging board until August 2025, according to a statement from the company.

A spokesperson for Meta stated that they are discontinuing Workplace to focus on building AI and metaverse technologies that they believe will fundamentally reshape the way they work. Over the next two years, Workplace customers will have the option to transition to Zoom’s Workvivo product, which Meta has designated as its preferred migration partner. Workplace was initially launched in 2016 to cater to businesses, offering features such as multi-company groups and shared spaces to facilitate collaboration among employees from different organizations.

Why does it matter?

The discontinuation of Workplace aligns with Meta’s strategic emphasis on advancing AI and metaverse technologies, which it views as integral to the future of digital communication. The strategic change of business direction has raised concerns about escalating costs that could potentially impact the company’s growth trajectory. Despite the discontinuation of Workplace, Meta has assured customers that billing and payment arrangements will remain unchanged until August of this year. Currently, Workplace offers a core plan priced at $4 per user per month, with additional add-ons available starting from $2 per user per month, with monthly bills calculated based on the number of billable users unless a fixed plan is in place.

China aims to establish advanced metaverse industrial cluster

China has unveiled a national plan to develop its own metaverse by 2025, with the goal of creating three to five globally influential metaverse companies. This plan was published by five Chinese ministries led by the Ministry of Industry and Information Technology in a policy document.

The policy blueprint covering the time period of 2023 to 2025 highlights the application of metav e rse technology in various industries, such as home appliances, automotive, and aerospace.

The development of artificial intelligence, blockchain, and virtual reality technologies will be key to achieving the metaverse vision and the Chinese government aims to establish three to five industrial clusters around these emerging technologies. The document also suggests that manufacturing industries, including steel and textiles, can adopt related technologies to optimize scheduling, material calculation, and other parts of the production process.

Previously, some local authorities in China like Henan and Shanghai province have also issued their own policies to promote metaverse development, emphasizing on how it can support the economy and traditional industries.

The EU Commission presents EU strategy to lead on Web 4.0 and virtual worlds

The European Commission has adopted a new strategy for Web 4.0 and virtual worlds. The EU strategy aims to steer the next technological transition and ensure an open, secure, trustworthy, fair, and inclusive digital environment for EU citizens, businesses, and public administrations.

The strategy aims to empower people and reinforce skills, support a European Web 4.0 industrial ecosystem, promote virtual public services, and shape global standards for open and interoperable virtual worlds. The Commission believes a Web 4.0 will be a next generation of the Internet infrastructure that will allow an integration between digital and real objects and environments, and enhanced interactions between humans and machines.

The strategy is based on consultations with citizens, academia, and businesses and builds on the work of the European Commission on virtual worlds.