Facebook now has more than 10,000 staff working on various projects in the space, including the development of AR glasses to overlay objects and information on to the real world, and a wristband that will allow wearers to interact with that world through subtle finger movements.
Zuckerberg has indicated that he believes AR systems will be ubiquitous within the next decade — Facebook's first version of its smart glasses are expected later this year — but the company faces stiff competition, in particular from smartphone maker Apple, which is also rumoured to be launching a headset next year at the earliest.
Quite what a Facebook metaverse might look like is unclear. Its app for social networking in virtual reality, Horizon, has been in development for two years but is not yet opened up to external users. However, on the analyst call, Zuckerberg described a space where people could hang out, send work messages, play games and even go dancing together.
He also made clear he was intent on monetising the opportunity of virtual worlds. Advertising would "probably be a meaningful part of the metaverse", as would commerce, he said, describing a space where people would buy digital clothes and goods to bring with their avatars as they "teleport from one experience to another".
The push comes as Facebook has recently clashed with Apple, after the iPhone maker introduced changes to its operating system that curb Facebook's ability to collect data for targeting advertising at users.
In an interview this week with tech journalist Casey Newton, Zuckerberg hinted at this rivalry as a driver of his metaverse strategy. "One of the reasons why we're investing so much in augmented and virtual reality is mobile phones kind of came around at the same time as Facebook, so we didn't really get to play a big role in shaping the development of those platforms," he said.
A Facebook metaverse would also set up a battle with the companies behind some of world's most popular video games, such as Fortnite, Minecraft and Roblox, which have emerged as early frontrunners in building immersive virtual worlds.
Tim Sweeney, founder and chief executive of Epic Games, the company behind Fortnite, has described the metaverse as "a phenomenon that transcends gaming". Epic has been steadily adding social-networking features to Fortnite and acquiring smaller start-ups such as 3D modelling company Sketchfab to build out its gaming technology Unreal Engine, which can provide the graphical underpinnings for other virtual worlds.
"Our aim of Fortnite is to build something like a metaverse from science fiction," he said during Epic's courtroom battle with Apple earlier this year.
The competition is not limited to gaming groups. Microsoft announced this week on its earnings call that it was developing an "enterprise metaverse".
"There is lots of noise around the space," said Luke Alvarez, a London-based tech investor. "It's a bit like the auto industry was in 1905, with hundreds or thousands of companies coming at it with all sorts of solutions."
It is unclear whether one dominant metaverse will emerge or whether multiple companies' metaverses will exist in competition. Zuckerberg told analysts that he expected users would be able to access Facebook's metaverse from different devices or apps.
Facebook, with its close to 3bn users, may have the scale to fight for a winner-takes-all position, but Alvarez argued that while the social media group can be a key player, "there is definitely not going to be just one metaverse".
There are also formidable technical challenges to bringing the concept to life, from creating digital currencies that work across different games to a graphics rendering system that can animate thousands of avatars sharing the same virtual city or concert venue.
Herman Narula, chief executive of Improbable, a London-based start-up that he describes as building the "plumbing of the metaverse", said that computing platforms would have to support billions of operations per second to "produce some of the experiences that people are talking about".
Today, games such as Fortnite that can host up to 100 players at a time are processing only thousands of operations per second.
"The feeling you get in a stadium when thousands of other fans around you roar is very different to going on a message board," he said. "The utility [of the metaverse] is proportional to how many things can happen together at any moment in time."
Questions also remain over whether non-gaming consumers are ready to embrace this somewhat dystopian sci-fi vision. While Facebook has begun to see sales of its Oculus virtual reality headset improve, it lacks a game that might convince people they want to swap Instagram for a new kind of digital hang-out.
Whether Facebook's metaverse, in particular, can gain traction will also hinge in part on whether it can address persistent concerns over its ability to moderate for harassment and abuse, and over privacy in the wake of numerous scandals.
It will also depend on whether the company can deliver advertising in a non-intrusive manner. Last month, Facebook's first partner for advertising in its Oculus headset, shooting game Blaston, pulled out of the initiative after less than a week following a backlash from the gaming community.
Despite the challenges, Zuckerberg remains unfazed. "This is going to lead to entirely new experiences and economic opportunities," he said.
- Financial Times
