Anatomy of the Meta Metaverse Collapse: Why the Project Failed

Edgar Grigoryan: Anatomy of a Crash: Why Meta’s Metaverse Didn’t Become Reality

Anatomy of a Crash: Why Meta’s Metaverse Didn’t Become Reality

Introduction: What did the roadmap promise?

In 2021, Mark Zuckerberg presented to the world not just a new company name, but a detailed roadmap of the future.

According to his vision, by 2026 (right around today), the metaverse was supposed to become a fully-fledged digital habitat for humanity.

Key milestones announced in 2021-2022:

What went wrong? Why did we get closed services and memes about “legless avatars” instead of billions of users?

The analysis shows that the failure occurred across four key areas.

Reason 1. Managerial Blindness: “We don’t use our own product”

The most shocking detail of this story is the admission by Meta’s top management that the development team did not use their own creation [2].

In September 2024, Meta’s VP of Metaverse, Vishal Shah, sent an internal letter that became public.

In it, he stated a catastrophic fact: Horizon Worlds developers do not spend time there [2].

“If we don’t love what we’ve built, how can we expect users to love it?” Shah asked, and introduced coercive measures: managers had to ensure their teams spent at least an hour a week in Horizon [2].

Imagine: a team building a “new reality” is forced to enter it by management order.

This is symptomatic.

It means the product was so raw, uninteresting, and inconvenient that even its creators preferred to spend their time anywhere but there.

Why did this happen?

Meta fell into a classic corporate trap: top management approved the strategy “from above,” and people on the ground simply completed tasks without questioning the product’s ultimate value.

As Meta’s CTO Andrew Bosworth later admitted, the metaverse suffered from a “lack of focus,” which happened “at the expense of user experience” [3].

Teams tried to boil the ocean instead of perfecting a single scenario.

Reason 2. Wrong Vector: Technologism instead of Human-Centeredness

Zuckerberg is an engineer to the bone.

And his approach to the metaverse was typically engineering-based: “we will build it — they will come.”

This vector proved fatally wrong.

Mistake 2.1: Technology for technology’s sake

The main PR disaster happened when Zuckerberg posted a selfie of his avatar in front of the digital Eiffel Tower.

The internet exploded with laughter: the graphics were at the level of PlayStation 2.

For the average person, this became a symbol that the “great future” looked shabby.

But the problem was deeper than graphics.

The very idea of moving all social life into a VR headset proved unviable.

Cambridge Professor Per Ola Kristensson conducted an experiment: his team tried to work in VR for 40 hours a week.

The result: “You can do it, but you will hate it” [4].

Motion sickness, eye fatigue, the inability to drink coffee without taking off the headset — these “little things” kill any immersive experience.

Mistake 2.2: Wrong vector inside the universe

The main strategic miscalculation: Meta decided that the metaverse is VR.

But users voted with their wallets for something else.

When Horizon Worlds was finally released on mobile devices in 2023, it turned out people didn’t need a headset.

They want to enter worlds from their phone, quickly, for a couple of minutes, like any other social network.

Bosworth admitted this belatedly: “Building everything twice — once for mobile, once for VR — is a colossal cost for the team” [3].

But the choice was made in favor of VR, which remained a niche product.

Reason 3. Poor Execution: A World That “Kicks Out” Users

The technical execution of Horizon Worlds was so poor that it killed off even the small audience that tried to stay.

Developer forums are full of desperate posts.

One creator, who poured his soul into his virtual nightclub, wrote in 2025:

“People just get kicked out of worlds for no reason. It kills worlds. My world was checked by a well-known cool developer — he said everything was optimized perfectly. But people still crash out. Sound systems are just a nightmare, they crash half the visitors” [5].

And this is not an isolated complaint.

Users complained about:

• Constant crashes (so-called “coining out”) [5].

• Performance problems even on optimized worlds [5].

• Analytics system failures (the creator’s time counter “froze” for a week, even though people were actively visiting) [5].

• Poor quality of recommendation algorithms that couldn’t find interesting content for new users.

Meta’s official documentation acknowledged that algorithms rank worlds according to four parameters: appeal, visit quality, retention, and technical characteristics.

But in practice, technical failures nullified all creators’ efforts.

Reason 4. Unwanted Scenarios: “A Noisy Room for Kids”

The harshest truth about Meta’s metaverse is that no one needed it.

Not in the sense that people don’t need virtual worlds — Fortnite and Roblox are thriving.

But in the sense that Horizon Worlds didn’t offer scenarios that were in demand.

Mistake 4.1: Who is the target audience?

The platform tried to be “for everyone,” but ended up being for no one.

There was no killer app.

Unlike Rec Room, which focused on games and teen communication, or VRChat, which became a haven for anime fans and furries, Horizon Worlds was a strange, empty space without a clear identity.

Analysts point to the problem of algorithmic sorting: the platform started recommending content that appealed to the majority of active users.

And the majority, it turned out, were children and teenagers [6].

As a result, creators making content for adults didn’t get traffic, left, and the platform turned into a “noisy kids’ room,” from which everyone else fled.

Mistake 4.2: Deadly Monetization

Meta, whose business is built on advertising, tried to profit from creators in the most clumsy way.

The company announced it would take 47.5% of revenue from sales inside Horizon Worlds [7].

This is higher than Apple’s (30%) and Google’s (30%) commissions, which have been criticized for years as a “tax on the platform.”

Put yourself in a game developer’s shoes.

You can go to Roblox, where the audience is 80 million daily active users, or Fortnite, or VRChat.

Or you can go to Horizon Worlds, where there are fewer than 200,000 users [6], the platform is buggy, and Meta takes almost half your income.

The choice is obvious.

The creator ecosystem never formed.

Reason 5. Blindness to Trends: How Meta Slept on the AI Revolution

Perhaps the most ironic part of this story is the timing.

Zuckerberg announced a complete restructuring of the company for the metaverse in October 2021.

And a little over a month later, in November 2021, OpenAI quietly launched ChatGPT [8].

By 2023, it became clear: the future was not in bulky headsets and empty virtual worlds, but in generative AI integrated into everyday applications.

While Meta spent tens of billions building a “digital paradise,” the world switched to neural networks that write texts and draw pictures.

Meta had to catch up.

The company created a Superintelligence Lab, bought the AI platform Moltbook, but lost years and the initiative [8].

As one analyst aptly put it, “the metaverse became a victim of artificial intelligence.”

What remains? Results and Lessons

The closure of Horizon Worlds and Workrooms in early 2026 [1] is not just a corporate failure.

It is the collapse of an entire paradigm.

The main lesson of this story: you cannot force a technology on the market that it is not ready for, no matter how beautiful the utopia.

Zuckerberg was not wrong that metaverses will someday become part of life.

He was wrong about the timing and the approach.

Now Meta is refocusing on Ray-Ban smart glasses — a product that solves specific, understandable tasks: shooting video, listening to music, communicating with an AI assistant [9].

The glasses don’t require the user to change their lifestyle, put on a bulky headset, or endure motion sickness.

They simply make everyday things a little more convenient.

This is the main takeaway: technologies win not when they are the most ambitious, but when they are the most convenient and solve real problems.

Zuckerberg’s metaverse didn’t solve any problems — it was itself a problem that users were asked to solve at the cost of time, money, and discomfort.

$80 billion is the price of this lesson for Meta [10].

Expensive, but perhaps it will allow the company not to repeat the mistake with AI and smart glasses.

Sources

1. Meta announces closure of VR version of Horizon Worlds and Horizon Workrooms — Reuters, March 2026

2. Vishal Shah’s internal letter to Reality Labs employees — The Verge, September 2024

3. Andrew Bosworth interview on Meta’s focus problems — Bloomberg, January 2025

4. Cambridge University research on working in VR (Prof. Per Ola Kristensson) — Cambridge University Press, 2025

5. User complaints about Horizon Worlds crashes and bugs — *Reddit r/OculusQuest, 2024-2025*

6. Horizon Worlds active audience analytics — CNBC, February 2026

7. Data on Meta’s commission for creators (47.5%) — The Information, April 2024

8. Timeline of ChatGPT launch and Meta’s reaction — *TechCrunch, 2023-2025*

9. Ray-Ban Meta sales data (7+ million units) — Meta Q4 2025 Earnings Report

10. Interview with former Meta employee Vasuman Mosa — Business Insider, March 2026

© Edgar Grigoryan

System Design Bureau & EWA