On July 3, The Nation ran an article in which journalist-critic Kate Wagner wrote about the “catastrophic failure of the Metaverse,” arguing it “should serve firstly as a [sic] overdue humiliation and secondly as a wakeup call… [that] the tech industry in its current iteration... will not provide anything of lasting value or of considerable productiveness to society.” Per Wagner, the Metaverse’s largest platform, Decentraland, had only 38 daily active users (DAU) on a day in October 2022, and “one of the features designed to reward users in Meta’s flagship product Horizon Worlds produced no more than $470 in revenue globally.” For dramatic effect, Wagner reiterates: “Thirty-eight active users. Four hundred and seventy dollars. You’re not reading those numbers wrong.”

But Wagner’s claims about Horizon Worlds’ revenue are extremely misleading, and simple to falsify. Wagner refers only to “[one] of the features” that generate revenue in Horizon Worlds, which allows users to tip creators, and which may indeed have only generated $470 to date. But you would have to be extremely unfamiliar with tech and product, in general, to assume that tipping is the only revenue stream Meta has built for Horizon Worlds, which is again its flagship metaverse offering. For example, another feature in Horizon Worlds that serves as a revenue stream is “In-World Payments” which brought in $10,000 in October, as was reported by WSJ.

What’s more, the Metaverse doesn’t solely derive revenue from creator tips and in-world payments. It also generates what essentially amounts to ad revenue. For example, Wendy’s and McDonald’s created “virtual restaurants” in Horizon Worlds; a person close to Meta, who requested anonymity, told Pirate Wires Wendy's paid the company several million dollars to create the “Wendyverse.”

Wagner’s 38 active Decentraland users figure is also extremely misleading. It comes from an October Coindesk article about data from third-party blockchain analytics company DappRadar suggesting Decentraland had recently only had 38 visitors in one day. But Decentraland immediately refuted this claim, arguing that the way DappRadar defined users was wrong, and that the platform was currently around 8,000 DAU. A week later, after working with Datacentraland, DappRadar’s own numbers were revised upward to 650 DAU, which was also reported on by Coindesk. While these numbers are still grim for a company that’s raised over $50m to date, with her 38 DAU, Wagner uses deprecated metrics whose own source, DappRadar, considers wrong. It’s easy to find this information online: 100% of it is essentially in two Coindesk articles. It is additionally worth mentioning that around the same time, Horizon Worlds had roughly 200,000 monthly active users, which averages at 6,666 DAU. No discussion of this in Wagner’s piece, even though it would have added highly relevant context.

Of course, it’s no secret that the Metaverse has not come close to generating a return on investment yet — and maybe never will. But there’s something supremely annoying about the apparently overwhelming temptation felt by journalists to humiliate Meta — even if it means dishonestly citing easily refutable numbers — and the tech industry at large, which Wagner reduces to “a never-ending cycle of intangible hype bubbles at its best and financial scams at its worst.” Is it a scam to peddle error-ridden articles as reliable reporting?

-Nick Russo