Tech

The Metaverse costs Zuckerberg dearly and Meta collapses in the stock market by 19%

Meta shares slumped 19% in after-hours trading last night, after Meta posted weak financial results with earnings below analysts’ expectations and unconvincing future forecasts.

Operating losses came primarily from departments related to the Metaverse. The company’s virtual reality and augmented reality divisions recorded losses of 3,670 million dollars. And the worst is yet to come: “losses will grow significantly in 2023”.

“We anticipate Reality Labs operating losses in 2023 to grow significantly”, recognize from Meta. Reality Labs refers to the business segment of Facebook that includes hardware, software, and content related to virtual and augmented reality. “Beyond 2023, we expect to accelerate investments such that we can achieve our goal of increasing the company’s overall operating income over the long term.”.

goal points to the Huge investment made in the Metaverse with a change of name from Facebook included to try to leave behind the scandals of the social network in terms of privacy and for the expenses generated in the development of the Meta Quest Pro VR helmets aimed at companies and professionals. In this regard, the company has confirmed that its consumer variant will be available in 2023 as an improved upgrade to the current Quest 2.

The Metaverse and Meta Actions

Marc Zuckerberg wants to become the “king of the metaverse”. And maybe in a few years/decades millions of users will access these virtual worlds and Meta can recover the investment. As much as you see the Metaverse even in the soup, the current reality is that it is green, not the above.

Big players in the industry are skeptical not only of its media coverage, but also that it will “end the internet” as we know it to become the next great communication platform at scale. Investors don’t believe it and the collapse of Meta shares has been monumental. Some large investment funds have already recommended Zuckerberg reduce investment in the Metaverse and the results seem to prove them right.

goal actions

Money is fearful and wants short-term results. And it is not possible. From Intel they have already come out to relax the hype indicating that to develop the virtual worlds described by Zuckerberg we would need to multiply the current computing power by a thousand. And, well, the closest sample is that Virtual Reality in consumption has been a fiasco and from augmented reality the most newsworthy thing has been Pokemon on mobiles… It is true that Meta, after the purchase of Oculus, dominates 90% of the VR device market. If one day it sells as expected…

And not just Metaverse. “Mark Zuckerberg’s decision to focus his company on the future promise of the metaverse diverted his attention from the unfortunate realities of today”Insider Intelligence analysts have explained. “Meta is under incredible pressure from weakening global economic conditions, challenges with Apple’s AppTrackingTransparency policy, and competition from other companies, including TikTok, for users and revenue”.

With the current economic and geopolitical situation, the Metaverse could be the future of Facebook or the grave of Zuckerberg. We will see.

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