Facebook’s Mark Zuckerberg and company are unmoved. Regardless of where they are, the naysayers are persisting. They reaffirmed this on October 26 as part of the release of the third quarter’s results. “The future of the giant of social networks passes through the metaverse,” they said. One of our top “three goals,” according to Zuckerberg, is the metaverse, said during the earnings call.
The metaverse is, in his words, a “new approach to merge tech in our life,” despite the fact that he noted that “it’s a long road ahead.” The metaverse is a fully immersive 3D environment in which we shall communicate with one another via avatars and devices like virtual reality headsets and goggles, for example.
The information flow and our interactions are still under the sway of big tech in this imagined alternate virtual world. This is the Meta Platforms (META) – Get Meta Platforms Inc. Report version of Facebook as of the end of October 2021.
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Huge Losses
However, there is another decentralized form of the metaverse that may be accessed without the use of virtual reality headsets or goggles. Additionally, users and creators are the data’s owners and masters of their interactions. Because the internet is driven by blockchain technology, this version is more transparent and to some extent free.
Zuckerberg’s plan isn’t working at the moment. It’s even worse because Reality Labs, the department in charge of managing the metaverse’s operations, continues to incur significant financial losses. According to a press statement from the company, Reality Labs’ third-quarter revenue decreased by 49% to $285 million from the third quarter of 2021. In comparison to 2021, the division’s net loss increased.
This loss was $3.67 billion, up 40% from the previous year. Reality Labs’ losses were $9.44 billion in the first nine months of the year, up 37% from the same period last year. Horizon Worlds, a metaverse being developed by Meta, is currently in development. The business sells headsets so that users can fully benefit from this virtual world. A new virtual reality headgear recently made its debut on Meta and costs $1,500.
The headset, known as the Meta Quest Pro, started to be shipped on October 25. Also promised by Zuckerberg were new, less expensive headsets. In an interview with Ben Thompson’s Statechery newsletter, he stated, “I think there’s going to be a consumer gadget like Quest 2 and Quest 3, the next generation that we’re working on, we’re not releasing it right now.” “It’s not this year, but there will be a Quest 3,” he continued, “and that’s in the $300, $400, or $500, that zone, price range.”
More Losses Ahead
All of this calls for further investment, as markets and investors have already voiced doubts about the metaverse. The launch of the next generation of the consumer Quest headset later next year is expected to increase Reality Labs hardware costs, Meta warned on October 26. “Our growth in the cost of revenue is expected to accelerate, driven by infrastructure-related expenses and, to a lesser extent, Reality Labs hardware costs,” Meta warned.
However, the corporation cautioned against making investments that wouldn’t pay off in the short and medium terms, seemingly preparing investors in advance for more letdowns. “We do expect Reality Labs’ operational losses to increase significantly year over year in 2023. Beyond 2023, we anticipate pacing Reality Labs investments so that we can eventually reach our objective of increasing overall company operational profitability “explained Meta.
The company’s goal hurts them when compared to competitors in the metaverse like The Sandbox. According to Mathieu Nazareth, Sandbox’s U.S. chief executive, Meta’s “idea of a metaverse is quite similar to this concept from the movie ‘Ready Player One from Steven Spielberg from a few years ago.”
“And this idea of a metaverse dominated by one business — this picture of the metaverse where you can only experience it through virtual reality goggles and basically people live in favelas, are poor, and live appalling lives outside the metaverse — this vision for me is doomed,” he continued.
A platform called The Sandbox was created using the Ethereum network. In a virtual environment, it allows users to purchase, sell, trade, and possess digital assets. HSBC, an industry leader in banking and financial services, Adidas, Gucci, a manufacturer of luxury clothing and accessories, and PWC are just a few of its clients.
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