Facebook’s parent company is under increasing pressure to focus less on the metaverse, as investors warn it’s an experimental bet that causes “huge and terrifying losses.”
The tech giant changed its name to Meta last year with the intention of building a virtual world that would be used by millions of people.
But Mark Zuckerberg’s metaverse was plagued by technical glitches, with user numbers far below the targets set by executives.
The latest figures show that Reality Labs, the division that builds the metaverse, lost 3.16 billion pounds between July and September, up from 2.27 billion pounds in the same period last year.
Investors rushed to dump Meta’s stock after the company warned that metaverse-related losses “will grow significantly” next year.
Asked why his company focuses on experimental betting, Zuckerberg said: “It would be a mistake for us not to focus on any of these areas that will be of paramount importance to our future.”
But analysts have said that the metaverse “looks like a big bet” – especially given the current economic crisis – and they fear that the road ahead will be “long and painful”.
The virtual reality headsets you need to get the best experience in Meta’s virtual world are expensive. One costs £ 1,300, making it out of reach for many consumers.
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Would you buy virtual land?
Paolo Pescatore of PP Foresight said: “People don’t rush out of their seats to buy a VR headset or even watch 360-degree videos … The new device still looks like an expensive toy.”
Earlier this week, a fund investing in Meta called on the company to reduce its annual investment in the metaverse from $ 10 billion to $ 5 billion.
Altimeter Capital CEO Brad Gerstner warned, “The Meta has drifted into the land of excess: too many people, too many ideas, too little urgency.
“This lack of focus and fitness is overshadowed when growth is easy but deadly when growth slows and technology changes.”
Meanwhile, Insider Intelligence analyst Debra Aho Williamson warned that Meta needs to turn its business around by focusing less on the metaverse and more on correcting its core business.
“How Facebook Inc was a revolutionary company that changed the way people communicate and the way marketers interact with consumers. It’s not that innovative anymore.”
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October 2021: Facebook renames Meta
Meta – which owns Facebook, Instagram and WhatsApp – has more clouds on the horizon as it battles declining ad sales and stiff competition from TikTok.
Revenue in the third quarter fell for the second consecutive time to £ 23.83 billion.
Meta’s share price is likely to drop to its lowest level in six years and the stock has fallen 61.6% since the start of the year.
