According to a recent opinion piece by Bloomberg, Facebook CEO Mark Zuckerberg's ambitious push into the metaverse has incurred a whopping $21 billion in losses for the company, with little tangible results to show for it.
Despite the massive investment, Zuckerberg's Meta, the parent company of Facebook, has only managed to sell around 20 million units of the Quest virtual reality (VR) headset since 2019. Additionally, their flagship VR experience, Horizon Worlds, has only attracted around 200,000 active users. These numbers seem minuscule in comparison to the vast amount of money spent on developing Meta's much-hyped metaverse.
This situation raises a crucial question: how much more is Zuckerberg willing to spend to ensure the success of his metaverse venture? The author of the opinion piece wonders about the sustainability of such substantial financial commitments.
To understand why Zuckerberg has the liberty to pour money into the Metaverse project despite significant losses, it's essential to recognize that Meta's original advertising business remains robust. The ad revenue has been showing double-digit growth since late 2021, which acts as a distraction for investors, keeping concerns about the $21 billion metaverse expenditures at bay.
On the other hand, revenue from Meta's metaverse-related business, including headset sales, apps, and associated services, has been declining between 2021 and 2022, with further declines anticipated for the current year.
Despite these financial challenges, Zuckerberg appears unfazed and optimistic about the metaverse's potential success. He recently expressed his belief that these ventures will eventually pay off, asserting that Meta is at the forefront of these technological areas.
The opinion piece concludes that Meta is unlikely to abandon its metaverse ambitions, partly because a retreat would make their recent name change to "Meta" rather awkward. However, there are concerns that a failure in the metaverse push could weaken Zuckerberg's position as the CEO of the company, although his standing has improved with the success of Meta's Twitter-like platform, Threads.
The author points out that Threads managed to attract more users than Horizon Worlds within a significantly shorter development period and with minimal advertising. This leads to the suggestion that Meta should redirect its focus toward nurturing Threads rather than tirelessly pursuing the metaverse.