Home » There Is No Way Out Of Meta’s Metaverse Money Pit

There Is No Way Out Of Meta’s Metaverse Money Pit

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thursday, meta shocked the financial world Earnings were down 52%, the second straight quarter of decline, and revenues were down 4% year-over-year. This troubled financial analysts as the stock fell 24.5% of his. Jim Cramer crying And I apologize on air for trusting the company.

The main cause of Meta’s decline has been the relentless pursuit of the Metaverse by its namesake, Mark Zuckerberg, through the company’s Reality Labs division, which has lost $9.4 billion so far this year, with a larger, There is a warning that wider losses are coming. 2023.

There are many problems facing Meta, challenges from TikTok, Apple hampering its ability to target ads, etc., but Zuckerberg’s Metaverse Pipe Dream is easiest when we’re talking about the biggest threat to the company’s overall survival. can be pointed out to And if you’re even a little familiar with the Metaverse and its version of Meta, you’ll find that just increasing the immersion with better tech makes it almost impossible for them to get out of this hole. , and there is absolutely no coherent way to withdraw it.

There are only a few ways the current iteration of the Metaverse can bring revenue to the meta.

hardware sales

Sure, Meta did pretty well with Meta Quest 2. Meta Quest 2 is a low-cost headset that he has sold over 15 million in recent counts. However, judging by the fact that Meta had to increase the price of various versions by $100 each due to market conditions, they either sold at a loss or made very little profit. There are important signs that it is likely that

And in the grand scheme of things, 15 million is pretty low in the hardware space. Compared to modern video game consoles, the previous generation has sold 117 million units for his PS4 and 111 units for Nintendo Switch. And that’s on top of the huge revenue they make from their software. There is none.

I don’t have solid data on this, but I use Out of those 15 million headsets, it’s very unfavorable compared to the overall usage of 15 million random players who own a PS4 or Switch. VR players are more likely to wear the headset long, if not permanently, after purchase.And now Meta announced an expensive new A headset that costs as much as all current video game consoles combined, the cheaper Quest 3 isn’t out until next year.

corporate use

A large part of Zuckerberg’s pitch has been to make the Metaverse a place for virtual business, especially in this era of working from home. The problem, of course, is that we’ve yet to produce meaningful evidence that they’re better or more engaging than simple Zoom meetings in most cases.

First of all, if your company wants to meet in the metaverse, you need to provide an actual VR headset to every employee who wants to pay to go there. Then you have to actually get people to use it. itself According to leaked internal documents, executives essentially had to mandate that the team spend time in the Metaverse and host meetings there.

So while Zuckerberg could certainly talk to Accenture and Microsoft about the potential use of the business metaverse, can Meet and work in the Metaverse” and actually… people who want to do it.

entertainment and games

Meta Connect has spent very little time talking about actual video games, just rattling off a few games that are making decent money through the Quest ecosystem. But again, unlike Nintendo and Sony, Meta doesn’t produce his own video games for VR directly, relying on outside developers. And what they’re developing in-house are the different parts of the Horizon Platform that will make Horizon Worlds the social network of the entire metaverse.essentially that teeth The metaverse portion of the Metaverse Plan of Meta.

It’s also terrible.

Horizon Worlds is essentially a giant VR chatroom where you can hang out with friends and play mini-games, but many corners remain completely empty, so you’ll often find yourself in a virtual world with strangers. Or just no one at all. There is a lot of hype about avatars looking bad or having no legs. It’s about looking good and putting your feet on, but that’s missing the whole point.For most people, this is not a fun place to be. I wouldn’t want to spend my time here.

Horizon Worlds has some dedicated players, but they’re a niche within a niche. Of 15 million Quest sales, Facebook reported 300,000 Horizon Worlds players last February.Now that number is actually fell From 100,000 to 200,000, well off Meta’s goal of 500,000 by the end of the year.

The problem is that for a place like Horizon Worlds to make real money, meta would have to start doing things like selling virtual products and virtual ad space there, making an already pretty ugly environment even more Everyone loves to reference Ready Player One when building the metaverse, but in that story the villain was IOI. IOI was a company that wanted to squeeze as much money out of the Metaverse as possible by stuffing the screen with ads. But by that point, that version of the Metaverse was already the most popular one on the planet. remains a villain trying to monetize the shareholder experience.

At this point, I’m pretty sure Zuckerberg’s $20 billion a year on this would make little difference. Indeed, the use of VR is likely to continue to grow over time. Yes, shared virtual spaces are what people like, but everyone works better than the meta is already here, and no amount of emotion tracking or leg mass will change that. It’s the definition of wacky quest, and if he doesn’t pull back from the crisis quickly, his entire company could fall victim.

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