Mark Zuckerberg's Shift Away from the Metaverse
Mark Zuckerberg has noticeably reduced his references to the metaverse in interviews, public appearances, and shareholder meetings. Initially, in October 2021, he presented the metaverse as the cornerstone of his company's future, even leading to the rebranding of Facebook as Meta during a significant reputational crisis. The metaverse was touted as the next evolution of the internet—an immersive virtual world that would generate “hundreds of billions of dollars” by 2031. Some analysts even predicted an $800 billion market by 2024.
Budget Cuts and Strategic Reorientation
Recent announcements highlight a stark contrast to these early forecasts. Bloomberg reported last week that Meta plans to reduce its metaverse budget by 30% next year, particularly affecting Reality Labs, the division focused on long-term developments such as augmented reality glasses and virtual reality headsets. Notably, in a year-end summary, Andrew Bosworth, Reality Labs' head, mentioned the word “metaverse” only in passing.
This budget cut raises questions about the viability of the metaverse. Some analysts suggest it reflects a pivot to prioritize advancements in artificial intelligence (AI) instead. However, sources at Meta clarified that the adjustment involves reallocating funds from the metaverse towards AI glasses and wearable technology, rather than an outright abandonment of the metaverse initiative.
The Role of AI in Future Technologies
As Meta navigates this transition, the focus has shifted to AI. Zuckerberg has recently highlighted their developments in chatbot models and the new Ray-Ban smart glasses, which have shown promise unlike previous virtual reality devices. At a corporate event in September, he stated that virtual reality, augmented reality, and AI will collectively define the future of the metaverse. Progress is indeed being made in all three areas.
Victor Javier PĂ©rez, marketing director at Invelon, notes that the success of the Ray-Ban glasses is leading Zuckerberg to explore new paths toward the metaverse. By leveraging interactive glasses, Meta may gradually introduce more advanced features rather than depending heavily on virtual reality, which can be less intuitive for users. The incorporation of a neural bracelet for gesture control exemplifies this innovative approach.
Meta's Market Position and Industry Competition
Meta is not alone in its pursuit of smart glasses, as companies like Google and HTC are developing their own models. This trend indicates a promising future for augmented reality devices. According to Andrew Bosworth, the search for the next computing frontier has pointed towards AI glasses as the desired platform.
While Zuckerberg previously indicated that building the metaverse would take many years, Roberto Romero, an expert in immersive media, believes a significant technological evolution will be necessary for hyperconnected devices to replace smartphones. Meta has made notable strides toward this digital realm, with the recent launch of Hyperscape Capture, a tool enabling users to create virtual replicas of real-world spaces.
Shareholder Concerns and Financial Implications
Despite Meta's efforts, the company faces scrutiny from shareholders regarding the sustainability of its metaverse investments. The Reality Labs division has incurred losses exceeding $70 billion since early 2021, raising concerns about the project's viability. The announcement about budget cuts led to a surge in Meta's stock price, reflecting shareholder reactions to more prudent financial management.
