But what is happening at Meta right now? Facebook’s parent company has just announced disappointing results this quarter and the market sanction was not long in coming: the value of the company’s shares fell by more than 19% after the market closed.
In question: there is of course the context of the economic slowdown which affects all Big Tech players – with rare exceptions. Advertisers are less willing to invest in campaigns, which directly and immediately affects industry revenue. On top of that, Meta faces challenges in audience targeting and analytics due to Apple’s new privacy rules.
Does the Metaverse distract Mark Zuckerberg too much from the dangers of the present?
Meta must also face competition from new players like TikTok. But above all Meta bears the brunt of a risky bet by its boss Mark Zuckerberg around the Metavers (according to him the future of social networks, 100% in virtual reality). As well as a global roadmap that does not make anyone understand how Meta is going to reverse the decline in turnover that is currently affecting the group.
To make matters worse, after having just presented a Pro virtual reality headset at €1,799.99, the group is also already announcing the arrival of Meta Quest 3 a little later this year. Which doesn’t seem to give the product much time to sell without an alternative in the face. While taking into account the fact that, for the time being, VR is not as promising as Mark Zuckerberg hoped.
When announcing the results, the group estimated that the final turnover would be in the range of 30 to 32.5 billion dollars – knowing that analysts are counting on their side rather on 32.2 billion. But the signals are red: net profit fell 52% in the quarter to $4.4 billion, below the expected $5 billion.
For his part, the boss of Meta recognizes “short-term challenges around turnover” but wants to believe at the same time that “the fundamentals are there to reconnect with stronger revenue growth”. So how does Mark Zuckerberg really intend to get Meta out of the impasse?
Obviously, especially not changing course. The group will bank on short video formats inspired by TikTok, corporate messaging, and, of course, the Metaverse. Mark Zuckerberg has also tried to reassure investors about his VR worlds in which he believes so much – by assuring them that this bet would eventually pay off.
Unfortunately, this still remains to be demonstrated. “I appreciate the patience [des investisseurs] and those who are patient and continue to invest [chez Meta] will be rewarded”wanted to believe the boss of
And that, on the contrary, the firm has the courage to be a pioneer in a field “of historical significance”. Still, it’s hard not to agree with critics of Meta’s efforts in VR. The design of the Horizon Worlds application, and its characters, does not inspire the future. In fact, everything exudes infographic language that seems to come straight from the 2010 decade, when Nintendo launched its Amiibo.
Beyond that, the cost of the entry ticket to Facebook’s Metaverse seems very high for a majority of users. And it is not certain that beyond the vision of Meta, Facebook members will really want to spend as much time in the Metaverse as they already spend on their newsfeed and on Facebook and its other more traditional applications in general.
In short, for now, the whole question is whether or not the Metavers has a short and medium term future, in the state of its development. And the doubts seem to be shared by investors. The turnover of Reality Labs, the division dedicated to the Metaverse of the group, melted by 50% in the 3rd quarter to settle at 285 million dollars. The net deficit increased to $3.7 billion from $2.6 billion a year earlier.
A financial pit, which, although it is presented as a virtuous investment in the future, seems for the moment above all to distract the entrepreneur from the reality of the dangers which threaten the company, here and now, in reality everything short, and the present.