Although the Meta founder and CEO Mark Zuckerberg has high ambitions for the company’s future in the Metaverse, its financial status may be forcing him to stall them for the time being.
According to Zuckerberg himself, Meta plans to “slow the pace” of some of its investments due to its “current business growth levels.” He made this statement during a quarterly financial report last Wednesday, during which he pointed out that while the company’s net profits were over $10.5 billion, they were still over 20 percent lower than what they were this time last year.
Although Meta is still in a healthy financial state, its revenues have been heavily impacted by many people leaving its platforms. TikTok has become a strong competitor for user’s time and attention, while Apple’s change in advertising policies have cost the company over $14 billion in revenue.
“Meta’s ad business continues to face some very real challenges,” said Jasmine Enberg, a principal analyst at Insider Intelligence. “Facebook, of course, is no stranger to obstacles, but the iOS changes are the first direct threat to its ad business. Combined with the rise of TikTok, brand safety concerns, and a shift in social media user behaviour, there’s a perfect storm heading straight for Meta’s ad revenues.”
These recent development have seen the Meta stock price drop by over 50 percent, with investors now revealing their scepticism on Zuckerberg’s costly Metaverse expansion project.
Which is not to say that it isn’t going to happen at all, just not when we (or even the Facebook figurehead himself) may have originally thought it would. Meta still continues to spend billions on this project, with its Reality Labs division already in the midst of creating new devices (such as the Oculus Quest 2) and platforms (like Horizon) which will compete with popular existing ones like Roblox or Decentraland.
Zuckerberg has already expressed his opinion that soon the Metaverse and virtual reality devices will become as popular and commonly used as smartphones.
