Have you ever bought something and instantly regretted it? Meta might have us all licked as the Facebook parent company has spent $15 billion (US) developing its metaverse since the beginning of last year.
The news has spooked one tech analyst, claiming that the company’s lack of transparency with investors has been a “disaster.”
Meta began to disclose some financial information for its Reality Labs department last year and revealed that it had sunk more than $10 million into the venture. In the first six months of 2022, the company reported a loss of more than $5 million. Meta has said that it does not break out the financial details of Reality Labs, beyond broad profit and loss.
“The problem is that they spend the money, but the transparency with investors has been a disaster,” Dan Ives, a tech analyst at Wedbush Securities, said.
“This continues to be a risky bet by Zuckerberg and the team because, for now, they’re betting money on the future while they continue to have massive headwinds on their core business,”
However, despite Reality Labs and the metaverse seemingly being bottomless pits, the company is still pushing forwards in developing new tech and partnerships. Last week, Meta announced a range of new features for avatars and a new VR collaboration with NBCUniversal.
Meta also revealed a new deal with English Premier Club Liverpool, allowing users to wear the team’s famous all-red home kit, technicolour away kit, or a variety of branded merch.
But, despite Meta’s best efforts to get users on board by improving avatars by adding legs and slightly more expressive face models, no one seems to be convinced.
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An internal Meta memo seen by The Verge suggested that even the people developing the software remain unconvinced.
“For many of us, we don’t spend that much time in Horizon and our dogfooding dashboards show this pretty clearly,” wrote Vishal Shah, Meta’s VP of Metaverse on 15 September.
“Why is that? Why don’t we love the product we’ve built so much that we use it all the time? The simple truth is, if we don’t love it, how can we expect our users to love it?”
In a follow-up memo on 30 September, Shah wrote:
“Everyone in this organization should make it their mission to fall in love with Horizon Worlds. You can’t do that without using it. Get in there. Organize times to do it with your colleagues or friends, in both internal builds but also the public build so you can interact with our community.”
Mark Zgutowicz, a tech analyst at Benchmark estimated that at least 60% of Reality Labs’ operating expenses come from research and development.
But he also cautioned: “There is no real metaverse, at least from a scalable standpoint, until we all can wear glasses that don’t make us look like an alien or something.”
