Mark Zuckerberg Just Buried His Metaverse Dreams
“People will look back a decade from now and talk about the importance of the work being done here.”
Forget a decade; we didn’t even make it six months.
That statement was the rallying cry Mark Zuckerberg told investors in Meta’s Q3 earnings call late last year. It was justification in the face of a changing tide. His shareholders disagreed. Some almost begged Zuckerberg to steer away from the Metaverse and focus on the core products. In an open letter to Meta, one investor asked with “serious conviction” that the company streamline, focus its path forward and drastically cut spending on the Metaverse.
The investor wrote this zinger which summed up the recent struggles:
“Meta has drifted into the land of excess — too many people, too many ideas, too little urgency. This lack of focus and fitness is obscured when growth is easy but deadly when growth slows and technology changes.”
The “excess” has been spectacular. In 2021 and 2022, Reality Labs, the division housing metaverse projects, recorded a cumulative loss of nearly $24 billion, including $13.7 billion last year alone. That’s an insane overspend for very little to show for it.
Unless you count this as a solid return:
I thought not.
Despite the company’s investors panicking, Zuckerberg insisted that he was doubling down — and the costs would continue rising. In that fateful earnings call, he admitted, “We do anticipate that Reality Labs operating losses in 2023 will grow significantly year-over-year.” I’m sure that was met with a standing ovation. When the earnings results made the news, the stock shock was immediate. And it was savage. The company’s stocks fell 18% in after-hours trading, leaving it hovering precariously above the $100 mark. For context, only 13 months earlier, the stock was trading at over $360 a share in September 2021.
While the stock has steadily recovered, it’s important to point out the obvious elephant in the…