Metaverse Will Result in ‘Significant’ Loss in the Short Term: Mark Zuckerberg
Meta CEO Mark Zuckerberg said during a shareholder meeting that the company is expected to lose a significant amount of money on the metaverse in the short term. In the meantime, it will hope for revenue growth from Instagram Reels.
Meta’s metaverse play will result in a “significant” loss in the short term, according to CEO Mark Zuckerberg, who made the statement during a shareholder meeting on May 26. Zuckerberg said that will be lucrative in the long run, and that the company’s revenue growth will come from its Instagram Reels for the moment.
Zuckerberg believes that the metaverse strategy may result in these losses for up to five years, which will certainly weigh on the company’s stock. The Meta stock price has suffered a precipitous drop in 2022, down 43.4% year to date. The social media giant remains optimistic about the metaverse, despite its Q1 financial report for 2022 being middling.
Meta is doubling down on its metaverse efforts by developing multiple projects. It is also keen on hardware devices, which will play a central role in the metaverse, as users can experience it through VR. It set up its first hardware store in April 2022 to allow users to test hardware.
One of the biggest features is crypto and payments itself, as the company has launched currency for use in its Horizon Worlds VR application. The signs are well and truly clear that Meta wants to dominate the metaverse.
Meta has pivoted heavily towards the metaverse, aiming to be the top platform for its virtual experiences. This change comes as Facebook has difficulty maintaining growth, and Instagram is facing strong competition from the likes of TikTok.
The changing landscape of social experiences is best tackled with VR and AR experiences, and Meta feels that it can pounce on the opportunity. However, as it has been noted before, the effort comes at a cost — billions have been poured into the metaverse and Meta has had to scale back.
It’s not just the full metaverse experience that Meta has been keen on. The company is also focusing on working NFTs into Instagram, such that users can implement NFT collectibles into their profiles. These NFT features are expected in the near term, Zuckerberg said in March 2022. Facebook will also have NFT features.
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