Zuckerberg's metaverse 'virtual dream' shattered

metaverse - Ảnh 1. — Attendees experience the Caliverse Hyper-Realistic Metaverse project at the Las Vegas Convention Center, Nevada, USA in January 2023 - Photo: AFP

According to the Financial Times , the leading US technology corporation is considering cutting up to 30% of its budget for the metaverse, which means that layoffs could begin early next year.

Metaverse Decline

Since 2021, Meta CEO Mark Zuckerberg has been betting big on the metaverse - a digital universe built to create a 3D social platform - where users can communicate, entertain and do business.

Renaming Facebook to Meta and investing tens of billions of dollars in Reality Labs - the department in charge of the metaverse - also aims to demonstrate the vision of this virtual world . Mr. Zuckerberg once affirmed: "The metaverse will be the next frontier, just like when we first started with social networking."

But from the very beginning, many investors and experts were skeptical about the metaverse ambitions and advised Mr. Zuckerberg to cut back on these projects because they consumed resources without generating revenue. They said the field lacked competition and the user market was not ready.

CNN once described the metaverse as "a rather vague concept" that emerged when people had just escaped the isolation period due to the COVID-19 epidemic and wanted to reintegrate into real life.

In fact, the market results have also exposed the difficulties that Meta cannot hide. Specifically, the metaverse comes with an avatar-based social networking platform and devices such as VR glasses (virtual reality glasses) - products with high prices but low convenience, making it difficult for the metaverse to go beyond the boundaries of an experimental technology.

Meta initially set a goal of reaching 500,000 monthly active users on Horizons Worlds, a virtual reality space in the metaverse. However, Meta has had to adjust that target down by nearly half by the end of 2022, according to the Wall Street Journal.

Reality Labs lost $4.4 billion in the most recent quarter, bringing its total losses since the end of 2020 to over $70 billion, according to CNBC. The related cryptocurrency market also plummeted, falling from over $500 billion to just $3.4 billion, with tokens like SAND, MANA, and RENDER losing value severely.

"It's not encouraging for a company to have such a loss. We see a contradiction between what investors are thinking and what Meta is calculating," said James Lee, CEO of Mizuho Securities USA.

In light of the fact that Meta is planning to cut its metaverse budget by about 30% by 2026, directly affecting its Horizon Worlds virtual world product and Quest virtual reality headset line. On December 4, Bloomberg News reported that if the cut is at this level, there will likely be layoffs at Reality Labs as early as January 2026.

Meta’s moves are seen as inevitable and have been positively received by the market. On the morning of December 4, Meta shares increased by 4%, raising its capitalization to 1.68 trillion USD, reflecting positive expectations from investors regarding the company’s strategic adjustment.

Focus on AI

In parallel with narrowing the metaverse, Meta is said to shift its focus to artificial intelligence (AI) and smart glasses - areas that are considered to have higher profit potential.

Meta is currently pouring billions of dollars into recruiting AI talent, building large-scale computing infrastructure, developing open-source AI models, and deploying chatbots for social networking platforms as well as new-generation smart wearable devices.

A recent highlight of Meta is the smart glasses line in collaboration with Ray-Ban - Meta Ray-Ban Display - a product that is receiving a lot of attention from users. CEO Zuckerberg believes that AI-integrated wearable devices will replace smartphones in the future, becoming the center of the "personal super intelligence" strategy.

Notably, the company also established a new design studio in Reality Labs, focusing on developing AI-integrated wearable devices, in cooperation with the leading group in the eyewear industry EssilorLuxottica, under the leadership of Mr. Alan Dye - former design leader of Apple.

Earlier this year, Meta launched its Super Intelligence Lab, in partnership with Scale AI CEO Alexandr Wang. The $14.3 billion investment gives Meta a 49% stake in the startup.

"We are shifting some of our investment from the metaverse to AI glasses and wearables due to the strong growth in this space. We have no other major changes planned," a Meta Labs spokesperson told FOX Business.

Analysts say this shift was strongly fueled by the ChatGPT "earthquake" at the end of 2022. In the context of the entire industry expected to spend up to 400 billion USD on AI by 2025, Meta also announced a separate capital expenditure of 65 billion USD for this year.

Experts say this is an inevitable step if Meta wants to maintain its position in the AI race - a race that redefines the future of technology like social networks did more than a decade ago.

In April, Mike Proulx, vice president of market research firm Forrester, predicted that Meta would be forced to shut down metaverse projects like Horizon Worlds before the end of the year. He commented that Reality Labs was "like a leaky bucket" and that shrinking the metaverse would help Meta focus more on AI.

Cost optimization

Business Insider magazine quoted analysts from TD Cowen Bank estimating that cutting the metaverse budget by 30% would save Reality Labs $4-6 billion by 2026.

BNP Paribas also said the move could raise its 2027 profit estimate, or even higher if Meta cuts spending across the company.

"This is a smart move, just a little late... The change in cost adjustments is consistent with revenue forecasts that are no longer as promising as they were a few years ago," said Craig Huber, an analyst at consulting firm Huber Research Partners.

HEART AND SUN

Source: https://tuoitre.vn/giac-mong-ao-metaverse-cua-zuckerberg-tieu-tan-20251209101646027.htm