In a nutshell: with Facebook changing its name to Meta and so much attention being paid to the future of virtual reality, it can be assumed that more people have bought VR headsets this year. The disturbing reality for the social media giant is that the opposite has happened: in 2022, shipments dropped by more than 12% compared to the same period last year.
Despite resistance from consumers and industry figures, Meta continues to double its ambitions for the metaverse. Reality Labs, the unit responsible for this division, has lost about $16 billion since the beginning of last year, while Facebook’s net profit is falling as advertisers fail to keep up with their expenses in these times of economic turmoil.
But could Mark Zuckerberg’s obsessive belief in the metaverse be the reason for his downfall? Things don’t look good. The general world of virtual reality, of course, requires users to own VR headsets, but their sales in the US this year fell by 2% (YoY) to $ 1.1 billion. This is even worse news globally, with shipments down 12% year-on-year to 9.6 million, according to data provided to CNBC by research firm NPD Group.
The numbers hardly bother Zuckerberg. The CEO says that investments in the metaverse today may not bring any results for the next decade, after which the virtual reality platform could potentially start bringing in hundreds of billions, if not trillions of dollars.
However, few people share Zuck’s belief that the virtual reality space will become the new Internet. One analyst recently predicted that by 2025, most of the metaverse’s business projects will be closed. Elsewhere, a survey of nearly 10,000 teenagers earlier this year found that half of them are not interested in the metaverse, and we’ve even heard of some meta employees who share this skepticism.
Then John Carmack. The legendary programmer, who has worked at Facebook/Meta since acquiring Oculus in 2014, expressed disappointment with the progress of the metaverse in October. This month, he left the company, calling Meta inefficient, constantly self-harming and unprepared for the inevitable competition that will eventually come.
But it’s not all bad news for Meta. As in many other industries, VR headsets saw a sales boom last year – according to NPD, revenue in the U.S. doubled from about $530 million in 2020 — thanks in part to all the promotions and the pandemic, so the decline is not entirely unexpected. And Meta’s Oculus Quest 2 continues to dominate the Steam survey with a user share of almost 50%. Another question is whether this will calm the nervous Meta shareholders.