Can Zuckerberg’s $100 billion metaverse project succeed?
New York City: During the third quarter, the Reality Labs branch of Meta had a loss of $3.672 billion. A few of the company’s stockholders are dissatisfied with the excessive amount of capital that has been invested on metaverse technology.
The big experiment in the metaverse that Mark Zuckerberg has proposed is not universally seen as a sound plan. The social media behemoth Facebook renamed as Meta in 2021, and ever since then, its primary emphasis has been on developing augmented reality applications that bridge the gap between the digital and physical worlds. One of the company’s shareholders, on the other hand, has only lately sent a letter to the CEO in which they describe the metaverse investment as “super-sized and scary.”
Those worries were shown to be well-founded in a very short amount of time. After the closing bell on October 26, Meta announced its financial results for the third quarter of the year, and the figures showed that the company’s metaverse segment had underperformed. During the course of the quarter, Meta’s Reality Labs suffered a staggering loss of $3.672 billion, reflecting a fall that was seen in Q1. When you go to an area that has not been explored before, you put yourself in this position of potential danger. Despite all of the excitement around the metaverse, the majority of these new social realms are still vacant. Will Meta be able to fill the gap? The only way to know is to wait.
Some of Meta’s own stockholders are becoming tired of the company’s gamble on the metaverse as well as the enormous cost that goes along with it.
The Chief Executive Officer of Altimeter Capital, Brad Gerstner, recently issued a letter to Facebook CEO Mark Zuckerberg in which he suggested the firm reduce its yearly investment budget for the metaverse from $10–15 billion to $5 billion. He described as “super-sized and scary” the hyper-fixation that has been placed on metaverse technology. Due to the fact that Altimeter Capital has a 0.11% interest in Meta, it is very improbable that Mark Zuckerberg would take the advice to heart. But a $10 billion yearly investment by Meta would amount to $100 billion over the course of ten years for an idea that, according to Gerstner, is not even close to being demonstrated.