While 2022 has been difficult for the tech sector as a whole, Meta has had a particularly difficult year. Since the company’s name change in October 2021, when its stock was trading at $323.57 per share, it has seen a 60% decline in value. MarketWatch reports that Meta is currently selling at $114.74.
“At Reality Labs, it’s our duty to bring that vision to reality,” wrote Reality Labs CTO Andrew Bosworth in a business article. “Meta began this year with a new identity and a new vision for the future.” “We never imagined that it would be simple or uncomplicated, however, this year was much harder than we anticipated. The pressures on Meta’s main business and the global economic issues, according to Bosworth, “generated a perfect storm of cynicism about the investments we’re making.”
In September 2020, Facebook Reality Labs was introduced by Meta, followed by Facebook. The metaverse project, which Meta revealed when it changed its name last year, was to be developed by Reality Labs, the firm that produced the Oculus Rift VR device in 2016.
According to Bosworth, “the adoption of these technologies by the ecosystem of developers, artists, and builders that has developed around these devices” will determine their long-term value. In October, Meta said that its Reality Labs metaverse branch had lost more than $3.6 billion in the third quarter of 2022 as opposed to $2.63 billion at the same point in the previous year. Bosworth claimed that 80% of Meta’s total investments went to Facebook, WhatsApp, and Instagram while just 20% went to Reality Labs, which is Meta’s primary company.
For a business devoted to remaining at the forefront within one of the most competitive and innovative sectors on earth, Bosworth wrote, “It’s an investment level we believe makes sense.”
The CEO of Meta, Mark Zuckerberg, claimed in November that he still had a long-term vision for the metaverse despite the $3.6 billion loss and following 11,000 employee layoffs. The term “metaverse” is used to refer to the next iteration of the internet, which is a persistent, shared virtual environment where users communicate using 3D avatars. Many in the cryptocurrency industry believe that the future of the metaverse will be shaped by blockchain, especially non-fungible tokens, or NFTs.
Horizon Worlds, the company’s metaverse project, was given to Reality Labs to develop. The initiative has had trouble gaining momentum. It was put under “quality lockdown” in October after internal correspondence showed that not even Meta personnel were signing in. The business’s lauded demonstration of its most recent improvements to human avatars.
While this is happening, other metaverse-focused players have united to oppose Meta’s potential hegemony. The Open Metaverse Alliance is working to create an interoperable, blockchain-based metaverse. Its members include Dapper Labs, The Sandbox, Animoca Brands, Alien Worlds, Decentraland, MetaMetaverse, and Unstoppable Domains.
Meta started implementing its planned integration of NFTs for its over two billion monthly Instagram users in November, referring to them as digital collectables rather than the frequently derided name NFTs. Investors are dissatisfied with Zuckerberg’s metaverse play if Meta’s current stock price is any indicator. Bosworth, however, sees it as a test even though the numbers might seem scary.
It’s simple to make large, ambitious investments in the future during boom times, according to Bosworth. “However, when economic conditions change, it’s also simple to make the other turn: scale back on your goals, stick to what is currently safe and profitable, and squeeze every last drop of value out of it. These are the times that, in his words, “really test people’s faith in the future.”