Mark Zuckerberg ‘can’t guarantee’ future of metaverse
The metaverse, Meta’s ambitious vision for a virtual reality space, is in murky waters.
Mark Zuckerberg issued a cautious message to investors, stating, “I can’t guarantee you that I’m gonna be right about this bet.” This statement follows the company’s disclosure of a $3.7 billion loss in share repurchases for the third quarter of 2023.
Although Meta recorded a 23% increase in revenue year-over-year, amounting to $34.15 billion, the costly share repurchase has stirred concerns.
Operational costs and expenses, which fell by 7% to $20.4 billion, failed to alleviate investor worries.
One significant cause for concern is Reality Labs, the division driving Meta’s VR and metaverse projects.
It has drained the company of $11.5 billion this year alone.
As reported by Tech Insider, in the same earnings call, Meta’s CFO Susan Li announced that Reality Labs’ revenue dipped by 26%, settling at $210 million for Q3 2023.
The company anticipates that operating losses for this division will “increase meaningfully,” adding more uncertainty to Meta’s financial health.
During the call, while “AI” was mentioned 47 times, the term “metaverse” was spoken only three times by the company’s CEO and CFO. It appears that AI remains a primary focus for Meta, but the waning mentions of “metaverse” could be telling.
Zuckerberg’s lack of confidence might also be linked to the company’s ongoing restructuring efforts.
Initiated in 2022, these measures have led to a 24% reduction in Meta’s workforce. Restructuring charges for the third quarter alone totalled $380 million, making the financial outlook even more challenging.