As Mark Zuckerberg cuts back on spending on the metaverse—the virtual reality platform that he bet big on in 2021—Meta and companies hoping to profit from working with the tech behemoth are undergoing a reset.
Meta poured over $70 billion into Reality Labs, Meta’s virtual-reality research arm, to develop the metaverse and its associated hardware and software over the last four years. Zuckerberg’s reprioritization can be seen as something of a defeat, but that’s not to say the company is fully pulling back: Even slashing 30% from the metaverse budget still leaves opportunity to build. And executives at Meta have told metaverse workers to use AI to work 5-times faster.
Take charge. Joe Fath, head of growth at investment firm Eclipse, told IT Brew that he generally sees Zuckerberg as an assertive presence, quickly taking action when things aren’t working out. But the metaverse was different; it took longer for Meta to pull back—and they lost ground in the AI race.
“They’re probably a little bit behind the curve and making sure they don’t get too far behind,” Fath said.
That doesn’t mean the door is closed completely. According to Bloomberg, Zuckerberg remains steadfast in his long-term vision for VR and believes that the technology will, sooner or later, be how humans play, work, and spend money.
Chances. Fath called what Zuckerberg did with Reality Labs an example of a “moonshot bet” that, if and when it pays off, will keep Meta as a major tech player. That’s key, tech critic Cory Doctorow said during a recent University of Washington lecture, because Silicon Valley relies on endless growth to reward shareholders beyond all else. It’s a wager on continued stock price increases and returns.
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“I’m not saying that tech bosses are making bets they don’t plan on winning,” Doctorow said. “But I am saying that winning the bet—creating a viable metaverse—is the secondary goal. The primary goal is to keep the market convinced that your company will continue to grow, and to remain convinced until the next bubble comes along.”
News you can use. For IT pros watching and wondering how this will impact their bottom line, Fath urged a measured approach. Pulling back on some of the initiatives around the metaverse doesn’t mean the platform will never find a market fit; it just means that, for now, there’s a need to reassess the plan.
“This may be a good thing, it drives more discipline and they continue to innovate in this area,” Fath said. “We may see a metaverse 2.0 that’s very different, but you need to get product market fit, it has to resonate with the consumer.”
