The tech giant changed its name to Meta last year as part of plans to build a virtual world to be used by millions of people. But Mark Zuckerberg’s crossover has been plagued by technical problems, with user numbers well below the goals executives have set. The latest figures show that Reality Labs, the division that builds the metaverse, lost £3.16bn between July and September, compared with £2.27bn in the same period a year earlier. Investors were quick to dump Meta stock after the company warned that losses linked to the metaverse “will increase significantly” in the coming year. When asked why his company is focusing on experimental bets, Zuckerberg said: “It would be a mistake for us not to focus on any of these areas that are going to be fundamentally important to our future.” But analysts said the post-stranglehold “feels like a big gamble” – especially given the current economic crisis – and they fear the road ahead will be “long and arduous”. The VR headsets required to best experience Meta’s virtual world are expensive. One costs £1,300 – putting it out of reach for many consumers. Use Chrome browser for more accessible video player 3:40 Would you buy virtual land? Paolo Pescatore from PP Foresight said: “People are not rushing out of their seats to buy a VR headset or even watch 360-degree video… The new device still feels like an expensive toy.” Earlier this week, a fund that invests in Meta called on the company to reduce its annual investment in the metaverse from $10 billion to $5 billion. Altimeter Capital CEO Brad Gerstner warned: “The Meta has drifted into the land of excess – too many people, too many ideas, too little urgency. “This lack of focus and fitness is overshadowed when growth is easy but deadly when growth slows and technology changes.” Meanwhile, Insider Intelligence analyst Debra Aho Williamson warned that Meta needs to change its operations — focusing less on the metaverse and more on fixing its core business. “As Facebook Inc it was a revolutionary company that changed the way people communicate and the way marketers interact with consumers. Today it is not so revolutionary anymore.” Use Chrome browser for more accessible video player 01:00 October 2021: Facebook is rebranded as Meta Meta – which owns Facebook, Instagram and WhatsApp – has other clouds on the horizon as it struggles with declining ad sales and stiff competition from TikTok. Revenue in the third quarter fell for the second time in a row to £23.83bn. Meta’s share price is at risk of falling to a six-year low – and the stock is down 61.6% since the start of the year. For more on science and technology, explore the future with Sky News at Big Ideas Live 2022. Find out more and book tickets here
