At technology company Meta, more than 11,000 employees have to leave these days, but the developers who work on the 'metaverse' are largely spared. CEO Mark Zuckerberg says he firmly believes in this virtual, three-dimensional environment that should usher in the next phase of the internet. So much so that he named the parent company of Facebook, Instagram and WhatsApp after it last year.
Meta is betting big on the metaverse. A concept that is still in its infancy, but should eventually become a world in which we work, learn, recreate and shop together. Its development falls under Meta's Reality Labs division, which has already made a loss of $ 9.4 billion this year. It does not stop there: chief financial officer David Wehner expects the operating loss to increase "significantly" next year. In total, Meta's investments in the project are now estimated at more than 100 billion dollars.
According to some of the investors, this is too much. They point to Meta's declining turnover (for the first two quarters in a row, due to less advertising revenue and more competition from TikTok in particular) and the sharply slumped stock market value (-65 percent this year). In that context, such a large investment in an “unknown future” is “terrifying even for Silicon Valley standards,” wrote critical investor Brad Gerstner in an open letter to Zuckerberg.
“Meta has risked its entire business and reputation for the metaverse, and that gamble has not paid off so far,” said Rachel Foster Jones of GlobalData, a London-based market analyst. Although betting big on the metaverse is not a bad choice, according to her. “The technology behind it will grow enormously and offer a multitude of opportunities. But it will take at least ten years before it really gets going.” Other listed tech companies also see this. Microsoft, Google, Apple and Nvidia, among others, are already investing in software and hardware for the intended new environment in virtual reality, as are Sony, Disney and Roblox in the games sector. In the first five months of this year, according to consulting firm McKinsey, more than $ 120 billion was invested in the metaverse, compared to $ 57 billion in the whole of 2021. And that creates jobs:
Full story here