Meta Platforms is reportedly preparing to significantly scale back its investment in the metaverse, a strategic shift that comes after over $70 billion spent on the virtual reality initiative since 2021. The company, formerly known as Facebook, is considering budget cuts of up to 30% for its horizon Worlds platform and Quest VR headsets, signaling a potential pivot towards other technologies. This move, first reported by Bloomberg and confirmed by multiple sources, arrives as Meta faces investor pressure and acknowledges slower-than-expected development in the virtual reality space.
Jakarta –
Meta Platforms, formerly known as Facebook, is reportedly considering significant budget cuts – potentially up to 30% – for the teams responsible for its Horizon Worlds virtual reality platform and Quest VR headsets. The move signals a major shift away from the metaverse, a project that has cost the company over USD 70 billion since the beginning of 2021.
The dramatic reversal of strategy, announced in October 2021 by CEO Mark Zuckerberg, has faced substantial challenges, from the underwhelming graphics of Horizon Worlds to significant financial losses and recent layoffs. Meta’s ambitious bet on virtual reality has failed to convince investors and the public of the metaverse’s potential.
According to a report by Bloomberg, potential layoffs could begin as early as January, though a final decision has not yet been made. The news sent Meta’s stock price soaring more than four percent, indicating investor relief at the prospect of a reduced focus on the metaverse.
SCROLL TO CONTINUE WITH CONTENT
“Smart move, just late,” said Craig Huber, an analyst at Huber Research Partners. The market reaction underscores the extent to which shareholders have grown frustrated with Meta’s metaverse initiatives.
Meta is now pivoting towards artificial intelligence (AI), committing USD 72 billion to the technology this year. This shift is expected to significantly impact the Reality Labs division, which oversees the metaverse projects. Zuckerberg has acknowledged that virtual reality has not developed as rapidly as anticipated.
The company’s financial performance has been closely watched by investors as it navigates this strategic transition. The USD 70 billion loss represents a substantial financial burden and highlights the risks associated with investing in emerging technologies.
While the metaverse project may continue in some form, its initial ambitions appear to be fading. The future of Zuckerberg’s metaverse dream remains uncertain, but the signs of its struggles are becoming increasingly apparent.
(fyk/fyk)
