Billions of dollars have been poured into Meta’s virtual world with little return on investment, but CEO Mark Zuckerberg says he is holding fast.
Meta CEO Mark Zuckerberg is still hopeful about the company’s Metaverse plans regardless of the billions of dollars it’s sucking up from the company, claiming “someone has to build that.”
Appearing remotely for an interview at the Nov. 30 DealBook Summit in New York, Zuckerberg was asked his thoughts on whether the tech giants’ Metaverse play was still viable given its cost and the doubts cast over the platform, answering:
“I think things look very different on a ten-year time horizon than the zone that we're in for the next few years [...] I'm still completely optimistic about all the things that we've been optimistic about.”
He added part of “seeing things through” in the longer term was “powering through” the doubts held about its ambitions.
Meta's latest earnings, released on Oct. 26, revealed the largest-ever quarterly loss in its metaverse-building arm Reality Labs dating back to the fourth quarter of 2020. Zuckerberg’s virtual reality has cost $9.44 billion in 2022, closing in on the over $10 billion in losses recorded for 2021.
On the earnings call at the time Zuckerberg was unfazed by the cost, calling its metaverse the “next computing platform.” He doubled down on this claim at DealBook:
“We're not going to be here in the 2030s communicating and using computing devices that are exactly the same as what we have today, and someone has to build that and invest in it and believe in it.”
However, Zuckerberg admitted that the plans have come at a cost, Meta had to lay off 11,000 employees on Nov. 9 and the CEO said it had “planned out massive investments,” including into hardware to support its metaverse.
He said the company “thought that the economy and the business were going to go in in a certain direction” based on positive indicators relating to e-commerce businesses during the height of the COVID-19 pandemic in 2021. “Obviously it hasn't turned out that way,” Zuckerberg added.
“Our kind of operational focus over the next few years is going to be on efficiency and discipline and rigor and kind of just operating in a much tighter environment.”
Despite the apparent focus from Meta to build its metaverse, Zuckerberg claimed 80% of company investments are funneled into its flagship social media platforms and will continue that way “for quite some time.”
Investments in Reality Labs are “less than 20%” at least “until the Metaverse becomes a larger thing” he said.
Of the 20% invested in Reality Labs, Zuckerberg said 40% of it goes toward its Virtual Reality (VR) headsets with the other “half or more” building what he considers “the long-term most important form factor [...] Normal-looking glasses that can put holograms in the world.”
Zuck takes bite at Apple
Zuckerberg also took a few jabs at its peer tech company Apple regarding its restrictive App Store policies, the likes of which have placed restrictions on crypto exchanges and nonfungible token (NFT) marketplaces, saying:
“I do think Apple has sort of singled themselves out as the only company that is trying to control unilaterally what apps get on a device and I don't think that's a sustainable or good place to be.”
He pointed to other computing platforms such as Windows and Android which are not as restrictive and even allow other app markets and sideloading — the use of third-party software or apps.
He added its been Meta’s commitment to allow sideloading with its existing VR units and upcoming Augmented Reality (AR) units and hoped the future Metaverse platforms were also open in such a manner.
“I do think it is it is problematic for one company to be able to control what kind of app experiences get on the device.”