Zuckerberg’s Metaverse Stalls as Profits on Virtual Reality Headsets Decline in 2022
Edited by: TJVNews.com
Seems like social media tycoon, Mark Zuckerberg is struggling to make some profits from his foray into the metaverse. Zuckerberg, whose name is normally associated with Facebook is now the CEO of Meta.
On Wednesday, tech researchers told CNBC that sales of virtual reality (VR) headsets declined 2% year-over-year in 2022, the New York Post reported.
In early December, the research analytics firm NDP Group reported that sales of VR headsets generated just $1.1 billion, according to the Post report.
Also speaking to CNBC was Ben Arnold, NPD’s consumer electronics analyst, who said that sales of Meta’s $400-per-unit Quest 2 VR headset, which is considered the standard-setter in the market, also declined, though he did not say by how much, as was reported by the Post.
The Post also reported that according to the analytics firm CCS Insight, overall, there was a 12% drop in the number of global augmented reality (AR) and VR headset shipments compared to 2021. There were 9.6 million deliveries worldwide of headsets this year, the report added
Arnold also told CNBC, “VR had an amazing holiday in 2021. It was a great time last year to get one of these products, and VR totally crushed it.”
According to NPD Group, revenue generated from sales of VR headsets doubled last year from $530 million in 2020, as was reported by the Post who had sought comment from them and Meta.
The Post reported that Meta, the parent company of social media apps Facebook, Instagram, and WhatsApp, has pivoted from its traditional, bread-and-butter ad-based business model to the metaverse, which is powered by VR and AR technology.
CNBC reported that with the ad business mired in a slump, Zuckerberg has been looking to VR devices and related technology to pull Meta into the future.
Taken together, the estimates of VR headset sales and shipments create a problematic picture for Meta, whose stock price has lost about two-thirds of its value this year, CNBC reported. Zuckerberg has said he’s playing the long game with the metaverse, expecting it take up to a decade to go mainstream and projecting it will eventually host hundreds of billions of dollars in commerce, the report added.
The company has seen the value of its stock dip by more than 65% from the start of this year, the Post reported. On Wednesday, Meta’s stock price closed down 1.1%.
In late October, Meta announced a drop in revenue for the second consecutive quarter. In early November, it was reported that Meta fired 13 percent of its workforce, a total of around 11,000 employees, according to a report on the kotaku.com web site. This comes in the wake of the company having spent an extraordinary $15 billion on its “metaverse” project.
Confirmed in a post to Meta’s site in early November, Zuckerberg messaged his employees in a contrite tone. “Today I’m sharing some of the most difficult changes we’ve made in Meta’s history,” the billionaire CEO began, continuing, “I’ve decided to reduce the size of our team by about 13% and let more than 11,000 of our talented employees go.”
The Menlo Park, Calif.-based company earned $4.4 billion, or $1.64 per share, in the three-month period that ended on September 30th, the Post reported. That’s down 52% from $9.19 billion, or $3.22 per share, in the same period a year earlier.
Revenue fell 4% to $27.71 billion from $29.01 billion, slightly higher than the $27.4 billion that analysts had predicted, the Post report added.
The Post also reported that Zuckerberg, whose net worth was valued at $44.4 billion as of Wednesday, was worth a personal all-time high of $140 billion last year.
Meta will have its work cut out for it as other tech giants move into the metaverse in hopes of grabbing VR headset market share, the Post reported. Apple, Sony, Valve, and Hewlett Packard are either planning to unveil their own headsets or have already offered their products on the market.