2022 was not an easy year for Meta, the parent company of Facebook, which had to lay off 11,000 employees, or 13% of its workforce. In addition to the fact that the latest financial results were disappointing, the group is also singled out because of the billions of dollars it is spending to develop metaverses, as well as its future augmented reality and virtual reality helmets and glasses.
In the third quarter alone, the development of metaverses and these AR/VR products cost Meta $3.7 billion. And in the first three months of 2022, those investments cost a total of $9.4 billion. However, for the moment, the revenues generated by this activity (Meta Reality Labs) were only 285 million dollars during the third quarter.
Meta insists and pays to spend billions
Despite the criticism, Meta intends to continue investing in its Reality Labs business. This was pointed out by Andrew Bosworth, the head of this division of Meta, in a recent blog post. In essence, despite all this criticism, Meta continues to “believe in the future”. And for the group, the future is augmented reality glasses.
“Our beliefs here are supported by a few factors that we believe are misunderstood by many of our biggest skeptics. As we reported in our October third quarter results, daily active users on Facebook were at an all-time high, with positive engagement trends. Instagram account over 2 billion monthly assets, while WhatsApp has 2 billion daily assets”argument from the head of Meta Reality Labs.
In the third quarter, 80% of Meta’s investments went to its main products, those that generate more revenue in the short term. And 20% of those investments were for the Reality Labs division. For Andrew Bosworth, these are normal proportions, for a company that sees the long term. It also reveals that half of these investments from which Reality Labs benefits is dedicated to the development of augmented reality.
A question of survival?
And while suggesting that Meta will therefore agree to invest billions of dollars in these long-term projects, the group will also warn that these will take a long time to materialize. “Our vision of true AR glasses will require years of progress to make our devices thinner, lighter, faster and more powerful, while consuming far less battery power and generating far less heat”said Andrew Bosworth.
But these investments are necessary, according to him. And abandoning the Reality Labs projects, because of the macroeconomic context, or the criticisms, would be a mistake. Andrew Bosworth evokes the case of “crowded out companies” which have given up on innovating, and which have contented themselves with putting on existing activities, until these activities no longer work. In other words, Meta suggests that it’s about his survival.
While waiting for augmented reality glasses, Meta is already marketing the Quest Pro headset, which combines augmented reality and virtual reality. The group is also preparing to present a successor to the Meta Quest 2 (its most popular helmet) in 2023.
