Mark Zuckerberg, chief executive officer of Meta Platforms Inc., demonstrates the Meta Quest Pro during the virtual Meta Connect event in New York, US, on Tuesday, Oct. 11, 2022.
Michael Nagle | Bloomberg | Getty Images
In an interview published Tuesday with The Verge, Zuckerberg said VR, the technology he bet his entire $340 billion company on a year ago, is entering “the trough of disillusionment.” That’s a term folks in the tech industry like to use when excitement around a new technology drastically wanes.
His comments effectively place expectations for the success of the new Meta Quest Pro, which goes on sale Oct. 25, at next to zero. At the same time, Zuckerberg reiterated his belief that the metaverse will be the next iteration of computing after the smartphone — it’s just going to take a long time. Specifically, he told The Verge “it’s not going to be until later this decade” when metaverse gadgets like the Quest Pro will be “fully mature.”
But Meta isn’t selling headsets later this decade. It’s selling them now, and expecting technologists and software developers to invent compelling reasons to buy one.
That was the biggest takeaway from Meta’s event Tuesday — not the hardware and what it can do, but the lack of compelling software and use cases to make you feel like you need to run out and buy one. If this was supposed to be Meta’s “iPhone moment,” it failed to deliver.
And keep in mind, this is all happening as Meta’s primary business through the Facebook and Instagram apps, face crushing headwinds. Users are leaving Facebook. Reels, Meta’s TikTok competitor, has struggled to make money from ads amid poor engagement, as The Wall Street Journal reported last week. Apple’s recent privacy updates made it more difficult for Meta to target ads to iPhone users. The stock is down a whopping 60% so far this year.
Meanwhile, Meta is losing at least $10 billion a year trying to force the metaverse into existence as Zuckerberg himself warns of waning interest in the concept.
Yes, it’s possible Zuckerberg will be proven right at the end of the decade or some time in the 2030s. But it’s 2022, and the company has plenty of contemporary issues to manage before then.
In a note to Meta investors Wednesday morning, Needham analysts praised Zuckerberg’s risky ambition for the metaverse, but also noted the importance of assessing where the business is today.
“Our job is to make stock calls,” the Needham analysts said, later adding, “We admire Mark Zuckerberg’s commitment to a vision in the face of overwhelming odds. Meta is willing to make big bets that may change the world for 2 billion consumers, or create an epic fail.”