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Meta's "Horizon Worlds" project under pressure

Last night, Oct 26, Meta unveiled its Q3 report.

By Finst News
• 3 min read

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Last night, October 26, Meta released its third-quarter report. The figures were disappointing. Revenue fell 4% year over year to $27.7 billion. This is the second straight quarter with a revenue decline for Meta. The company's net income was also lower than before. Net income in the last quarter was just under $4.4 billion — a 52% drop from a year earlier. Due to the weak results, Meta's stock fell 19%.

Higher costs

The drop in revenue sits right alongside significantly higher costs. In total, Meta spent a little over $22 billion in Q3 — up 19% from a year ago. Almost a fifth ($3.62 billion) was spent on developing "Horizon Worlds". All told, the internal prestige project Metaverse has already gobbled up $9.4 billion this year and is likely to soon exceed the $10 billion annual budget. Additionally, Meta CFO David Wehner expects another "significant increase" in operating loss in 2023.

Metaverse, so far a flop

So far, the huge spending isn’t justified by Zuckerberg’s Metaverse. As the Wall Street Journal reports, a large share of users lose interest after the first month in the digital world. Estimates put current users at just under 200,000 in Meta's Metaverse — a fraction of the 3.5 billion users Meta has on its social media platform. Other Metaverse projects like Decentraland are also dealing with massive user losses.

Even for its own employees, the fun factor in Horizon Worlds seems limited. According to trade publication The Verge, Meta reportedly told its staff to spend more time in its own Metaverse. According to Oculus founder Palmer Luckey, who sold the VR company to Meta in 2014, the Metaverse project so far looks "terrible".

All in all, Mark Zuckerberg's prestigious project is far from successful. Zuckerberg sees the future of the internet in VR and is going all in on the "Metaverse" play. Meta's own Metaverse is still in its infancy and burns far more money than it yields. In the coming years, it will become clear whether Zuckerberg's multi-billion push toward Web 3.0 is a genius move or a utopia.

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