In recent weeks, Mark Zuckerberg’s Metaverse fell in overall market value by $655 billion.
The unexpected decrease in earnings happened after two straight periods of stable results that gave investors a clear picture of slowing growth. Much of this sentiment is bolstered by Apple enforcing new privacy standards that affect Meta’s revenues from advertisements on Facebook.
Protecting the privacy of users has been a complex issue in recent years. Bradley’s Department of Finance chairman Stephen Kerr pointed out how this issue impacts Metaverse and how it can affect customer acceptance.
“They have to address the problem,” Kerr said. “It’s the legislation in front of Congress right that will determine it…Is Facebook responsible for misinformation…or are they just the provider for people? That’s a big question to answer. If social media companies don’t answer that, Congress will answer it for them.”
With its main source of revenue threatened and TikTok further putting more pressure on them, perhaps Meta does need a miracle to save them. Yet, this new information regarding the Metaverse project only casts it as an albatross hanging on the company’s neck.
Zuckerberg has invested around $36 billion into the project with plans to invest billions more into it.
Additionally, Kerr addressed concerns about the future of Meta and how it helps to see what caused this huge decrease in value.
“What changes a stock’s price is stockholders’ expectations of future cash flow,” Kerr said. “One of the two reasons it’s dropping off so rapidly is people are saying they are betting the shop on this and there’s no evidence of customer acceptance.”
Even the main product, a virtual or augmented reality headset used to access the Metaverse is far from being an all-encompassing device. To give Meta credit, its buyout of Oculus has given it a majority share of the virtual reality niche. Meta ships 70 percent of all headsets, including 11.5 million Oculus Quest 2 headsets in a single year, nearly doubling the minuscule market’s size.
However, the overall number of headsets in the market is comparable to a single video game console’s lifetime sales of 50-100 million consoles, hardly justifying the amount being invested into the Metaverse.
Weighing these different factors paints an uncertain future for the company all because of a fixation on the future payout on a speculative market.
