If there’s one thing your investors hate to hear it’s that your profits are down. Another thing they’re not too keen on is when you say that you’re going to carry on ploughing billions into a nebulous concept with no immediate profits in sight.
“Hey wait, come back…”
That’s the double-helping of bitter pills that Meta dished out in its latest quarterly earnings call yesterday as it announced profits of $7.5 billion for the latest quarter, down 21 percent from a year earlier.
This comes on the back of a financial report from February warning of the falling profits and slowing user growth which caused Meta stock to drop 26% as its market value dropped $230billion in a day. And the previous quarter results which was Meta’s (Facebook’s) first quarterly profits drop (so that’s two in a row, folks).
Plus Russian bans on Facebook and Instagram continue to hit the company squarely in the pocket. Plus this year’s scrapped developer conference…
Things can only get Meta
Still there’s light at the end of the tunnel as Mark Zuckerberg promised that massive metaverse spending would continue as “We remain confident in the long-term opportunities and growth that our product road map will unlock,” he said.
In a sense it’s commendable that Meta are being so proactive in their pivot – seeking to actively do something about increasing user apathy and competition from rivals such as TikTok – but increasingly Meta, and their love of all things metaverse, is looking like a no go for those wanting to make a fast Zuck Buck.
OK. Metaverse. We get it. So when?
It’s estimated that we may have to wait until the late part of the decade until Meta’s costly expansions in VR, retail venues and innovations pay off. If ever. Focusing in on just one of the expanding Meta metaverse arms, their Reality Labs division, which makes the Quest VR headset and future AR gear, employs about 17,000 staff and was single-handedly responsible for losing $3 billion last quarter. Not a good look.
The first glimmers of a metaverse payday are on the way however, as development of their Horizon social media platform (currently only in Quest headsets) for the desktop continues with Meta already banking on grabbing a sizey share of creator’s profits.
They can’t come soon enough.