December 5, 2021

SEO, Wordpress Support & Insurance, Mortgage, Loans, Legal, Etc Blogs

SEO, Wordpress Support & Insurance, Mortgage, Loans, Legal, Etc Blogs

, SEO, Wordpress Support & Insurance, Mortgage, Loans, Legal, Etc Blogs

Facebook Expects Metaverse Project Will Cost At Least $10 Billion—In 2021 Alone

Share This :
, SEO, Wordpress Support & Insurance, Mortgage, Loans, Legal, Etc Blogs
, SEO, Wordpress Support & Insurance, Mortgage, Loans, Legal, Etc Blogs
, SEO, Wordpress Support & Insurance, Mortgage, Loans, Legal, Etc Blogs

Mark Zuckerberg’s got the metaverse on his mind—and it’s a costly consideration.

Facebook offered new financial insight on Monday into how much this digital world will cost to construct: at least $10 billion just this year alone, according to a new forecast on profit and expenses Facebook offered up to investors in its third-quarter earnings report. And that $10 billion figure, Zuckerberg told analysts in a conference call, will only likely increase in the years to come.

To Zuckerberg, the metaverse, a bleeding-edge Silicon Valley concept positing that future social networks will rely on augmented- and virtualy-reality tech, represents a path away from his company’s existing problems: Facebook may be bigger than ever with over 3 billion users worldwide. But its popularity among young people has eroded over the last decade, and increasing anti-trust attention around Facebook will make it difficult for the company to simply buy any upstart newcomer within its industry (as it did with Instagram and considered doing with TikTok and Snapchat). As a result, Facebook must figure out how to build a new service itself that will help lure back young users.

Zuckerberg acknowledged Facebook’s struggle to maintain popularity with this demographic in that conference call. “We’re retooling our tools to make young adults our northstar,” Zuckerberg said. In that same moment, he acknowledged this would come as the expense of aging users, a problematic base of support for Facebook—too old and too prone to sharing the misinformation that has landed the company in boiling-hot water.

The price tag is a new revelation, but Facebook has already been quite public about its metaverse ambitions. Zuckerberg may tie those hopes even more directly to his company and is reportedly mulling a name change to Facebook Inc. to reflect the new focus on the metaverse, a rebirth that could be announced at Thursday’s Connect conference. Facebook already offers several VR headsets through the Occulus brand it bought back in 2014 and has introduced an invite-only beta version of a platform called Horizon Worlds, which it hopes will attract users eager to design virtual worlds and items for the metaverse.

“If you’re in the metaverse, you’ll need digital clothes and digital tools and different expeirncs,” Zuckerberg told analysts. “Our goal is to help the metaverse to reach a billion people and billions of dollars in commerce in the next decade.” Yet establishing “this foundational platform will be a long road,” Zuckerberg warned, instructing Wall Street to expect Reality Labs to lose money for years to come.

MORE FOR YOU

Next, Facebook plans to change its financial reporting structure, moving the internal team leading its metaverse projects, Reality Labs, into a standalone unit. This serves a dual purpose: If the metaverse comes to fruition, the seperately reported financials will give investors a clear sense of its growth along the way. If it doesn’t, Facebook will retain the opportunity to show that its app business—Facebook, WhatsApp, Instagram—remains profitable. Keeping the two together would make it a little harder for Facebook, which would need to consistently explain the make-up of the combined figures to investors—lest investors mistake unprofitability in the VR team for new weakness in Instagram or Facebook’s business.

Zuckerberg has assigned a top Facebook executive to run this: Andrew Bosworth, a longtime Zuckerberg friend who previously built many of Facebook’s signature features, like the NewsFeed. In his role commanding Reality Labs, Bosworth is currently a vice president and will next year ascend to chief technology officer.

The metaverse has attracted attention from more than Facebook and been a long time coming. (Sci-fi author Neal Stephenson coined the term back in 1992.) Fundamentally, VR technology has proven hard to commercialize. Occulus developed its first VR headsets over a decade ago. But the first versions produced after the Facebook acquisition were expensive, clunky and devoid of any popular apps. Competitors like Samsung and Google have tried their hands too, focusing their headsets around smartphones that weren’t powerful to produce a fully immersive experience. The Florida-based startup Magic Leap has raised $4 billion over nine years while managing to ship only one iteration of its headset, which flopped. And while Facebook has now filed close to 1,500 AR- and VR-related patents, Samsung, Microsoft and Sony have filed nearly 2,000 such patents each.

With Facebook netting around $30 billion in profit to fund the metaverse push, Zuckerberg seems undettered. “We believe that the metaverse to be the successor to the mobile internet. We think it’s going to unlock a massively larger creative economy than what exists today,” he said Monday, erecting “an important pillar of our company over the next decade.” A pillar he may also feel he has no choice but to try and build.

Share This :