Meta is investing billions of dollars each quarter in pursuit of CEO Mark Zuckerberg’s futuristic vision of a virtual world known as the metaverse. However, the virtual reality market is experiencing a decline, which raises challenges for the company.
According to data provided by research firm Circana to CNBC, sales of VR headsets and augmented reality glasses in the U.S. have plunged almost 40% to $664 million in 2023 as of November 25. This decline is much more significant than the 2% slide in sales last year, which amounted to $1.1 billion for AR and VR devices.
This downward trend over the past two years highlights the difficulty Meta faces in transitioning immersive technology from a niche gaming sector to mainstream adoption. Although Zuckerberg acknowledged that it would likely take a decade to reach a billion users when Meta was announced in late 2021, the company may need to show more positive data to satisfy shareholders who have expressed concerns about its substantial and risky investments.
So far, Meta has not achieved a breakthrough success or developed a “killer app” that validates Zuckerberg’s visionary metaverse concept. Meta’s Reality Labs division, responsible for the development of VR and AR technologies, reported a loss of $3.7 billion in the third quarter, despite generating sales of $210 million. Since the beginning of 2022, shortly after the company was renamed, this division has accumulated losses of approximately $25 billion.
Source (CNBC)
