Meta plans “big announcement” and Metaverse statement

Meta plans “big announcement” and Metaverse statement

Meta needs to tell the Metaverse story in a way that investors believe. Next week, the company is expected to lay the groundwork internally.

February 3, 2022, was truly a black Thursday for Meta CEO Mark Zuckerberg: the stock price plummeted by around 25 percent after worse than expected results for the fourth quarter of 2021.

Those who were betting on an exaggeration and quick recovery were disappointed in the following days. On the contrary: the share price is currently – in an overall difficult market environment – continuing to fall.

Too many risks: Meta loses value

Meta’s loss in value has to do with several things. On the one hand, the core social media business is threatening to stagnate, such as user growth on Facebook. Meta forecasts revenue growth of only three to eleven percent for the first quarter of 2022 – Facebook has never grown more slowly.

Now, one could justifiably note that Meta’s social universe is still growing and billions of users are active in it. That is correct.

But the network effect works both ways. Facebook could collapse just as quickly as it has grown. What’s more, the particularly open-minded, active and creative users who are especially valuable to platforms like Facebook are usually the first to arrive – but also the first to leave.

Other threats include competition from TikTok, which cuts into Instagram usage time in particular, and Apple’s tracking thumbscrews, which are costing Meta billions and require extensive rebuilding of the advertising system.

It doesn’t help that Meta is being watched, scrutinized, and criticized by the public and regulators like no other big tech company. The FTC, for example, wants to sue Instagram and WhatsApp out of Meta’s social portfolio and already has its sights set on the future strategy of virtual reality.

Meta’s metaverse strategy – more question marks than exclamation points

It doesn’t help much that Meta CEO Mark Zuckerberg proclaimed a Metaverse strategy last summer that leaves more question marks than exclamation points. Such as the claim that the Metaverse will run on many platforms and be created by numerous companies.

What benefit would Zuckerberg get from running Horizon Worlds on an iPhone? It would not improve his group’s strategically difficult situation of being dependent on big-tech competition.

No, Zuckerberg’s goal since acquiring Oculus in 2014 has been to take the lead in a new computing paradigm with VR and AR glasses, gaining end-to-end control over hardware and software, and finally escaping the smartphone ecosystems of Google and Apple.

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The metaverse is also historically clearly defined as an immersive 3D world in which people meet as avatars, and which only unfolds its full potential through VR and AR. Meta’s current Metaverse environment, Horizon Worlds, is also designed accordingly and will be continuously expanded. Meta’s Metaverse presentation in October 2021 revolved almost exclusively around these aspects and digital 3D worlds.

Ein Avatar spielt Klavier während die Zuschauer applaudieren.

In Meta’s Horizon Worlds, people are to meet each other wearing VR goggles and as avatars. Second Life comparisons are inevitable. So far, Meta has not been able to convey how its own Metaverse vision differs from previous digital world attempts – or why the time is now ripe. | Image: Meta

But it’s hard to convey that “3rd Life” will break through into the mainstream in 2022 just because you can put on tech goggles this time. It’s entirely possible that things will look very different in five, ten, or 15 years. But Zuckerberg has so far failed to convey this story credibly. How could he?

The influential US business magazine Bloomberg, for example, headlines: “Companies Are Spending Billions on a Metaverse That Makes No Sense”. In this article, the well-known U.S. games journalist Jason Schreier delivers a scathing verdict on Zuckerberg’s Metaverse vision.

“Facebook captured the attention of about a quarter of the planet by offering a smart solution to a difficult problem — staying connected. But now, it’s trying to create a solution to a problem that doesn’t exist. When tech executives like Zuckerberg preach the metaverse, they are promising visions that either already exist, are ill-defined or that nobody actually wants.”

The fact that Meta is already dealing with reports of digital-physical harassment in Horizon Worlds is not exactly helping a rosy future story.

Meta plans “big announcement” on Metaverse

All of these negative developments are reflected in Meta’s enterprise value, which is currently collapsing unopposed. It looks like investors were just waiting for Meta’s growth story to finally be told so they can invest their profits from the strong last few years elsewhere more wisely.

In view of this latest development, Meta urgently needs strategic clarity – and it is wise to create this within its own ranks first: The website The Information reports that Meta is inviting the entire workforce to an internal meeting next Tuesday. The topic will be the Metaverse strategy and how it is to be implemented in concrete terms.

Rendering von Metas Mixed-Reality-Brille Project Cambria

Meta’s Metaverse strategy depends heavily on the success of tech glasses such as Cambria – even if Meta CEO Mark Zuckerberg has not yet stated this in such unambiguous terms. | Image: Meta

According to an internal post by Justin Osofsky, Instagram’s chief operating officer, the meeting is expected to discuss products and culture. One of The Information’s two internal sources also reports that a “big announcement” will take place at the meeting.

Even though a lot is playing against Meta at the moment: The group is still earning billions despite slower growth and has all the resources for an epic turnaround. Perhaps the next pair of tech glasses, Cambria, already has the potential to underscore Zuckerberg’s new corporate vision – to become the Apple of the mixed reality age.

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