Meta’s No Good Very Bad Week

Meta delivered another disappointing earnings report Wednesday. Profits have decreased due to an industry-wide decline in the ad market due to recession fears, the continuing impact of Apple’s privacy changes, competition from Tik Tok, and a $2.8 B loss on XR. Profits slid from $10.4B last year to $6.7B. That’s a really big difference. The stock immediately dropped 14 another points. Meta’s value is 60% off last year’s peak. The day did not start well, either.

Earlier in the day, the US Justice Department sued to block Meta’s acquisition of exercise app Supernatural. On Monday, Meta announced it was raising the price of both Quest 2 models by $100 (~25%). With around 10 M units in the hands of consumers, Meta doesn’t need to underwrite the cost of the headset anymore. Meta also added an 18 and up tag in Horizon Worlds. Meta has a real kid management problem on Horizon. I can’t see how this will fix it. Kids mixing with random adults in the virtual world is going to have horrible consequences in the real. There was also a report this week that an updated VR headset from Pico, which is now owned by TikTok, is coming to the US later this year. Right before all this bad news dropped like dung from a parading elephant, the NY Times published a rather flattering look at the Zuckerberg of the moment, “Operating With Increased Intensity: Zuckerberg Leads Meta Into Next Phase.” It’s a slightly breathless account of how the bold 38 year old CEO is trying to disrupt his own company.

To put things in historic perspective, there’s this gem from the Twitter.

UK-based Condense raised $4.5 million to live stream volumetric captured content through a real time game engine. The round was led by LocalGlobe, 7percent Ventures, and Deeptech Labs. Also participating were angels including Tom Blomfield (ex Monzo founder), Grace Ladoja MBE and Ian Hogarth (former Songkick founder).

Yuga Labs’ Otherside Tests 4500 Simultaneous Uniques Yuga’s challenge of maintaining a community of NFT holders throughout the development of the Otherside title during what many fear could be a historic crypto winter nested inside a recession is a certain level of daunting. “There will be lots of metaverses … A lot of the other metaverses out there, I think the most interesting question will be: Are they open? Or are they closed?” Yuga CEO Nicole Muniz asks in an interview with TechCrunch. “Do you own yourself in this world? I think that’s the first question. Like, do you own you?”

Troubled Play to Earn Unicorn Axie-Infinite changing business model Vietnam-based Sky Mavis, once valued at $3B, raised hundreds of millions from some of the top names in the venture capital business (Andressen Horowitz, Accel, Animoca Brands, and Mark Cuban) to build the Pokemon Go of web3. But, after the crypto crash, the value of in-game currency SLP dropped from $0.34 to less than half a penny. Users dropped from 2.7 M to 760,000. Sky Mavis is making a hard pivot into a more familiar games business model: in-app purchases.

A new report from PWC reveals 67% of consumers have never heard of metaverse, and aren’t interested in it. PWC questioned both business executives and consumers about the putative metaverse. The top 6 things consumers say they want from the metaverse:

1. Explore new places virtually – 65%
2. Interact with health providers – 58%
3. Interact with customer service agents – 53%
4. Interact with familiar brands – 53%
5. Attend courses/training – 52%
6. Play video games – 52%

These are all selected answers to multiple choice questions PWC made up. Surely no one would have spontaneously answered that they want to interact with customer service agents. LOL. As Henry Ford famously said, “if you asked people what they want they would have said ‘faster horses.’”

This Week in XR is also a podcast hosted by the author of this column and Ted Schilowitz, Head of Future Technologies at Paramount Global. This week our guest is Marcie Jastrow, who is head of the Shiba Inu Metaverse. You can find us on Spotify, iTunes, and YouTube.

What We’re Reading

The Default Tech Settings You Should Turn Off Right Away (Brian X. Chen/NY Times)

Ready or not, the Glassholes are coming back (Sean Hollister/The Verge)