Meta to spend 20% of its budget on metaverse development in 2023

December 20, 2022  15:17

Meta Platforms (Facebook's parent company) will allocate about 20% of its spending next year to fund Reality Labs, which is developing augmented and virtual reality solutions, including the Metaverse, according to Andrew Bosworth, CTO of Meta.

According to Bloomberg, 18 percent of Meta's spending in the third quarter of this year was related to Reality Labs funding. This means that the bulk of the company's investments will continue to be focused on the development of the company's other applications: Facebook, Instagram, WhatsApp and Messenger.

The source notes that Meta's share price is down nearly 65 percent in 2022. Against this backdrop, some experts argue that CEO Mark Zuckerberg's decision to invest heavily in a project as expensive and almost a failure as metaverse is unreasonable. It was the Horizon Worlds game developed by Reality Labs that forced Musk to cut investments in other projects, as well as cut staff. In the first nine months of this year, Reality Labs reported losses of $9.4 billion, while Meta's other apps (Facebook, Instagram, WhatsApp, Messenger) brought the company about $32 billion in the same period.

“Economic challenges across the world, combined with pressures on Meta’s core business, created a perfect storm of skepticism about the investments we’re making,” Bosworth explained, adding that the plan for 2022 was a tougher year than expected. However, he noted that abandoning promising projects for short-term goals could have disastrous consequences.

Is Horizon Worlds a failure?

Horizon Worlds, which Andrew Bosworth probably has in mind when talking about future projects, doesn't really live up to the hype because it isn't of much interest to users, even the company's employees hardly ever visit Horizon Worlds.

Meta was originally planned until 2022, eventually the number of active users of Horizon Worlds reached 500,000 per day, but later it had to lower the mark to 280,000. However, even that number of users is not taking advantage of the project. According to the Wall Street Journal, the number of monthly active users of Horizon Worlds does not reach 200,000 people.

According to internal statistics, only 9 percent of the metaverse worlds had at least 50 visitors per day. And most of the remaining worlds have been empty since creation because they are uninteresting. In addition, most Horizon Worlds users abandon the app after the first month of use. The problem is that Horizon Worlds still doesn't have the monetization option that users would like, there are few interesting worlds. Many also complain about the appearance of the avatars and especially the lack of legs, although they promised to solve this problem.

Another problem is that in order to enjoy Horizon Worlds, users need to have virtual reality glasses such as Meta Quest. For one thing, not everyone can afford them. In addition, it seems that users are not very interested in these devices, as the demand for them is also decreasing: more than 50% of customers stop using them after six months.

With all these problems and the huge losses the project has suffered, the company continues to believe that the future belongs to the meta-universe. Analysts at Info-Tech Research Group believe so too, and in a recent analysis they too included the meta-universe in their list of trending technologies of the near future

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