Meta recently released its financial report for the third quarter of 2022.
In Q3 2022, Meta's main business revenue was US$27.714 billion, a year-on-year decrease of 4%; main business expenditure reached US$22.05 billion, a year-on-year increase of 19%; operating profit was US$5.665 billion, a year-on-year decrease of 46%, and profit margin fell from 36% to 20% year-on-year; net income was US$4.395 billion, a year-on-year decrease of 52%; diluted earnings per share was US$1.64, a decline of 49%.
For businesses whose main revenue comes from advertising, this financial report shows that Meta is in a difficult time. Although the financial report data released by Google and Snap earlier are also bad, Meta's situation is actually worse - competition from Tiktok and increasing regulatory pressure.
In addition, Zuckerberg's attention and investment in the metaverse and his neglect of the decline in social media business have also aroused dissatisfaction among investors. As for Reality Labs, its operating income in Q3 2022 was US$285 million, a year-on-year decrease of 48.92%, and its losses were as high as US$3.672 billion. In addition, in the first nine months of 2022 alone, Reality Labs' total loss reached US$9.438 billion, which is close to the total loss of US$10.19 billion for the whole year of 2021.
On Monday, Altimeter Capital CEO Brad Gerstner issued an open letter to Zuckerberg and Meta's board of directors requesting Meta to reduce Reality Labs-related losses and focus on its core profitable business.
Regarding investors' doubts, Zuckerberg said on a quarterly earnings call with investors and journalists: "I know a lot of people may not agree with this investment, but I think Meta should focus on areas that I think are crucial for the future, and that's the right thing to do."
"I think we are doing some of the most historical work. If you look back decades later, people will realize the importance of these things we are doing now," Zuckerberg said. He also admitted in the earnings call that the metaverse social media platform Horizon Worlds is still an early product and is still a long way from finally becoming "what we desire."
is obvious, Zuckerberg's pursuit of the metaverse will not slow down because of the opposition of several investors. Meta Chief Financial Officer David Wehner said in a press release announcing the company's third-quarter earnings on Wednesday: "We do expect Reality Labs' operating losses in 2023 to increase significantly year-on-year." In order to alleviate investors' dissatisfaction, Zuckerberg also tried to appease some investors in the earnings call recall: "I think those who are patient and work with us will eventually get a return."
but Wall Street did not buy Zuckerberg's orders. After the 2022Q3 financial report was released, Meta's stock price also fell 20% from $129.82 at the end of the market, to $104.30 in after-hours trading, falling more than 2/3 from the highest point of $353.83 in the past 52 weeks.
In addition, Meta's VR business will also usher in competition from several strong competitors next year - PICO, PSVR 2 and Apple MR glasses. After being acquired by ByteDance, PICO is vigorously developing overseas markets, and has achieved a good reputation in the European market through PICO 4 and PICO 4 Enterprise, and even a situation of supply and demand imbalance. On the social and hardware level, ByteDance and PICO are the biggest challenge facing Meta since the acquisition of Oculus, especially in the meta-universe social field.
, which is expected to be launched in early 2023, PSVR 2, with its excellent gaming ecosystem, excellent visual effects and excellent feel, has a strong attraction to gamers when it already has a sufficient base of PS5 users. In the past, with its strong investment in the content ecosystem, Meta Quest 2 has a deeper moat compared to other VR platforms, but facing , Sony , the powerful console game ecosystem, mature IP and experienced development team behind it, it will also bear the pressure that has not appeared in the past.
As for Apple MR glasses, everyone’s expectations for it is whether it can replicate the glory of iPhone 3GS and “redefine VR all-in-one”.From chips to whole machines, from operating systems to content ecosystems, Apple has no shortcoming. Looking at the way this world's most successful consumer electronics company defines VR all-in-one machines, it may bring more ideas to the entire industry.
However, Meta is not without its last resort. The Quest Pro, the newly released high-end VR all-in-one machine, adopts Pancake optical solution, supports color perspective function, and provides many new features such as keyboard recognition for office scenes. The new handle equipped with a pressure sensor also brings more imagination space. In addition, Meta also confirmed on the earnings call that it will launch the new consumer VR all-in-one Quest 3 in 2023.
Overall, although Meta's financial performance in Q3 2022 did not meet investors' expectations, Zuckerberg's investment in VR and the metaverse at huge risks is still a commendable new exploration. At least for now, the concept of the metaverse has become popular worldwide, and in a sense, Zuckerberg and Meta have achieved phased victory.
The turbulence of the VR consumer market in 2023 is already brewing. It is really impatient to use what kind of products will the parties involved in this competition use to impact the consumer market.
Reference:
https://www.businesssider.com/facebooks-identity-crisis-metaverse-costing-zuckerberg-billions-historic-facebook-earnings-2022-10
https://www.businesssider.com/mark-zuckerberg-historic-metaverse-investment-disagree-investors-facebook-e arnings-2022-10
https://www.forbes.com/sites/charliefink/2022/10/26/investors-flee-meta-after-earnings/?sh=14c41a726e81
https://investor.fb.com/investor-events/event-details/2022/Q3-2022-Earnings/default.aspx
"93913 original content, please indicate the source for reprinting"
