The 'Metaverse' is faltering and the company is now considering cutting up to 30% of the division. Meta has also postponed its next two headsets, according to reports.
In 2021, Facebook founder Mark Zuckerberg renamed his company Meta and introduced the 'Metaverse', a virtual world that, according to Zuckerberg, could host nearly anything.
The Metaverse has not been a success and Meta has reportedly lost over $70 billion on the venture in the past 4 years alone. The company's VR push started in 2014 with the acquisition of Oculus.
Massive cuts planned in Reality Labs
The Metaverse strategy has centered on the company's Quest headsets, which with low-resolution LCD panels, weak processors, a cluttered interface and the absence of great media content beyond games, have failed to impress buyers.
Also read: First look at Apple Vision Pro: A video revolution
The challenges are now leading to a massive round of budget cuts starting in January, with up to 30% of the budget potentially being cut, primarily in the Metaverse and Quest divisions, according to independent reports from Bloomberg and Business Insider.
META QUEST 3S (LEFT) AND META QUEST 3 (RIGHT) are not selling in expected quantities despite price dumpingTwo next headsets delayed
In two leaked internal memos obtained by Business Insider, Meta's Maher Saba announced that the company's next two headsets are being postponed.
One headset, codenamed 'Phoenix' (formerly 'Puffin'), is designed as a competitor to Apple Vision Pro. Rumors indicate this headset will feature OLED instead of outdated LCD panels. The Information has previously reported, however, that the headset will still have lower resolution and significantly weaker processors than Apple's. 'Phoenix' is now expected in 2027 according to the memo.
The other upcoming headset is a 'Quest 4', expected in 2027 or 2028.
Meta Quest faces new competition from Apple Vision Pro and Samsung Galaxy XR with Android XR. Both feature micro-OLED displays, offering much higher immersion and picture quality. Next year, Valve will launch its Steam Frame headset with LCD panels.
Also read: Apple Vision Pro vs. Samsung Galaxy XR vs. Meta Quest 3
Apple's visionOS and Google's Android XR both offer 3D movies. Meta does not, partly due to weak hardware which lacks support for MV-HEVC video decoding.
- Source: Business Insider (2), Bloomberg
