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Facebook metaverse investment mocked after Zuckerberg avatar selfie dud

By Daniela Ešnerová

11:00, 19 August 2022

Avatar of Mark Zuckerberg from Horizon Worlds
Some commentators likened Facebook’s metaverse graphics to that of games from the early 2000s. – Photo: Facebook

Facebook/Meta Platforms (META) became a target of mockery online after its boss Mark Zuckerberg shared his avatar from the company’s metaverse platform, and people were not impressed. 

The screenshot from META's immersive social experience Horizon Worlds, which revealed a rather plain graphic, had people questioning whether the hefty investments that the tech giant has been piling into the metaverse development, is paying off.

Last October, Zuckerberg publicly took it upon himself and his company to take the world to “a time when basically immersive digital worlds [would] become the primary way that we live our lives and spend our time,” and spent $10bn on this goal. 

Meta Platforms Inc. (META) price chart

At the time Facebook rebranded as Meta Platforms, signaling the company's commitment to the metaverse.

Last month, Meta's virtual reality division, Reality Labs, launched in 2019, posted a £2.8bn loss for Q2 2022, following a nearly $3bn loss in the previous quarter.

The figures had Needham entertainment and internet analyst, Laura Martin, worried that the rate at which the tech giant's costs grow will greatly outpace META's revenue growth in the coming years.

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Martin downgraded her rating for the tech giant from “buy” to “sell”.

“We lower our estimates because we believe cost growth will far exceed revenue growth for the next two years,” she reasoned, adding that the company's metaverse investment concerned her.

Brian White, an analyst at Monness, Crespi & Hardt, believed in more long-term prospects of META's metaverse efforts. Still, he cautioned that the firm will likely feel the pains of the macroeconomic environment in the more immediate term. White lowered the price estimate for the social media giant ahead of the latest earnings report but maintained a “buy” rating for the company.

“We believe Meta will continue to benefit from the long-term digital ad trend, participate in accelerated digital transformation, innovate in the metaverse, and repurchase stock at a generous pace; however, the economy appears to be on the brink of a recession, regulatory headwinds persist, equity markets are in turmoil, and we expect the geopolitical landscape will grow more treacherous,” he wrote.

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