Meta's Reality Labs loses record $4.65B ahead of Apple's Vision Pro launch
cnbc.com
cnbc.com
Nothing is a lie here, but clearly the headlines convey certain ideals to people and those might not really match reality. And it seems like they're just playing the field, writing positively and negatively framed articles to appeal to whichever audience wants what. Why can I not just get one self contained coherent article that's something like "Meta shares surge despite major losses ahead of Apple's Vision Pro launch"? (or the reverse order). These are clearly aimed to be shared on social media and generate particular sentiment to those that only read headlines. Boy is the news a confusing mess.
It's actually probably true that:
- Apple's stock is slightly down today.
- Facebook's stock is way up today.
- Facebook netted -4.65B on VR.
- Apple's Vision Pro launched today.
Maybe it's from growing up on the internet, but my confusion starts when people expect The Media to be a monolith and project one consistent emotional vibe, and when they don't, to add _more_ confusion and start claiming that the news is being selected to drive a particular sentiment...even though their initial observation was there is no one singular comfortable bite-sized truth that wraps up VRs long-term story, today.
The complaints of this thread is that there are very conflicting facts and they don't feel the article (and other articles) is giving a fair representation of the overall picture, and rather feels like it's pandering to people who want to hear it framed in a particular way.
I think it's charitable, but unwarranted, to claim they're implying they'd like more editorialization and a quick winner/losers narrative. They seem to indicate negative feelings towards that.
It does seem as simple as they see 2 headlines and 2 stock symbols in some kind of tension that implies editorialization and an unsustainable situation for everyone.
[^1] It's not FACEBOOK VR SHOCKER: LOSERS TAKE $5 BIL LOSS WHILE APPLE RELEASES VISION PRO TO UNIVERSAL ACCLAIM! (fb up 20% apple down 8%)
It's 4 separate things, without value judgements implied or attached. (literally 2 stock ticker symbols, and these 2 headlines detached from eachother: FB lost $5B in Mixed Reality division in last fiscal year, Apple Vision Pro released today).
The news headline is comparing two complementary business and so is valid.
> "Meta shares surge despite major losses ahead of Apple's Vision Pro launch"
This would have been a click bait as it is trying to relate independent events.
My statement is really about sentiment
You just said it!
First of all, engagement optimization is as old as the printing press.
...But the difference now is thay is that news targets algorithms, not eyeballs and reputation.
But it also makes it easy to spam shit like this where you just write 5 articles with different sentiment and send it out. It can even be an online system, optimizing headlines for higher "engagement". But engagement is a proxy and I think we need to start actively acknowledging that the metric has been long hacked and at this point abused.
It will not be, as long as it is the internet gatekeepers' livlihood.
Note: I'm no fan of Meta's products and I've blocked FB/Meta domains for over a decade.
If Meta was sticking to their core money generating businesses, then they'd be accused of stagnating and failing to innovate.
There is currently a bit of content problem : no enough gamer with headsets to attract spendings so no enough games to attracts gamers, so not enough gamers with headsets ...
But I went again on vr game development some months ago and the technical progress are really sweet and major downside are being removed.
The article keeps framing it as "The metaverse division" and "sink billions of dollars a quarter into developing the metaverse"... but Reality Labs (basically Oculus) doesn't just do stupid metaverse/horizon-blah, they make the actual Quest. So I expect a decent chunk of this was the cost of developing their two recent hardware upgrades. I believe they may be back to selling at or below cost again, so part of that loss could also be a strategic loss for future market share.
If more of it actually went into the metaverse nonsense then that's truly abominable, but the article presents no evidence for this. It seems like all of the media still doesn't realise the Quest is primarily a gaming platform and horizon is just a stupid side project Zuckerberg has forced upon them, to everyone who actually uses them this framing just seems ridiculous.
-- EDIT --
Thank you tomxor for entertaining a possible answer.
Does anyone really know how these tax write-offs work? People just use the term without any clear understanding.
Meta like any sane company out there will probably use every rule to avoid (not evade) paying tax. Thats good for the shareholders. But this isn't one such measure, it's mostly R&D expenditure.
RL has been burning money for a few years and similar rates, and this just happens to be the highest one at the moment. Q4 seems to always stand out as the largest loss each year. (According to the "Quarterly losses for Meta's Reality Labs" chart in the article).
I'd love to know internally what Apple and Meta would call a hit. Meta has shipped something like 25 million headsets now. That sounds like a hit to me. That's on the same scale as the Atari 2600.
But to add at cutting age we underestimate cost of failed attempts. Calculating design/dev cost of final successful product misses all the designs and code that never made it to production.
I can't help but think of how this cash could have been spent on something that benefited everyone (in the dire covid/postcovid years no less) rather than the world's most expensive trial on whether people would rather meet in a MMO world than with their web cameras in a meeting app.
Makes Star Citizen's $0.7B crowdfunding look cheap.
Imagine if people in the 1940s/50s said, "wow we could have spent all this money on something besides these giant vacuum tube machines that just add up a few numbers."
For instance, just imagine wearing a set of AR goggles while <working on your car/building some furniture/whatever> and having an exploded parts diagram available at your beck and call in relation to the physical item in front of you, with assembly/disassembly steps shown should you so desire.
I can think of dozens of real world applications off the top of my head. AR assistance for challenging professional situations (surgery, mechanical repairs, etc), PTSD treatment, AR warfare, gaming, and so much more. And this is with our limited viewpoint in the year 2024.
When headsets (or the evolution of them) are eventually the size of reading glasses and cost very little, this could change the world.
I don't "believe" there is a solution until enough people get really hungry.
Although I do agree with your general sentiment.
I also how simple we like to make the argument. How we could have instead spent money that “benefited everyone”. Who decides that? I don’t think governments, nonprofits, or other gatherings of people do a better job and probably are actually much worse at it.
Now there are data centers full of them.
It's the dirtiest kind of money.
Solve the management boogie man of remote collaboration, unlock Billions in value by making remote workforces more collaborative.
Hell, would that also have downstream affects of reducing housing demand in HCOL areas and alleviating homelessness…maybe!?
> Sales of VR and AR headsets and glasses dropped almost 40% in 2023 to $664 million in 2023, as of Nov. 25, according to research firm Circana. An analyst at Circana told CNBC that the steep drop was likely due to a lack of new stand-alone VR headsets.
You can read that either way though... sales are dropping, but maybe only because there wasn't anything new, so maybe they'll rebound.
Beyond that, it's speculation. Meta is throwing money at the idea, and expects to throw even more at the idea.
> “We expect operating losses to increase meaningfully year-over-year due to our ongoing product development efforts in augmented reality/virtual reality and our investments to further scale our ecosystem,” the company said in its earnings statement.
But neither can know for sure what the Total Addressable Market is because it's not yet a wholly mainstream area of consumerism. They're both hoping it becomes the next internet/cloud/music player/smartphone/wearable/app store/etc. type of play and they have a foothold and a head start that makes the investment worthwhile.