If things continue the way they are, 2024 might be the last straw for the once-popular catchphrase in the business.
In late 2021, Facebook formally changed its name to Meta and announced that it would be concentrating on creating the Metaverse—basically, a 3D environment where your avatar could engage with people in novel and exciting ways. Naturally, accessing the metaverse would require a VR headset, which Meta also sells. As we all know, the metaverse has not taken off at all and, based on a recent survey of VR device sales, may never gain enough traction to materialize. Still, Meta is spending billions of dollars on the project even though it never did launch.
The industry research firm Circana provided the most recent sales figures for VR devices, which CNBC obtained. The figures show that sales of VR devices and alternate reality glasses fell 40% this year compared to last year, a sharp decline for the beleaguered devices considering that overall sales only fell 2% last year. In 2022, VR/AR was still a $1 billion market, but that is clearly no longer the case. Meanwhile, CNBC reports that Meta’s VR/AR business lost $3.7 billion in the third quarter of 2023 alone, with losses topping $25 billion since the company rebranded two years ago.
The absence of a compelling device and a killer app that everyone wants to use seem to be the main causes of the decline. Meta launched the Quest 3 in October of this year, while Sony debuted with the PSVR2. According to CNBC, sales of Meta’s most recent headset have increased by 42% over the same quarter last year, but sales of Sony’s most recent headset have not performed well. Meanwhile, Apple is set to launch its $3,500 Vision Pro headset in the near future.
With Apple entering the market, but not entering the metaverse with its device—it is meant to be used by an individual to enjoy content alone, not with other people in a networked environment—all these developments seem to point to 2024 as the make-or-break year for VR devices. This means that Meta will be primarily responsible for promoting the metaverse.
To be fair to Meta, the company has stated it expects the metaverse to take about 10 years to develop, so we should expect to see it fully realized by 2032 or so. However, shortly after CEO Mark Zuckerberg made those comments back in March, the company walked those comments back a bit by stating it was still focused on the metaverse but warned people it might take a while to materialize. Therefore, it is unclear where Meta’s focus is currently, as the rise of AI has muddled things a bit.
This week, the company also reaffirmed its commitment to emerging technologies, which it now sees as consisting of AI and the metaverse. The company’s chief technology officer and head of virtual operations, CTO, wrote that the company believes these two technologies will shape Meta’s future and that they have already started to intersect. The company’s new AI-powered glasses are one tangible example of this, as they come with an inbuilt AI assistant that can answer questions about the user’s environment.