Text / VR gyro Linde
"Dumping money and robbing users" is a label that meta has been accompanied with since the release of quest products. Relying on its financial strength, meta reduced the cost of VR all-in-one machine as low as possible and entered the VR market with great strides with price advantage. Since its release, meta quest has been singing all the way, and its market share has reached a new high. Meta Quest 2 launched in 2020 has become the representative player of the "king of cost performance" with the highest popularity today.
Zuckerberg once said that he invested more than $10 billion a year. Although the Q1 financial report this year showed that VR / AR related businesses increased by 35% year-on-year, the loss still reached $3 billion and the cost increased by 55%.
Although not yet profitable, Zuckerberg himself said at the 2022 Q1 quarterly earnings conference that meta will continue to transfuse blood to the relevant business reality labs to realize the long-term vision. However, this long-term vision will not gain anything until at least 2030-2040, and finally realize the value of "leading today's mobile platform".
Will meta have insufficient stamina for this long time line? Behind the heroic words, meta seems full of confidence, but it is in danger.
Social media is the main business of meta. From the entertainment software on the university campus to the social media with the highest number of users in the world, Zuckerberg once sat firmly on the throne of the social empire. For meta, only the stability of social empire can support Zuckerberg's vision of metauniverse.
But with the changing pattern of social media, Zuckerberg's social empire is already crumbling.
（1） Changes in social media pattern, social empire of "water" data
Although Facebook is still the social platform with the largest number of users, according to an internal study in 2021, nearly half of Facebook's new user accounts are created by old users, and the study points out that meta may underestimate the actual size of duplicate accounts.
Little friends who have used Facebook know that facebook accounts are often "censored" accidentally, resulting in inaccessibility. Most users can only choose to create new accounts, which will also lead to the growth of Facebook users. And internal research shows that Facebook and instagram, another social platform, intend to open multiple accounts as a strategy to promote the company's growth, which is simply "water data".
In addition, a more serious problem affecting the growth of meta's social Empire users is the decline in the proportion of young users. This phenomenon appears not only in Facebook, but also on instagram, which focuses on young users.
At the same time, the rise of short video makes more and more young users spend more time on short video social platforms. Tiktok, a dark horse, strongly "copied" Facebook's success in a shorter time. This has a strong impact on meta, which mainly focuses on text and pictures. The short board of graphic sharing also puts meta at a disadvantage in the e-commerce competition.
Source: marketing interactive
With the blessing of doubling annual growth, explosive traffic and the rise of live delivery, the layout of byte beating on tiktok is not only a fresher, more fun and more vivid social platform, but also created tiktok stores to benchmark Facebook and Ig stores, seizing a large number of e-commerce users, so as to improve the closed loop of byte on the digital content platform. An Internet giant more in line with the needs of the times is rising.
On the other hand, meta's social platform, even if it's late to add short video play in Ig, it's difficult to match tiktok's influence. After imitating ar filter and "burn after reading" play, it still hasn't retained more young users.
User trend of overseas social media software in 2021 (source: Marketing charts)
According to a complaint document provided by Frances Haugen, a former employee of meta, to the U.S. Securities and Exchange Commission, Facebook's daily users are expected to decline by 4% and 45% among young people aged 20-30 and teenagers aged 13-19 by 2023.
Under the squeeze of social media such as twitter, snapchat and tiktok, and the decline of meta's reputation due to antitrust, privacy disclosure and other lawsuits, the growth space of meta's social Empire has become a bottleneck. In addition to the reduction of user traffic, the privacy policies of apple and Google have also brought a strong blow to meta.
According to the financial report of meta in Q1 this year, although the total revenue increased by 7% year-on-year, this data is the lowest growth rate since meta's listing in 2012. In terms of operating profit margin, meta's performance is also declining, and meta's net income has been declining for two consecutive quarters.
Meta's user growth seems to be in a state of falling after reaching the highest value of the curve. The social empire is threatened and the advertising business is hit. Zuckerberg eagerly seized an opportunity to rekindle the heat - "metauniverse". However
（2） Yuancosmos business caused investor dissatisfaction
In the case of poor financial performance, "the information" released the news that meta will release four new head displays by 2024, and a head display project Cambria with a price of more than $800 will be released first in September this year. In addition, there are two Quest series products.
In two years, there are four products, and AR head display is not included. Meta's path in the meta universe can be described as "Crazy".
Although Quest 2 was successful before, so far, the business of meta metauniverse has not been profitable. When the main business began to decline and the meta universe business could not see flowers and fruits, such a fast product update frequency, or the behavior of opening the b-end and C-end markets at the same time, meant that the investment in R & D needed to be higher than in the past few years, but the benefits were not necessarily as Zuckerberg wanted.
Comparison of meta financial reports, the business of yuanuniverse continues to suffer losses (source: meta)
Therefore, meta's investors have always held "reservations" in the meta universe business. In December last year, meta investors submitted a proposal on assessing the potential risks and negative effects of emerging technologies in the meta universe. In April this year, the securities and Exchange Commission (SEC) ruled that meta must give investors the opportunity to consider and vote on whether to adopt the "meta universe strategy".
Previously, the negative effects of Zuckerberg's personal remarks, influence and lawsuit entanglement in the media made meta shareholders dissatisfied. Since 2017, Zuckerberg has been forced to resign almost every year. As for the adoption of the proposal of "meta universe strategy", shareholders' dissatisfaction with Zuckerberg is becoming more and more obvious. Even if Zuckerberg wants to grasp the straw of meta universe, he has to slow down.
At the earnings conference, Zuckerberg said that he would slow down the investment in AI infrastructure, business platform and meta universe business. In this way, the launch of four products in two years may not be realized, and Zuckerberg's vision of metauniverse will slow down.
After opening the C-end market through quest, in addition to meta, more and more manufacturers see the potential of the C-end market and have related businesses with the injection universe. In the hardware market, the shock event in the industry is the acquisition of Pico by byte in the first half of this year. In addition, apple, the most watched technology giant, also reported that it would release high-end head display next year, PSVR 2 (nearly 8 million PS VR sales) officially released this year, and Tencent's acquisition of black shark technology began to start VR hardware
The door of the consumer VR market is opening, which also means that the current market competition pattern will become more intense due to the influx of capital.
Moreover, from the perspective of the maturity of the whole VR technology, consumer VR has not made much technological breakthrough in the short term. Although Quest 2 is well-known for its cost performance, the reduction in cost also leads to the fact that Quest 2 is not as good as the new products launched by some large manufacturers in terms of wearing comfort. Although the advantages of meta are still great at present, the advantages of meta's cost performance are gradually weakened under the condition that other manufacturers continue to push through the old and bring forth the new.
Therefore, meta's meeting also showed that meta will no longer focus on the consumer VR head display with high cost performance as a differentiated label, but enter the industrial head display and high-end head display.
However, meta may not have enough b-end consumers to pay for the high-end head display that jumps from $299 to more than $800.
When the VR head display market showed signs in 2016, it was mostly applied to the b-end industry. After a trough, the VR market made a comeback. After a round of cruel elimination, the strength of the remaining enterprises should not be underestimated. In the field of medium and high-end head display, there have always been valve index, HTC, Xiaopai and other brands loved by senior players overseas.
There were many powerful brands before, and then there was the news that technology giant Apple was about to release XR high-end head display, which aroused consumers' expectations. How much can meta have left in the market cake?
In addition, the content construction of VR ecology is one of the most critical links. Entertainment and games are the main direction of C-end content, while the current situation of entertainment ecological content in VR market is not optimistic. Unlike mobile games and PC games, which have huge user groups, VR games have relatively higher entry threshold, relatively less considerable cash income, and various difficulties in technical experience, resulting in a talent gap for VR game developers.
There is only one new tour in the platinum list (source: steam)
Although meta has implemented some incentive plans for developers and is constantly improving technical problems such as interaction, it seems that the effect is very little. The games of babang are still early released products, such as beat saber, Arizona sunshine, superhot, half-life: Alex and other "old games".
In addition to externally encouraging more people to participate in the construction of ecological content, meta is also vigorously developing Horizon Series software, hoping to create a social meta universe, including horizon workrooms focusing on business scenes, benchmarking video conferencing software, horizon ventures focusing on movie viewing, horizon worlds and horizon home focusing on social networking.
However, Horizon Series software is still in the stage of insufficient perfection, the response is flat, and has not aroused too much spray.
In the social field closely arranged by meta, there are not only strong products such as vrchat and recoom, but also Pico acquired by byte in China, which hired Ma Jiesi, the former head of Xiaomi VR business, as the head of Pico social. Whether in the competition of social media platform or meta universe business, byte beating is a strong competitor of meta.
Back to reality, the system content can't keep up, the lack of game developers, the small user base and the cumbersome equipment all make meta's road in the universe more difficult than Zuckerberg's ambitious idea that it will eventually replace laptops as office equipment in the future.
No matter which business, meta seems to have encountered a bottleneck. Entering the meta universe was once regarded as Zuckerberg's backwater battle in the slowdown of business and the shrinkage of market value. The high popularity of the meta universe is also fueled by Zuckerberg.
However, at this stage, the meta universe is still in a very early stage, and it still needs long-term infrastructure and time to implement it. It is still unknown whether meta under domestic and foreign troubles and various shocks can put all its eggs in one basket and win the first place in this market, but it can be predicted that meta's meta universe road will not be too smooth.