The Meta had a tough year.
In 2022, the company’s share price fell to an all-time low. fired 11,000 employees, and faced intense skepticism from eager investors about the feasibility of his futuristic metaverse vision. But that won’t convince the tech giant to change its plans.
In a memo to Meta employees, also posted on social media, one of Meta’s top executives, CTO Andrew “Boz” Bosworth, spoke on Monday about the difficult moment the company is in. He signaled that the company would double down on its plans. to create new AR/VR technologies, including those that support the Metaverse, which is a series of immersive 3D virtual worlds where people can interact, work and play using their digital avatars.
“We never thought it would be easy or simple, but this year has been even harder than we expected,” Bosworth wrote. “Economic woes around the world, combined with pressure on Meta’s core business, have created the perfect storm of skepticism about the investments we’re making. These are moments that really test people’s faith in the future.”
Bosworth’s memo showed why employees — and the public — should have faith in the company’s $10 billion a year investment in developing new technologies like AR/VR, eye-tracking, and graphics processing.
“This post is my attempt at clarity,” Bosworth said in an interview with Recode last week, addressing critics who feel Meta is spending too much on new technology that hasn’t caught on as much as social media yet. . “There was a very poor understanding of the business and the fact that 80 percent of the investments we make are investments in the core business. And if you ask the average person, isn’t it smart for a company to invest some percentage, maybe even 20 percent, in its future?”
Meta CEO Mark Zuckerberg believes that the metaverse will be the next iteration of the Internet, a technological shift similar to the mobile phone. But even in the best-case scenario, it will take time for Zuckerberg to achieve that vision—he estimates that so far 10 years. Meanwhile, some investors have become wary. One recently named Meta continued spending on this “terrible” in a recent open letter urging the company to cut costs.
In his memo, Boz objected to Meta giving in to such market pressure.
“During boom times, it is easy to make large and ambitious investments in what comes next. But when economic conditions change, it’s just as easy to turn the other way: cut back on your ambitions, stick to what’s safest and most profitable today, and squeeze the most out of it,” Bosworth wrote.
The executive argued that there are “disastrous consequences for this kind of short-term thinking,” saying that it leads to “devastated companies that have long since abandoned innovation, content to simply crank the existing business until it stops working.” ”
Bosworth’s comments come at a time when Silicon Valley is long overdue for a major breakthrough. It has been years since any of the leading tech giants—Apple, Google, or Meta—released technology as transformative as their earlier products, such as the mobile phone, online search engine, personal computer, or social media platform. networks such as Facebook. . For the past year and a half, Meta has positioned itself as a potential leader on this front.
And while Apple and other tech giants are also investing in AR/VR technology, Zuckerberg is in the unique position of being the only major CTO left who is also the founder of the company, with board control and substantial immunity from firing. He also released several iterations of AR/VR headsets before Apple released even one product in the field, which gave Meta a head start in development.
But Meta still needs to keep making money by growing its core business: selling social media ads. The company is still recovering from a major hit to the ad business after Apple launched the iPhone App Tracking Transparency Tool, which limited Meta’s ability to target ads – the company predicted it would happen. lose 10 billion dollars because of these changes only in 2022. This year, Facebook also reported its first drop in worldwide users in the last quarter of 2021 as it faces increasing competition from TikTok. For some, this is a signal that the platform is losing relevance, especially among younger users and in developed countries such as the US. Bosworth claimed in his memo that his critics “misunderstood” some of the trends here. He noted that Facebook activity is growing in the third quarter of 2022, and that Meta’s WhatsApp is growing the most in North America compared to other regions.
Bosworth also provided some insight into what Meta plans to focus on in the future in its AR/VR efforts.
This year’s Meta released a $1,500 “mixed reality” headset called the Quest Pro. Mixed reality means that instead of being completely immersed in a virtual environment, you can see virtual reality projected onto your surroundings. Quest Pro is designed for business clients such as architects, fashion designers and other professionals who use 3D modeling in their work.
Meta’s older and more affordable Quest 2 VR headsets are more popular with mainstream consumers (they are the leading consumer VR headsets), but the technology still holds a niche compared to the scale of Meta’s Facebook or Instagram. For comparison, Meta has sold about 14.8 million. According to analytics firm IDC, Quest 2 headsets have been around since launch, while Facebook is almost 3 billion monthly active users.
This is largely due to the fact that virtual reality products are bulky and difficult to wear on the face for more than a few hours at a time. And while they’re fun for gaming and virtual hangouts, they’re not as essential technology as a laptop or phone.
Meta hopes that more people will eventually use AR/VR products as they become lighter and more technologically sophisticated.
“It won’t be long before a VR headset can emulate a powerful home computer setup from a device that fits in a backpack and can be used anywhere,” Bosworth wrote.
While Meta’s AR/VR ambitions are bold, it has at times found it difficult to sell part of its vision to the public and even to some of its employees. Metaverse’s flagship social platform, Horizon Worlds, was underutilized by its own employees, in part because it was too buggy. as reported by The Verge in October. Virtual reality industry titan John Carmack, who used to be an executive VR consultant for Meta, left the company on Friday, saying in a now public farewell note that while he believed in potential of Meta VR products from Meta, he questioned the effectiveness of the company in their creation. Outside of the VR world, many commentators on social media have criticized the look of Meta’s virtual avatars in its AR/VR products – screenshot by Mark Zuckerberg. the avatar was widely ridiculed on Twitter and other platforms for being legless and cartoony (in response, CTO showed an updated avatar one week later).
Bosworth told Recode that the company does have a “real problem” with getting people to understand the value of Metaverse products when they’re not wearing a VR headset and getting the full experience, but instead seeing a flat 2D screenshot. mobile phone or computer. He said his teams are working on improving the technical systems that power the avatars to make them more “reliable.”
But ultimately, avatars are only a small part of how Meta spends its $10 billion annual budget on the futuristic technology that makes up its Reality Labs division. The company is investing about half of its Reality Labs budget in AR, Bosworth said, including developing new hardware devices. Bosworth said that over time, Meta hopes to prove its critics wrong by building products that people actually use.
“The way this device becomes more widespread makes it more valuable to more people.” he said. “And that’s what we’re trying to do.”