Mark Zuckerberg’s rebranding of his company as Meta and commitment to the development of the metaverse has yet to yield successful results.
Sales of VR headsets in the US have declined. The decline in headset sales has led to concerns about the future of the metaverse.
Decline in VR Headset Sales and Meta’s Stock Price
It has been over a year since Mark Zuckerberg made the decision to change the name of his company to Meta and commit billions of dollars towards the development of the metaverse.
However, the success of this venture remains uncertain as the sales of virtual reality headsets in the United States have not lived up to expectations.
In fact, sales of VR headsets in the United States actually decreased by 2% in the past year, reaching a total of $1.1 billion by early December, according to data from NPD Group.
This is a far cry from the revenue generated by Facebook’s advertising business, which makes approximately the same amount every three days.
Over a year after changing his company’s name to @Meta and committing to spend billions of dollars developing the metaverse, Mark Zuckerberg’s bet on virtual reality is no closer to paying off. @JonathanVanian https://t.co/8ELIJN5kHC
— Ted Kemp (@TedKempCNBC) December 29, 2022
As the ad industry struggles, Zuckerberg has been looking at Virtual Reality gadgets and similar technology to secure a successful future for Meta.
However, recent data from CCS Insight shows that shipments of augmented reality devices and VR headsets have decreased by over 12% year every year to 9.6 million in 2022.
These disappointing sales figures, combined with the decline in Meta’s stock price by two-thirds this year, paint a concerning picture for the company.
Despite this, Zuckerberg remains optimistic about the potential for the metaverse, stating it could take up to a decade to become mainstream and predicting it will eventually facilitate hundreds of billions of dollars in commerce.
Multiple tech companies, including venture firms, made significant investments in the past decade with the hope of creating a virtual world for education, fitness, sports, and work.
VR Market Faces Challenges in 2022
Ben Arnold, an analyst at NPD, remarked VR had a fantastic holiday season in 2021. He attributed the success of VR devices during this time to various promotions that increased their sales, especially given the shortage of gaming consoles like the PlayStation 5.
Arnold added it was a great opportunity to purchase one of these products last year and VR really took advantage of it.
Data from NPD reveals that VR headset revenue in the United States doubled in 2021, reaching approximately $530 million, up from the previous year. However, the lower sales and shipments seen in 2022 can be attributed to a combination of factors.
Most tweeted articles today in AR, VR, MR:
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— TechontheEdge (@Tech_on_Edge) December 29, 2022
According to a report from CCS Insight, the VR market is expected to have another slow year, due to economic challenges and inflation.
CCS Insight analyst Leo Gebbie, noted consumer budgets are expected to be tight in the coming year, which may lead to a decrease in extra purchases, such as VR headsets.