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Meta is preparing to cut its metaverse budget by up to 30%, signaling a significant strategic shift. Three years after virtual reality became the company’s top priority, investments are now being redirected to artificial intelligence and augmented reality. This is a significant change of course for Mark Zuckerberg, who is questioning the future of the metaverse and has immediately boosted Meta’s stock price.
According to sources, Meta’s likely decision reflects a general market fatigue with virtual spaces. The Horizon Worlds platform failed to achieve mass adoption, and the company’s VR headset is not selling as well as expected.
Since its high-profile rebranding in 2021, Meta’s Metaverse projects have been generating multibillion-dollar quarterly losses, and analysts and investors are increasingly criticizing these expenses.
Despite this, the company’s other areas, including AI initiatives and smart glasses, appear much more promising. Investors are wondering whether Meta can balance high expenses with real demand.
Some of the funds freed up from VR will be directed to another division of Reality Labs, responsible for the development of AR glasses. Mark Zuckerberg confirmed this commitment in a Threads post, stating, “We are entering a new era where glasses and other AI-powered devices will change the way we interact with technology and each other.” He also announced the opening of a new creative studio within Reality Labs, focused on design, fashion, and technology.
