{"id":332833,"date":"2025-12-05T22:37:13","date_gmt":"2025-12-05T22:37:13","guid":{"rendered":"https:\/\/www.newsbeep.com\/us\/332833\/"},"modified":"2025-12-05T22:37:13","modified_gmt":"2025-12-05T22:37:13","slug":"mark-zuckerberg-renamed-facebook-for-the-metaverse-4-years-and-70b-in-losses-later-hes-moving-on","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us\/332833\/","title":{"rendered":"Mark Zuckerberg renamed Facebook for the metaverse: 4 years and $70B in losses later, he\u2019s moving on"},"content":{"rendered":"

In 2021, Mark Zuckerberg recast<\/a> Facebook as Meta<\/a> and declared the metaverse\u2014a digital realm where people would work, socialize, and spend much of their lives\u2014the company\u2019s next great frontier. He framed it<\/a> as the \u201csuccessor to the mobile internet\u201d and said Meta would be \u201cmetaverse-first.\u201d<\/p>\n

The hype wasn\u2019t all him. Grayscale, the investment firm specializing in crypto, called<\/a> the metaverse a \u201ctrillion-dollar revenue opportunity.\u201d Barbados even opened up<\/a> an embassy in Decentraland<\/a>, one of the worlds in the metaverse.\u00a0<\/p>\n

Almost five years later, that bet has become one of the most expensive misadventures in tech. Meta\u2019s Reality Labs division has racked up more than $70 billion in losses since 2021, according to Bloomberg<\/a>, burning through cash on blocky virtual environments, glitchy<\/a> avatars, expensive<\/a> headsets, and a user base of approximately 38 <\/a>people as of 2022<\/a>.<\/p>\n

For many people, the problem is that the value proposition is unclear<\/a>; the metaverse simply doesn\u2019t yet deliver a must-have reason to ditch their phone or laptop. Despite years of investment, VR remains burdened by serious structural limitations, and for most users there\u2019s simply not enough compelling content beyond niche gaming.<\/p>\n

A 30% budget cut\u00a0<\/p>\n

Zuckerberg is now preparing to slash Reality Labs\u2019 budget by as much as 30%, Bloomberg said. The cuts\u2014which could translate to $4 billion to $6 billion in reduced spend\u2014would hit everything from the Horizon Worlds virtual platform to the Quest hardware unit. Layoffs could come as early as January, though final decisions haven\u2019t been made, according to Bloomberg.\u00a0<\/p>\n

The move follows a strategy meeting last month at Zuckerberg\u2019s Hawaii compound,<\/a> where he reviewed Meta\u2019s 2026 budget and asked executives to find 10% cuts across the board, the report said. Reality Labs was told to go deeper. Competition in the broader VR market simply never took off the way Meta expected, one person said<\/a>. The result: a division long viewed as a money sink is finally being reined in.<\/p>\n

Wall Street cheered. Meta\u2019s stock jumped more than 4% Thursday on the news, adding roughly $69 billion in market value.<\/p>\n

\u201cSmart move, just late,\u201d Craig Huber of Huber Research told Reuters<\/a>. Investors have been complaining for years that the metaverse effort was an expensive distraction, one that drained resources without producing meaningful revenue.<\/p>\n

Metaverse out, AI in<\/p>\n

Meta didn\u2019t immediately respond to Fortune\u2019srequest for comment, but it insists it isn\u2019t killing the metaverse outright. A spokesperson told the South China Morning Post<\/a> that the company is \u201cshifting some investment from metaverse toward AI glasses and wearables,\u201d point\u00ading to momentum behind its Ray-Ban smart glasses, which Zuckerberg says have tripled in sales<\/a> over the past year.<\/p>\n

But there\u2019s no avoiding the reality: AI is the new obsession, and the new money pit.<\/p>\n

Meta expects to spend around $72 billion on AI this year, nearly matching everything it has lost on the metaverse since 2021. That includes massive outlays for data centers, model development, and new hardware. Investors are much more excited about AI burn than metaverse burn, but even they want clarity on how much Meta will ultimately be spending\u2014and for how long.<\/p>\n

Across tech, companies are evaluating anything that isn\u2019t directly tied to AI. Apple<\/a> is revamping<\/a> its leadership structure, partially around AI concerns. Microsoft<\/a> is rethinking the \u201ceconomics of AI.\u201d Amazon<\/a>, Google<\/a>, and Microsoft are pouring billions<\/a> into cloud infrastructure to keep up with demand. Signs point to money-losing initiatives without a clear AI angle being on the chopping block, with Meta as a dramatic example. <\/p>\n

On the company\u2019s most recent earnings call, executives didn\u2019t use the word \u201cmetaverse\u201d once<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"In 2021, Mark Zuckerberg recast Facebook as Meta and declared the metaverse\u2014a digital realm where people would work,…\n","protected":false},"author":2,"featured_media":332834,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[27],"tags":[28,5311,2075,12424,1282,75966,179,39254],"class_list":["post-332833","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-business","tag-cloud-computing","tag-hardware","tag-mark-zuckerberg","tag-meta","tag-metaverse","tag-virtual-reality","tag-virtual-reality-headset"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/332833","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=332833"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/332833\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/332834"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=332833"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=332833"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=332833"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}