Amid rising costs and a tightening economy, Meta has announced some significant changes to its product roadmap, with several of its hardware projects put on hold or delayed for the time being.
According to various reports, Meta is:
The changes significantly alter Meta’s ongoing plans, which also include developing retail stores as part of a broader push into consumer tech products, diversifying beyond its social platform roots.
Meta also recently scaled back its social audio developments, while several other projects are under review.
The company has been looking to cut costs while focusing on building its metaverse-aligned initiatives, while also dealing with the compounding impacts of Apple’s new data privacy changes. Last year, Meta noted that Apple’s new ATT updates, which prompt users to turn data tracking on or off, will likely cost it around $10 billion in lost ad dollars in 2022 alone. Meta also reported a loss. operating $10 billion in its Reality Labs division for fiscal 2021.
The announcements, logically, scared the market and caused Meta’s shares to plummet, from which they have not yet recovered. This latest update to the product roadmap is part of Meta’s broader plans to maintain balance through expected economic uncertainty, while also noting job losses and delays in several divisions.
And it’s not the only social platform in this boat. Last month, Snapchat issued an earnings warning, with its Q2 unlikely to return to the targets it had communicated just a month earlier, due to ‘a macroeconomic environment that has deteriorated faster and faster than expected‘. Twitter is terminating job offers and cleaning up its executive ranks, while ByteDance, the owner of TikTok, lost $100 billion in market value over the past year.
Increasing regulation, slowing spending and broader economic pressures are making it that much harder for tech platforms to make big bets, causing all of them to pull back on their efforts to expand and evolve into new areas.
Meta, of course, has already made this a key focus, and is eager to continue its path into the metaverse, through further adoption of VR headsets and other aligned tools.
As such, it’s not completely cutting off your hardware development.
As Meta CTO Andrew Bosworth noted:
We are going to ship wrist wearable devices and AR glasses that will bring entirely new technology, like EMG, to market. The path to innovative products is not a straight line. As is common in our industry, we iterate on multiple prototypes in parallel, changing resources as we learn.
—Boz (@boztank) June 9, 2022
So while we may not be getting a Meta Watch any time soon, Meta is still working on a wrist control device for VR, which will broaden its metaverse focus, while also continuing to invest in new metaverse-related technology. Like this week’s announcement. of a new partnership with game creation platform Crayta.
Meta CEO Mark Zuckerberg has said he feels “a responsibility” to invest in changing the metaverse, so it’s unlikely Meta will move away from that focus entirely anytime soon. But these latest announcements signal an upcoming period of pain for the sector, which likely means the second quarter earnings period won’t be much fun for most.
What will that mean for ongoing development and upcoming changes in the space? It’s impossible to say, but with increasing pressure from shareholders, accelerated revenue measures tend to emerge, which could be good, in terms of providing new ad options and reach, while it could also be bad, as it includes more ads in the sources and it has an impact on the user experience. .
Meta is well aware of these impacts and as such is less likely to generate a new flood of ads (although Instagram users have anecdotally noticed more ads in their feeds lately). But clearly, the squeeze is definitely underway, and that could lead to a number of changes as the rigs adjust to a bumpy road through the second half of the year.