Is a Functional Metaverse Still Years Away?

On Wednesday 29th of October, Facebook (Meta) posted its numbers regarding Q3.

While the revenue was more or less on par with analysts’ predictions ($27.71 billion), the revenue in the Reality Labs unit, the company’s #metaverse business, did not perform as well.

Reality Labs has fallen by almost half?from the previous year, to $285 million.

Meta’s Reality Labs unit had an operating loss of $3.67 billion in Q3, compared with a loss of $2.63 billion a year earlier.

To mitigate the catastrophic results, the?report tried to reassure investors:

“Reality Labs expenses are included in our total expense guidance. We do anticipate that Reality Labs operating losses in 2023 will grow significantly year-over-year.

Beyond 2023, we expect to pace Reality Labs investments such that we can achieve our goal of growing overall company operating income in the long run”.

But what is actually happening?

Wasn’t the metaverse supposed to be the driving force of the?web3 revolution?

And what actually constitutes a metaverse, seeing that there are several different and often contrasting definitions of it?

Amazon Studios CEO Matthew Ball has described it aptly as

“an expansive network of persistent, real-time rendered 3D worlds and simulations that […] can be experienced synchronously by an effectively unlimited number of users, each with an individual sense of presence”.

In a?July 2022 survey?conducted by McKinsey & Co., the results were very much reassuring, implying that metaverses could constitute more than a glorified new version of Second Life, and could provide new lifelines for businesses.

The survey noted how?$13 billion were poured as venture capital and private equity funding, and that in 2022 already, investment into the metaverse space, is more than double what it was in all of 2021, that is more than $120 billion.

The estimated value of the metaverse could reach, according to experts,?a peak of $5 trillion?by 2030.

So the questions that arise are two, and they’re very simple.

Why do investors believe in a venture that is losing them billions of dollars?

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