During Meta’s quarterly earnings conference call on Wednesday, CEO Mark Zuckerberg reiterated that the company’s focus remains on both artificial intelligence and the metaverse. He addressed recent headlines suggesting that Meta was shifting its focus from the metaverse to AI and clarified that the company has been working on both for years and will continue to do so.
“A narrative has developed that we’re somehow moving away from focusing on the metaverse division. So I just want to say upfront that that’s not accurate,” Zuckerberg said. “We’ve been focusing on both AI and the metaverse for years now, and we will continue to focus on both.”
Zuckerberg also introduced a new term, AI agents, which he believes will be valuable and meaningful to people in various capacities, including Facebook users, creators and businesses.
The 38-year-old executive explained that these agents will be integrated into apps like WhatsApp and Messenger, handling customer support similar to chatbots but with the added feature of having bodies and shapes in the virtual world.
Despite criticism from investors and former board members, Meta’s stock surged 12 percent in extended trading on Wednesday following its better-than-expected first-quarter financial results and plans to reduce operating expenses. Zuckerberg has promised that 2023 will be the “year of efficiency,” as Meta has already laid off 10,000 employees.
Meta has faced scrutiny over its metaverse efforts, but Zuckerberg is optimistic that the AI agents will change the game. The CEO pointed out that Meta has made significant investments in avatars over the years, making it possible to embody these agents in the virtual world. With the introduction of AI agents, Meta is doubling down on its commitment to both AI and the metaverse.
Meta’s costly long-term investment on Reality Labs
Meta, formerly known as Facebook, has been investing billions in its metaverse technology for the last 16 months. However, some investors have urged the company to reduce its spending on the metaverse since the market demand for this technology remains uncertain.
Meta’s recent earnings report indicates that the company has not yet generated any profits from its Reality Labs division and anticipates that losses will escalate in 2023. The report highlights that Reality Labs earned $339 million in revenue during the first quarter of 2023, which is lower than half of the revenue generated in the previous quarter and the corresponding period of the previous year.
During the January-March period, the Reality Labs division of Meta suffered a loss of $3.99 billion, marginally less than the losses it incurred in the preceding quarter. However, this loss has increased by 35 percent compared to the same period last year.
During the recent call, Zuckerberg highlighted some milestones for Reality Labs. He said that users have created over 1 billion avatars, although how many were created solely in the metaverse is unclear.
According to the reports, Meta has sold 20 million Quest headsets that serve as a requirement to access Horizon Worlds, the company’s metaverse platform. Additionally, over 50 percent of users of Quest headsets who access the metaverse daily spend at least an hour utilizing the technology.
Despite these accomplishments, the company has reportedly struggled to keep users engaged in recent months, with Horizon Worlds having 200,000 monthly active users and an 11 percent retention rate. However, Zuckerberg pointed out that the number of titles in the Quest store generating revenue of at least $25 million has doubled since the previous year.
Meta will release a new mixed and virtual reality headset later this year, following its most recent Quest headset in October.
