In a conversation with investors and analysts on the occasion of the latest quarterly figures, Mark Zuckerberg explains his vision for the Metaverse and promises everyone involved a long journey.
Facebook’s business and user base continue to grow despite controversies and issues around privacy, hate speech and misinformation. This also applies to the second quarter of 2021.
Year-over-year, revenue grew 56% to $29 billion, and profits doubled to more than $10 billion. The number of daily active users increased by around 30 million to 1.91 billion users in the second quarter of 2021. Facebook has 2.9 billion monthly users, 50 million more than the previous quarter .
Oculus Quest 2: sales are falling
Other sales, that is, revenue outside of the advertising business, which comes primarily from sales of the Oculus Quest 2 (test), was US$497 million in the second quarter, which corresponds to a growth of 36% compared to the previous year.
However, those sales fell 32% and 44%, respectively, from the previous two quarters. For example, sales of the Oculus Quest 2 slowed in the second quarter due to seasonal factors, according to Facebook chief financial officer Dave Wehner. Losses from the recent face cushion recall are also included in sales.
Mark Zuckerberg points out that the range of VR content and experiences is diversifying beyond games. The most popular quest apps are social in nature, which confirms the thesis that virtual reality is a social platform. Other areas where the technology is now finding significant applications include entertainment, work, creativity and fitness.
Facebook’s new vision is the Metaverse
The investor call focused on Facebook’s new business vision: the Metaverse. Zuckerberg announced the realignment in an interview last week, and recently a first reorganization took place with the announcement of a dedicated Metaverse department.
According to the founder of Facebook, the company is investing in three areas: the creator community, e-commerce and the next computing platform, namely AR and VR. here are the Building Blocks of the Future of the Internet and Facebook’s Future Vision.
The Metaverse is the successor to the Internet, which you not only look at, but in which you are embodied. Access is possible on a wide variety of devices and immersion levels: from apps and smartphones to PCs and VR and AR glasses. The defining quality of the metaverse is presence, that is, the feeling of being physically present with other people.
“Creation, avatars and digital objects will play a central role in the way we express ourselves and this will lead to completely new economic experiences and possibilities,” says Zuckerberg. “In many ways, the Metaverse is the ultimate expression of social technology.”
The Metaverse Business Model: Digital Goods
Zuckerberg expects hundreds of millions of people to use the Metaverse before Facebook turns it into something that’s going to be “a very big and important part of Facebook’s business.” What is the business model? Advertising is likely to become an important part of the metaverse, along with online commerce, says Zuckerberg.
What would become “huge” are digital assets and creators. “In the long term, it will be very great digital economy and that’s where we want to go above all, ”explains the boss of Facebook, who at the same time distances himself from the business model of Apple without naming the company. Facebook’s goal is not to sell hardware with high margins. Devices should be made as affordable as possible so that as many people as possible can participate in the metaverse.
However, there is still a lot of work to do before this vision can be implemented. The metaverse that Facebook will not be able to build on its own, require new protocols, standards, devices, chips and software. This in turn requires “significant investments over many years”.
In this context, CFO Wehner speaks of “several billion US dollars per year” that Facebook will spend “for the foreseeable future”.
Beyond excited to finally share a preview of our Facebook partnership with Ray-Ban! Our first smart glasses will be launched next year, and that’s just the beginning… The future will be a classic and it’s coming in 2021 😎 pic.twitter.com/l9992ZQGoy
—Hugo Barra (@hbarra) September 16, 2020
Ray Ban Facebook glasses will be released this year
On the hardware side, the company has a “pretty big agenda” in terms of developing VR and AR devices, says Zuckerberg. When you arrived at your destination, VR and AR glasses would give the strongest sense of presence. Facebook invests in core technologies such as special sensors that enable such advancements.
The next product of its kind is the Ray-Ban connected glasses that Facebook is developing in partnership with EssilorLuxottica. The wearable, of which nothing concrete is known about the range of functions, would offer the “iconic form factor” of Ray-Ban glasses and beyond “some pretty cool stuff” to be able.
The smart glasses, which represent the first step towards advanced AR glasses, will launch later this year and are expected to be showcased at the upcoming Facebook Connect, which is expected to take place in September or October.
Source: Facebook Q2 2021 results, cover photo: Facebook
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