Will Meta's VR gamble be seen as a good decision at the end of 2023?
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resolved Jan 3
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NO

Meta is all in on VR and the stock price is taking a big hit. Some claim Zuckerberg is a genius who has it all figured out, some say he is just pissing money away.

At the end of 2023 will the gamble be viewed as a good decision?

I will resolve based on a combination of factors including but not limited to how many users the VR platform has, Meta's market cap vs. ATH and SP500, general sentiment, and possibly some polls here or from my twitter account.

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predicted NO

Some reading around and the resolution is No. The stock price has gone up but I don't think that's due to successfully making a VR product, I couldn't find anything suggesting their VR world has increasing numbers of users and several articles stating that reality labs is burning billions of dollars.

predicted YES

@LachlanMunro Then what is it? I don’t believe that Instagram alone (their only real successful product) has caused Metas stock to rise 200% in a year. Even if the general public doesn’t buy it yet, a lot of people believe in Meta’s vision. I don’t believe the Metaverse will ever be successful in the way they think, but it certainly has its applications.

predicted NO

@ShadowyZephyr whatever market forces got them to this price last time? Yeah it's a huge gain but all they've done is get back to their 2021 levels.

predicted NO

Going to start looking into this so feel free to link relevant stuff i should see. Have a feeling it might be less obvious than I hoped.

12% seems low for a stock up 200% this year

Not yet, but it very well may be by the end of 2024, imho

predicted NO

Someone let me play their oculus recebtly and it was really fun, but i will try not to let this count in my resolution criteria.

Googling "Meta VR gamble paying off" at the moment, this doesn't look promising! A lot more negative news and sentiment than positive

predicted YES

That is about metaverse specifically. Their headsets have sold very well and their stock is still going up. The metaverse didn’t work beside the tech wasn’t ready yet, not because the idea was bad either. It could still turn around for them. The Quest 2 has sold 18 million units, so of course the stocks are going to go up - they’re making money.

Edit: revenue, not profit - they are operating at a loss on these due to R&D costs, but that is part of their strategy

If I were the one resolving I’d say 50%. The metaverse has largely failed, but their other Vr projects have done well.

predicted NO

@ShadowyZephyr cool, thanks for the detail. I just googled superficially and didn't appreciate the distinction between their different VR ventures.

I do understand that the metaverse stuff might not be a mistake in the long-run, but given this question's resolution criteria about how it looks at end of year and the negative media around it, was happy to gamble on that.

But yes, including their other ventures it sounds more positivea all up.

Meta's stock price is up 140% YTD and they've just released a new VR headset

VR seems weird to me, but stockholders seem to like it....?

@LachlanMunro that's a large stock price increase, to what extent do you think that is evidence of VR paying off for them? I admit it confuses me.

https://www.meta.com/au/quest/quest-3/

predicted NO

@chrisjbillington I am also confused. The stock price going up seems unrelated to VR stuff, and I think most of their success will be due to the weird celebrity AI things. I think I will need to do a deep dive to resolve this when it's time.

@LachlanMunro given their level of investment in the metaverse, to try and say stockholders are ignoring the metaverse portion and that explains the crazy stock growth this year seems odd to me.

predicted NO

@RobertCousineau yeah that's fair, I actually forgot about the weird podcast episode thing

predicted YES

I think the Metaverse will fade into irrelevancy for a while. It's a good idea, but the tech isn't really powerful enough for it yet, and I expect a future iteration maybe in like 5-10 years to have more success. However, the Metaverse is only a small part of the VR ecosystem. Meta has sold 20 million Quest headsets, and their stock price is almost back to its peak (even though they are having some user retention issues). I'd put this at ~30%.

When Apple is entering a new product domain, you know it's probably going to be something big.

https://www.nasdaq.com/articles/meta-platforms-stock-still-a-buy-at-52-week-high

Is this about whether you think it was a good decision, or whether you estimate that people in general think it was a good decision? I.e. if I made an argument in December 2023 that convinced you that Meta was right, but most people still disagreed, how would this market resolve?

predicted NO

@EMcNeill resolves to my opinion ultimately, but I will consider mostly objective inputs (stock price etc.). If they are no longer working on a vr platform I will consider it a bad decision even if they do something new and recover. If it's truly ambiguous I may resolve NA..

@LachlanMunro what's your thinking currently?

@LachlanMunro it's all about the platform. Why sell headsets at a loss, other than to lock users into the platform?

Quest 3 is going to be a hit. Their strategy is working

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