Meta Platforms Inc. took another took subtle step toward its reinvention when it changed its stock ticker symbol this week to “META” from “FB.”
The Facebook parent company
has spent the last few months shifting investors’ focus onto its long-term strategy, notably its push toward the metaverse, a much-hyped network of virtual reality worlds. According to Meta, by harnessing 3-D technology, the metaverse will let users socialize, learn, collaborate and play.
Meta Chief Executive Mark Zuckerberg has even touted the metaverse as the next era of social technology.
But, at this stage, the metaverse is still a long way from widespread adoption. Last year, when the tech giant morphed into Meta, it described the metaverse as a “hybrid of today’s online social experiences” that can be expanded into three dimensions or projected into the physical world.
Shades of “The Matrix”? Or a belated attempt to claw market share from Alphabet Inc.’s
Workspace, Microsoft Corp.’s
Teams, and the pandemic’s big videoconferencing winner, Zoom Video Communications Inc.?
The aging, albeit huge, Facebook user base and intense competition from rivals like TikTok mean that Meta needs to breathe new life into its business. By offering myriad new ways for users to interact socially and professionally, the metaverse could achieve this, but it could take years to build out an ecosystem.
And who will use the metaverse? The virtual reality worlds are a natural fit for the gaming community, but Meta wants to bring in a broader range of consumers and businesses. To entice users, this year Meta plans to launch a version of their Horizon virtual reality platform that enables access to the metaverse without a headset.
Meta is not the only tech heavyweight targeting the space. Microsoft, with its vast footprint in business computing, has its eye on the metaverse.
Microsoft’s metaverse strategy was in the spotlight this week when it emerged that Alex Kipman, leader of the firm’s augmented-reality headset project, is stepping down. The departure of Kipman, who led efforts to develop the HoloLens headset, was detailed in an internal email seen by The Wall Street Journal.
Augmented and virtual reality products are seen as key in the push to bring metaverse to the masses, so Microsoft’s next HoloLens moves will be closely watched.
Microsoft is already working with Japan-based Kawasaki Heavy Industries Ltd.
on an “industrial metaverse” which uses Microsoft’s cloud-computing platform Azure and HoloLens to troubleshoot robotic equipment. Pennsylvania-based food and beverage company Kraft Heinz Co.
is also working on metaverse projects with Microsoft.
Microsoft has also been talking about the technology infrastructure that will underpin the broader metaverse.
“Beneath the buzz, the metaverse is arriving in both predictable and unexpected ways,” wrote Charlie Bell, Microsoft’s executive vice president for security, compliance, identity and management, in a blog post earlier this year.
Because there will be no single metaverse platform or experience, he added, interoperability is crucial. Bell also flagged the importance of security in this new network of virtual worlds.
There are clearly big opportunities in the metaverse for the likes of Meta and Microsoft, but the game is still in the early innings. During the first quarter, Meta’s Reality Labs segment, which includes the metaverse, reported a loss that widened to nearly $3.0 billion from $1.8 billion a year ago.
Even Meta CEO Zuckerberg has acknowledged that the metaverse is a long-term play. Meta is laying the groundwork for the 2030s to be “very exciting,” he said, during the company’s first-quarter earnings call in April.
Set against this backdrop, investors may have to wait before the promise of these virtual worlds becomes financial reality.
Meta’s stock has dropped about 10% in the two days since the ticker change. It has slumped 47.5% year to date, while Microsoft shares have shed 24.1% and the S&P 500 index
has lost 17.9%.