Meta Platforms(US:META) Xin Lang Cai Jing·2025-12-04 14:39Core Insights - Meta Platforms is planning a significant strategic reduction in its metaverse project, with potential budget cuts of up to 30% for the fiscal year 2026, affecting products like "Horizon Worlds" and Quest VR devices [1] - The Reality Labs division has incurred cumulative losses exceeding $70 billion since the company's pivot to the metaverse in 2021, with ongoing investor skepticism due to limited consumer applications and privacy concerns [1] - Following the news of budget cuts, Meta's stock price rose over 6% in pre-market trading, indicating market optimism regarding the company's decision to tighten its long-term loss-making ventures [2] Budget Cuts and Strategic Shift - The budget cuts are part of Meta's fiscal planning for 2026, with CEO Mark Zuckerberg requesting a general 10% expense reduction across business lines, while the metaverse division faces deeper cuts due to disappointing market performance [1] - Analysts have suggested that Meta should consider shutting down the Reality Labs division, with predictions that projects like Horizon Worlds may be closed by the end of the year to focus on more promising AI initiatives [3] Focus on AI and Hardware - Zuckerberg has shifted focus from the metaverse to AI, emphasizing large models and generative AI products, including the Llama model and Meta AI assistant, as well as AI-related hardware like Ray-Ban smart glasses [3] - Despite the cuts in metaverse spending, Meta continues to strengthen its consumer hardware strategy, recently hiring a prominent design leader from Apple, signaling a future direction more aligned with AI rather than virtual world development [4]