Meta's Metaverse Cuts Not Surprising: EMARKETER's Smiley

Core Insights - The consumer's attitude towards technology is shifting, with a notable decrease in time spent on screens and social media, leading to budget cuts in metaverse initiatives [2][3][15] - There is a significant overlap between AI and virtual reality technologies, but the demand for these innovations is not yet strong enough to justify large expenditures [4][6][7] - The standalone media app has seen limited adoption, with only 3.5 million users globally, indicating challenges in consumer acceptance compared to the billions using other platforms [11][12] Industry Trends - A 30% budget cut for metaverse initiatives is anticipated, which will likely include layoffs, reflecting a broader trend of companies reassessing their investments in emerging technologies [3][15] - Despite the popularity of social media, users are increasingly looking to reduce their screen time, which may impact future growth in these platforms [2][3] - Regulatory pressures are mounting on social media platforms, particularly in the EU, which could affect their operational strategies and competitive landscape [12][14][15] Company Performance - AI is positively impacting the business's bottom line and enhancing algorithms, but consumer-facing ventures are struggling to gain traction [5][10] - The integration of AI within existing platforms like WhatsApp and Instagram is more successful than standalone applications, which face stiff competition [12][14] - The company is experiencing challenges in user adoption for new technologies, which may hinder future growth prospects [11][12][15]