How long can Zuckerberg afford to bankroll the AR/VR market?

Hello friends, and welcome back to Week in Review!

Last week, we talked about about the "de-stonkifying" of the market. This week, we're looking at a wounded Facebook/Meta that finds itself backed into a corner.

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Image Credits: Facebook

the big thing

Meta had a bad week -- like history-making rough.

The Facebook parent-company saw its stock price get bludgeoned after a bad earnings report showcased that Apple's ad-blocking changes are shaving billions off its books and the company's crown jewel -- the Facebook platform -- has stopped growing and actually shrank this quarter.

The company's stock tanked by more than 26 percent, representing a $230 billion reduction in market cap and a $31 billion drop in Zuckerberg's personal net worth. Plenty of analysts shared that this was the biggest dollar amount single-day drop for a company's market cap ever.

The company's rough turn of luck couldn't be happening at a worse time, as Facebook looks to pivot the broader company towards the "metaverse" they also shared that they spent nearly $10 billion on the effort -- and don't expect to recoup that money any time soon. While Meta is managing to ship more and more Quest headsets, there anecdotally hasn't seemed to be much interest in the company's Horizon Worlds platform and there are few shortcuts towards finding an audience on an unproven hardware platform.

The AR/VR world is increasingly proving to be a tough place to do business. Apple has delayed its own headset again and again. This week, Insider reported on the struggles that Microsoft was enduring in its HoloLens division, sharing that the company was scrapping plans for a third-generation headsets amid a lack of clarity in its path towards becoming a player in the untapped consumer AR space. Meanwhile, engineers got a look at the next-generation of Magic Leap's hardware. This writeup from industry analyst Karl Guttag showcases how Magic Leap has turned away from several of the key technologies it raised billions of dollars to develop with its latest hardware which he nevertheless believes will "blow away" the HoloLens 2 in image quality.