Zuckerberg: Focusing on both AI and Metaverse, Quest 3 will be the next milestone

　　Since the name change, Meta has faced a series of turmoil, including the economic downturn in the market, the decline in advertising profits, and significant layoffs and restructuring.

　　Meta achieved a better-than-expected revenue growth in 1Q23, compared to the previous three quarters, which were all down year-on-year, showing that the market has initially turned better under the background of the "Year of Efficiency" reform. According to Meta's data, revenue in 1Q23 was US$28.645 billion, up 3% year-on-year, while net income was US$5.709 billion, down 24% year-on-year.

　　At the same time, Mark Zuckerberg also debunked the rumor that "Meta is no longer Metaverse priority" on the network, and said: this statement is not accurate, Meta has always focused on AI and Metaverse, and will continue to plow in the future in these two directions.　　

I. Meta and Executive Conference Call Summary

　　Meta CFO Susan Li talked about efficiency reform several times, saying: Through the recent several layoffs and stopping low-priority projects, we will use AI to improve productivity afterwards.

　　It was mentioned in the conference call that Meta will restart hiring after the layoffs are completed next month. The main staff increases are in three major business directions: Reality Labs, advertising business, and generative AI.

　　Bloomberg's view on this is that the rebound in advertising revenue this quarter will also allow Meta to invest more money into AI and Metaverse.

　　Regarding the direction of the AI business, Zuckerberg said: Generative AI will affect every one of our apps and services, and Meta remains well positioned in the current AI arms race. And keeping up with good finances will also help us better face market turbulence and allow us to focus more on our long-term priority projects.　　

　　Previously there were rumors that Meta had shifted its focus from Metaverse to AI. Zuckerberg said in response:

　　1, the rumor that we are lowering the priority of Metaverse is not accurate. We have been focusing on both AI and Metaverse for many years, and we will continue to work deeply in both directions in the future.

　　2, AI and Metaverse are two related areas. Breakthroughs in computer vision allowed us to launch the first VR all-in-one machine, and MR mixed reality technology is built on a series of AI technologies that help us understand the physical world and align and integrate it with the virtual digital environment, while generative virtual scenes are critical to large-scale immersive experiences.

　　3, Meta's vision for AR glasses includes an AI-based operating system, which we believe will be the foundation for the next generation of computing platforms.

　　4, Metaverse is a long-term project, its theoretical foundation has not changed, and we remain committed to the Metaverse build.

　　5, Metaverse will also invest in AI technology development, for example, we have made numerous investments in the past few years in the combination of virtualization body and AI technology.

　　6, In the short term we have reached a number of milestones, for example

More than 1 billion avatars on our platform already;

Doubling the number of apps in the Quest store that exceed $25 million in revenue;

More than 50% of Quest's daily active players spend more than 1 hour in use.

　　7, The next milestone is the launch of the next generation VR/MR device (aka Quest 3) later this year. About 3 years ago we released Quest 2, a device that pushed the boundaries of VR extremely hard, and I was very pleased to be able to show the world the new technology that was being developed at that time, and with the premise that the price was acceptable for many people.　　

II. Reality Labs revenue

　　According to the earnings data, Meta Reality Labs in 1Q23 revenue of $339 million, down 51.22% year-on-year; net loss of $3.992 billion, a 34.86% year-on-year loss expansion.

　　On a consolidated basis, Reality Labs' net loss exceeded $10 billion in 2 consecutive years in FY21 and FY22. According to Meta's investment plan in Metaverse, it is expected that Reality Labs' net loss in FY23 may exceed $10 billion.

　　Reality Labs Historical Revenues:

　　By Quarter

Q1 2021 revenues of $534 million and a net loss of $1,827 million;

Q2 2021 revenue of $305 million for a net loss of $2,432 million

2021 Q3 revenues of $558 million and a net loss of $2,631 million;

2021Q4 revenues of $877 million and a net loss of $3,304 million;

Q1 2022 revenues of $695 million and a net loss of $2,960 million;

Q2 2022 revenues of $452 million and a net loss of $2,806 million;

Q3 2022 revenues of $285 million and a net loss of $3,672 million;

Q4 2022 revenues of $727 million and a net loss of $4,279 million;

a net loss of $3,992 million on revenue of $339 million in Q1 2023;

　　By Year

2019 full year revenue of $501 million and a net loss of $4,503 million;

2020 full-year revenue of $1,139 million and a net loss of $6,623 million

2021 full-year revenue of $2,274 million and a net loss of $10,193 million

2022 full-year revenue of US$2,159 million and a net loss of US$13,717 million;

　　Reference: Meta, bloomberg