Meta CEO Mark Zuckerberg received more bad news over the holiday season as his foray into the metaverse has yet to pay off for his struggling tech company.
Sales of virtual reality (VR) headsets were down 2% year over year in 2022, researchers told CNBC on Wednesday.
In early December, VR headset sales generated just $1.1 billion, according to research analytics firm NDP Group.
Ben Arnold, consumer electronics analyst for NPD, told CNBC that sales of Meta’s $400-per-unit Quest 2 VR headset, which is considered the benchmark in the market, also declined, although he did not specify by how much.
Overall, there was a 12% drop in the number of global shipments of augmented reality (AR) and virtual reality headsets compared to 2021, according to analytics firm CCS Insight. There were 9.6 million helmet shipments worldwide this year.
“Virtual reality has had an amazing holiday in 2021,” Arnold told CNBC. “It was a great time last year to get one of these products, and VR totally crushed it.”
Revenue generated from VR headset sales doubled last year to $530 million in 2020, according to NPD.
The Post has sought comment from NPD and Meta.
Meta, the parent company of social media apps Facebook, Instagram and WhatsApp, has transitioned from its traditional ad-based business model to the Metaverse, which is powered by VR and AR technology.
But the change came at a significant cost to Meta’s bottom line.
The company has seen the value of its shares fall by more than 65% since the start of this year. On Wednesday, Meta’s share price was down about 0.5%.
At the end of October, Meta announced a drop in revenue for the second consecutive quarter.
The Menlo Park, Calif., company earned $4.4 billion, or $1.64 per share, in the three months that ended Sept. 30. That’s down 52% from $9.19 billion, or $3.22 per share, in the same period a year earlier. .
Revenue fell 4% to $27.71 billion from $29.01 billion, slightly higher than the $27.4 billion analysts had predicted.
Zuckerberg, whose net worth was valued at $44.4 billion on Wednesday, was worth a personal best of $140 billion last year.
While Zuckerberg has preached patience and played the long game, his bet on the metaverse has so far proven unsuccessful.
Jim Cramer, the CNBC analyst who has loudly touted his support for Zuckerberg and his company’s management team, delivered an emotional mea culpa on air in October after Meta released its latest report on the results.
Meta will have its work cut out for it as other tech giants enter the metaverse in hopes of grabbing the VR headset market share.
Apple, Sony, Valve and Hewlett Packard are planning to unveil their own headsets or have already brought their products to market.