Meta CEO Mark Zuckerberg received more bad news during the holiday season as his foray into the metaverse has yet to pay dividends for his struggling tech company.
Sales of virtual reality (VR) headsets declined 2% year-over-year in 2022, researchers told CNBC on Wednesday.
As of early December, sales of VR headsets generated just $1.1 billion, according to the research analytics firm NDP Group.
Ben Arnold, NPD’s consumer electronics analyst, told CNBC that sales of Meta’s $400-per-unit Quest 2 VR headset, which is considered the standard-setter in the market, also declined, though he did not say by how much.
Overall, there was a 12% drop in the number of global augmented reality (AR) and VR headset shipments compared to 2021, according to the analytics firm CCS Insight. There were 9.6 million deliveries worldwide of headsets this year.
“VR 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 sales of VR headsets doubled last year from $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 pivoted from its traditional, bread-and-butter ad-based business model to the metaverse, which is powered by VR and AR technology.
But the shift has come at a significant cost to Meta’s bottom line.
The company has seen the value of its stock dip by more than 65% from the start of this year. As of Wednesday, Meta’s stock price was down by around 0.5%.
In late 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-month period 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 that analysts had predicted.
Zuckerberg, whose net worth was valued at $44.4 billion as of Wednesday, was worth a personal all-time high of $140 billion last year.
While Zuckerberg has preached patience and is playing the long game, his bet on the metaverse has thus far turned out to be a failure.
Jim Cramer, the CNBC analyst who vocally touted his support of Zuckerberg and his company’s management team, gave an emotional, on-air mea culpa in October after Meta released its most recent earnings report.
Meta will have its work cut out for it as other tech giants move into the metaverse in hopes of grabbing VR headset market share.
Apple, Sony, Valve, and Hewlett Packard are either planning to unveil their own headsets or have already offered their products on the market.