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I don’t understand this. Unless VR gaming was a net loss, why wouldn’t you keep investing in it? If you were currently making a profit from gaming, shouldn’t yo
by 2muchcoffeeman 3y ago
I don’t understand this. Unless VR gaming was a net loss, why wouldn’t you keep investing in it? If you were currently making a profit from gaming, shouldn’t you just hedge your bets and continue to make money?
- dageshi 3y agoA profitable division in a small market (relative to facebooks ad business) just isn't worth the effort. They had to spin it into the "metaverse" which is this mythical thing that might be big enough theoretically to make "real" money for them.
- tsimionescu 3y agoThe thing is that VR gaming seems to be a tiny niche. Even if profitable on paper, is it really worth the organizational costs to maintain a division that addresses a tiny market with no synergies of any kind with the rest of the business? If this was not the case, you would see lots of Facebook restaurants or cleaners or hair salons etc. since these are all easy to make profitable.
- 2muchcoffeeman 3y agoHow does it not synergize with the metaverse? If it takes off , there will 1000% be games. And why would a division that makes money have some negative organisational cost?
- paulddraper 3y agoRestaurants are notoriously difficult to make profitable. And when they are, it's usually <5% margin.
- rchaud 3y agoSimple answer: the stock price. If gaming is profitable but the ads business is more profitable and less capital intensive, you would be advised to stick to ads. Particularly when it's expensive to borrow. Reality Labs have spent $20bn already. How much does the return on that capital have to be to convince the stock market that it was a good idea?