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Meta scraps several projects, including smartwatch and consumer portal devices, to cut costs

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Amid rising costs and a tightening economy, Meta announced significant changes to its product roadmap, with several of its hardware projects being put on hold or delayed for the time being.

According to various reports, Meta is:

The changes significantly alter Meta’s ongoing plans, which also include the development of retail stores as part of a broader push towards consumer tech products, extending beyond its social platform roots.

Meta has also recently scaled back its audio social developments, while several other projects are under consideration.

The company has sought to reduce costs by focusing on developing its Metaverse-aligned initiatives, while dealing with the cumulative impacts of Apple’s new data privacy changes. Last year, Meta noted that Apple’s new ATT updates, which prompt users to turn data tracking on or off, will likely cost it around $10 billion in lost advertising dollars in 2022 alone. .Meta also reported a $10 billion operating loss at its Reality Labs division for fiscal year 2021.

The announcements, logically, spooked the market and sent Meta stocks plummeting from which they have yet to recover. This latest product roadmap update is part of Meta’s broader plans to maintain an even keel despite the expected economic uncertainty, as it is also reported future job losses and delays in several divisions.

And it’s not the only social platform in this boat. Last month, Snapchat issued a profit warning, with its Q2 turnover unlikely to reach the objectives it had communicated a month earlier, due to a “ macro-economic environment which has deteriorated further and faster than expected. Twitter is cancel job offers and emptying its management ranks, while ByteDance, the owner of TikTok, has lost $100 billion in market value over the past year.

Increased regulation, slowing spending and broader economic pressures are making it much harder for tech platforms to take big bets, which is seeing them all slow in their efforts to expand and scale into new areas.

Meta, of course, has already made this a key focus, and it wants to continue on its path to the metaverse, through increased adoption of VR headsets and other aligned tools.

As such, it doesn’t completely cut off its hardware development.

As noted by Meta CTO Andrew Bosworth:

So while we may not be getting a Meta Watch anytime soon, Meta is still working on a wrist-control device for VR, which will expand its metaverse focus, while continuing to invest in new related technologies. to the Metaverse, like this week’s announcement. of one new partnership with game creation platform Crayta.

Meta CEO Mark Zuckerberg said he feels “responsible” to invest in metaverse change, so it’s unlikely that Meta will completely move away from this direction any time soon. But these latest announcements signal a tough time ahead for the sector, which likely means Q2 earnings season won’t be much fun for most.

What will this mean for ongoing development and future changes in space? It’s impossible to say, but increased shareholder pressure tends to accelerate revenue metrics, which could be good, in terms of providing new advertising options and reach, while it could also be bad, inserting more ads in feeds and impacting user experience. .

Meta is well aware of these impacts, and as such may be less likely to pump out a whole new flood of ads (although Instagram users have anecdotally noted more ads in their feeds lately). time). But clearly, the squeeze is definitely on the way, and that could lead to a slew of changes as the rigs hitch a rocky road through the second half.