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Meta "detonated" the metaverse again.

However, this time, they neither drew a big cake nor handed over any extraordinary transcripts. Instead, they used a big price increase of terminal equipment to cut a wave of leeks in the consumer market.

At the end of last month, Meta updated a message on the Oculus blog, saying that its latest all-in-one VR headset Meta Quest 2 will usher in a wave of price increases starting in August.

As compensation, Meta will give new users a bonus VR game, Beat Saber, for a limited time.

However, judging from the magnitude of this price increase, I am afraid that even Beat Saber, a phenomenal VR game, will not be able to quell the complaints and dissatisfaction of the consumer market.

Meta said that both the Quest 2 128GB and 256GB models will increase the official price by $100 , from $299 and $399 to $399 and $499, respectively. In addition, Meta will increase the price of Quest 2 related accessories and refurbished machines.

At present, the Quest 2 after the price increase has been officially launched on the official Meta store.

Considering that Quest 2 is an "old product" that has been released for nearly two years, some netizens who have purchased Quest 2 before joked that they did not expect that after some operation, they were equivalent to buying a financial product .

As for the reason for the price increase, Meta said that it was due to the increase in production and transportation costs. In order to ensure the long-term development of the entire VR industry, and that Meta can continue to develop and provide consumers with better VR equipment , this difficult decision was made. .

Since Zuckerberg changed Facebook’s name to Meta in October last year, announcing that it would fully enter the Metaverse (Metaverse), the originator of the Internet social media has encountered many turmoils such as stock price plummeting, privacy regulation, and disputes over commission ratios .

Today, even the Quest series of VR headsets, which have been widely recognized by the consumer market, will eventually become a scythe to cut leeks.

Quest 2 Growth Myth

The rapid and savage growth of Quest 2 relies on the four-character motto that is regarded as the standard by Internet companies: money- burning subsidies .

At the beginning of its release in September 2020, the Oculus Quest 2 (64GB version), which had not been renamed at the time, triggered a wave of VR headsets with its $299 price tag.

You must know that the official starting price of the original Oculus Quest (64GB version) is also $399, which shows that it was also called Facebook's Meta at the time, and it was determined to develop the XR market territory.

Even more exaggerated is that one year after the Quest 2 was released, Meta directly upgraded the two versions of the 64GB and 128GB versions to 128GB and 256GB, respectively, on the premise of keeping the price unchanged.

This behavior of increasing the volume without increasing the price directly made the Quest 2 like to mention the title of "the most cost-effective VR headset" at that time , triggering a round of looting in the consumer market.

Before the real killer application appeared in the entire VR content market, the extreme cost performance brought by Meta’s crazy money-burning subsidy directly brought considerable sales data to Quest 2 .

According to a report released by IDC in March this year, the global AR/VR headset shipments will reach 11.23 million units in 2021, a year-on-year increase of 92.1%. Among them, the VR headset shipments reached 10.95 million units, of which Meta accounted for 80% of the share, far exceeding that of friends Sony and HTC.

As production capacity increases and the market continues to heat up, the market share of Meta VR headsets soared to 90% in the first quarter of this year.

The explosive sales of Quest 2 gave a boost to Meta's follow-up product planning route .

Official information shows that in addition to launching a high-end new product codenamed "Project Cambria" within this year, Meta also confirmed that the next generation of the Quest series will also be announced soon.

According to foreign media reports and information excavated by developers, this Project Cambria is most likely the long-running Quest Pro version, and it is also the latest attempt of Meta hardware terminal products to transform from focusing on game tracks to mixed reality and metaverse. .

In order to provide a platform for this mysterious new product, Xiao Zha himself has released his own experience on his social media more than once, which shows the high weight of Project Cambria in Meta.

According to the currently known information, this commercial-grade XR all-in-one headset will be equipped with new AR and face tracking functions in addition to further upgrades on the basis of the Quest 2 hardware. According to media forecasts, the starting price of the new product will fluctuate in the range of $800 to $1,000.

In contrast, the iterative version of Quest 2 is much more low-key, and there is no more news out of it than the official confirmation of the project itself.

But what is certain is that the Quest 2's once "$299 friend" virtue is gone forever.

The strategy of "killing" competitors and reducing marginal costs by seizing market share by burning money subsidies is infinitely amplified in the Internet track where the Matthew effect is extremely serious. Meta, the originator of the Internet social platform, naturally understands this truth.

When the consumer market chooses to vote with their feet, and when Xiao Zha and his Meta Metaverse ambitions have gained a firm foothold in the terminal equipment segment, it means that the road to "extreme cost performance" of the Quest series is almost over.

Xiao Zha, a veteran of cutting leeks

The price increase of the Quest product line is inevitable. Unfortunately, Meta chose to raise the price of the Quest 2 by $100, which is an unseemly practice, which eventually caused a controversy in the consumer market.

However, considering that Xiao Zha is a veteran of cutting leeks in the Metaverse , this matter can be self-consistent.

Back in early April this year , Meta, which had just changed its name for less than half a year, was pushed to the forefront of the public opinion field because of the problem of "toll fees".

According to foreign media CNBC, Meta plans to take a total of 47.5% of the developer’s share in its upcoming VR content platform application Horizon Worlds, which means that half of the developer’s income must be used to pay the “Meta tax”.

Specifically, content developers need to pay Meta a 30% transaction commission as the Meta Quest Store hardware platform fee, and also pay an additional 17.5% for each transaction on Horizon Worlds.

The so-called Meta Quest Store is actually the official app store for the Quest VR headset, and Horizon Worlds is an app produced by Meta. In this application, qualified developers can list and sell various virtual assets, mainly NFT products.

That is to say, Meta, through the very tricky method of "embedding" a virtual product mall in its official application mall , clearly controls the percentage of a single transaction within 30%, intending to avoid regulatory authorities and external public opinion. s concern.

As a comparison, NFT sales platforms represented by OpenSea and LooksRare basically take no more than 3% . Meta's move, in addition to stimulating a group of developers who dare not speak out, has also attracted mockery from its old foe, Apple.

An Apple spokesperson said that Meta has been using small and medium-sized enterprises and developers to attack Apple's commission rate in the past, but now it charges these developers a high commission fee, exposing its hypocritical face.

This shows that they want to use Apple's App Store platform for free, but also want to benefit from developers and small businesses using their own platform.

You must know that in the post-epidemic era, Xiao Zha has publicly "crusade" Apple's App Store's 30% cut rate many times , saying that when Meta is "providing developers with paid online activities, fan subscriptions, badges and independent news products for free" When it comes to services, Apple only wants to make money by taking a cut.

Xiao Zha's moral kidnapping style eventually turned into a spear of Apple's public opinion counterattack, which can also be said to be a black humor between the two technology giants.

However, as the saying goes, big companies can bend and stretch, and their harsh words go through their guts, and their revenue stays in their hearts . For the leek, if you cut it once, you will cut it, and if you cut it ten times, you will also cut it.

As long as Xiao Zha is courageous enough, whether it is a 47.5% percentage or a price increase of up to $100, it is a good business decision to produce good revenue data and stabilize investment market confidence.

The price increase of Quest 2 this time is just a wave of Xiao Zha's reaping sickle of the Metaverse, from the content production side to the consumer field.

The landlord's house has no food left.

Aside from the hat of "cutting leeks", the sharp price increase of Quest 2 is more of a helpless move after the Meta Metaverse burns too much money.

In early February of this year, Meta released its first earnings report after changing its name. According to the financial report, Meta’s revenue in the fourth quarter of last year was $33.7 billion, but its net income was $10.3 billion, down 8% year-on-year.

More importantly, the revenue of Reality Labs, the development arm of Meta's "metaverse", has finally been revealed.

The financial report shows that the division has suffered huge net losses in 2019, 2020 and 2021, and the amount of losses has expanded year by year, reaching US$4.5 billion, US$6.62 billion and US$10.19 billion, respectively.

For all of 2021 , Meta would have made more than $56 billion in profit last year if it weren't for Reality Labs' loss.

In the fourth quarter earnings conference call last year, Meta said bluntly that "building the Metaverse is an expensive gamble."

Although Xiao Zha has given a shot to the outside world at the developer conference in October 2021, he said that Meta will invest 10 billion US dollars in the next year to create a larger-scale metaverse territory.

However, the capital market did not seem to buy Xiao Zha’s great idea, which was reflected in the stock price. On the first trading day after the current quarterly report was released, Meta’s stock price plummeted by nearly 30%, and its market value evaporated by more than 230 billion US dollars.

This downward trend has continued to this day, and Meta's share price has nearly halved since the beginning of the year.

For this reason, Meta had to bow to reality and slow down on the no-return road of burning money in the Metaverse.

At the earnings conference for the first quarter of this year, Xiao Zha said that he will slow down some of the investment in artificial intelligence infrastructure, business platforms and reality labs. , lower than the previous forecast of 90-95 billion US dollars.

In the second quarterly report released at the end of last month, Meta further reduced this figure, saying that the total expenditure this year was adjusted to 85-88 billion US dollars

Specifically, Meta has made adjustments in the past period of time, such as shrinking Reality Labs R&D investment, restructuring the AI department, stopping the development of smart watches, and optimizing the business content of Portal and Horizon.

When "open source" is far away, the only way to stabilize revenue data is through "throttling". The price increase of Quest 2 is just one of the sequelae of Meta All in Metaverse's money-burning strategy.

To put it simply, even the landlord's family has no surplus food.

In order to restore investors' confidence, "throttling" alone is not enough. To this end, Meta, together with Analysis Group, launched the so-called "world's first" Metaverse White Paper (hereinafter referred to as "White Paper") to further serve as a strategic platform for its own Metaverse.

It is mentioned in the white paper that in the next few years, the market size of the Metaverse will be as high as $2 trillion. And when the metaverse is widely adopted, the most optimistic estimate of this figure could exceed $80 trillion.

However, under this big pie, the white paper also emphasizes that the development of the entire Metaverse is still in the early stage, and there is still a lack of necessary conditions to achieve the above market scale , and core elements such as concurrent infrastructure, standard protocols, and user introduction still need to be built.

Of course, since Meta is taking the lead behind this white paper, its development prospects for the Metaverse always revolve around ecological opening, hardware terminal development, and social applications, etc. , with the intention of stabilizing investors' confidence and offering cooperation to the industry chain. olive branch.

In fact, almost no one would question the metaverse and mixed reality as the next form of the Internet by now. Putting this white paper aside, almost all industry analysts agree that the Metaverse will be a new trillion-dollar track.

However, it is still unknown in which direction the track will develop.

So far, whether it is the competition of terminal equipment from friends such as HTC Vive and Pico, or Apple, which has been staring at the mixed reality market and has been reluctant to start, all have their own wishful thinking. Meta wants to swallow the cake of the metaverse and become the rule maker, and there is still a long way to go.

On this road, what Meta can do now is to do its best to convince the capital market to believe in itself. In Xiaozha's own words, this is already "a profound battle of ideas about where the Internet should go" .

Xiao Zha's words have come to this point. If consumers don't know how to be a leek, they will be too ignorant to praise.