Meta shipments are cut by 3 million units, is the Metaverse about to hit the ceiling?

Meta shivered, causing a huge earthquake in the domestic Metaverse circuit.

On June 22, Ming-Chi Kuo, a well-known technology analyst at Tianfeng International, posted on Twitter that the Meta Metaverse intelligent hardware business has a downward trend. Meta has cut 2022 Oculus series headset shipments by 40%, down from an original forecast of 10-11 million units to 7-8 million units. In addition, Meta has also suspended all new XR headset hardware projects beyond 2024.

Later, Ming-Chi Kuo posted again that shipment forecasts are based on investigations and judgments, not official data. And corrected that the 2022 Meta VR headset shipments will be reduced by 25-35%, and the corresponding shipments will remain unchanged at 7-8 million units.

Affected by this, the stock prices of listed companies in the domestic Metaverse industry chain and fruit chain have suffered heavy losses. The stock price of Goertek , which manufactures VR headsets for Meta , crashed on the 22nd. The stock price fell by 15% in two days, and the market value fell by 17 billion yuan. In this regard, Goertek responded that the current production, operation and order situation are relatively normal, and the main business progress is also in line with expectations, and there is no plan to adjust the semi-annual performance guidance.

Coincidentally, just a day before the “order cut” was exploded, Meta just announced the prototypes of several VR headsets. On the same day, Tencent also reported that the XR department was officially established.

On the one hand, the “arms race” of domestic manufacturers and Metaverse entrepreneurs is in full swing; on the other hand, the global leader in XR hardware has begun to slow down after the dividends of the epidemic subsided. People have to worry, will the ceiling of this wave of Metaverse boom come faster than expected?

Meta shipments are cut by 3 million units, is the Metaverse about to hit the ceiling?

Goertek shares plummeted on June 22|Baidu

01 Meta cut the line after releasing the new XR hardware?

GoerTek used the name GoerTek Acoustics, and its main business was supplying acoustic devices to Apple. After Meta acquired Oculus in 2014, the VR boom started, and Goertek became the main foundry and technology partner of Meta and Sony XR devices.

The early XR business accounted for a small proportion of Goertek, but with the increase in Meta’s VR hardware shipments in recent years, XR has become more and more important to Goertek. According to public data, in July 2020, Goertek won a large order for the new generation of VR equipment from Oculus, a company owned by Facebook (predecessor of Meta). Yuan.

Ming-Chi Kuo’s latest correction also mentioned that the Meta order reduction is mainly in the second half of 2022. Given Meta’s reduction in hardware investment and the risk of economic recession, he lowered his forecast for Meta VR headset shipments in the second half of 2022 by 40-50% , and believes that shipments of Meta’s new generation of headsets, originally scheduled for after 2024, will be delayed.

Ming-Chi Kuo also updated the forecast made in April this year, analyzing the configuration and performance of the high-end Meta Quest 2 Pro, and predicting that the price will rise to $799 or higher.

Meta shipments are cut by 3 million units, is the Metaverse about to hit the ceiling?

Ming-Chi Kuo’s Tweets|Twitter

He revealed that the Meta Quest 2 Pro will use a mini-LED display and 2P Pancake to significantly improve visual effects, and will support VR & AR (video perspective). In addition, it will be equipped with about 16 cameras (10 for the headset and 6 for the two controllers), using the Qualcomm XR 2 processor, with eye tracking, facial expression recognition and 3D sensing support. Mass production will begin in the third quarter of 2022, and shipments are expected to reach about 2 million units in the second half of 2022.

Even if shipments will decline, Meta’s determination to “all in” the Metaverse cannot change, and the confidence is enough.

On the 21st, Meta unveiled several prototypes of VR headsets at once. CEO Zuckerberg shared a video of himself experiencing these devices on Facebook, and introduced the recent development of the Metaverse hardware business. According to Zuckerberg, the new device has brought new heights in terms of resolution, brightness and size that cannot be achieved by existing devices. It seems that confidence in the hardware business is still there, perhaps expressing their determination not to give up high-end VR. .

Meta shipments are cut by 3 million units, is the Metaverse about to hit the ceiling?

VR Prototype | Meta

Inside Meta’s Reality Labs, researchers use the “Visual Turing Test” as a criterion for testing VR glasses. is a real world.

Four key technical challenges that need to be addressed before passing the visual Turing test: zoom, distortion, retinal resolution, and HDR. In the Meta demonstration video, several VR headset prototypes were used to overcome different technical problems, hoping to provide a visual experience indistinguishable from reality in the future.

Meta shipments are cut by 3 million units, is the Metaverse about to hit the ceiling?

Zuckerberg shows off a VR prototype | Facebook

Whether the Meta Quest 2 Pro will arrive as scheduled is unknown, but it can be seen from Zuckerberg’s demo video that hardware advancements are difficult, and the arrival of breakthrough reforms is still unpredictable. It is still far from the Metaverse that consumers expect and Meta wants to achieve.

Compared with the previous two generations of Quest, there is no significant breakthrough in hardware technology, which may be one of the reasons for the decline of Meta’s hardware business.

02 The domestic Metaverse has no chance to decline

Meta has encountered the trouble of declining shipments. In contrast, the domestic Metaverse hardware has just begun to “start a business” – Tencent, Byte, and even Luo Yonghao have all entered the game in the past year.

On June 21, according to Reuters, citing sources, Tencent Holdings announced to its employees on Monday the official establishment of the “extended reality” (XR) division, which is tasked with building an extended reality business including software and hardware for Tencent. It will be led by Li Shen, Tencent Games’ global chief technology officer, and will be part of the company’s Interactive Entertainment Group (IEG).

The department could eventually have more than 300 employees, sources said. That figure is significant in an environment where Tencent has been cutting costs and slowing hiring.

The news that Tencent is going to set up an XR department has come out more than once. In February of this year, it was reported that Tencent XR’s new business layout is all-true Internet, and the internal recruitment of living water is launched. The goal is to build a world-class hard technology team under the leadership of industry leaders. The business focuses on the layout of the full-link XR ecosystem, including XR equipment on the hardware side, perception and interaction technology on the software side, and content and developer ecology on the content and industry sides.

Earlier than Tencent, ByteDance’s acquisition of Pico is still a big domestic Metaverse event that people talk about. In August last year, ByteDance acquired Pico, a domestic maker of VR headsets, for a sky-high price of 9 billion yuan.

On June 17, the byte virtual girl group A-SOUL conducted a virtual live broadcast, requiring the use of Pico devices. Judging from the feedback from the experiencers, the live broadcast is actually a panoramic video mode, not a real VR live broadcast. How many hardware sales are promoted with the content ecology, only Byte knows.

Meta shipments are cut by 3 million units, is the Metaverse about to hit the ceiling?

A-SOUL’s first Pico VR live broadcast|Online

Like Meta, Tencent, ByteDance, and Meta have all chosen the path of starting from hardware devices and developing the content ecosystem at the same time. Only after Meta completed a significant increase in hardware shipments, the domestic layout has just caught up.

In the first wave of VR/AR from 2016 to 2018, the global shipment of high-end VR hardware products was around 1 million units, most of which were still PSVR attached to the PS ecosystem. Big companies like Meta are also unable to develop the VR/AR ecosystem.

In 2020, the emergence of Oculus Quest 2 has changed the situation of insufficient hardware inventory in previous years, increasing shipments to the order of tens of millions in one fell swoop. As of November 17, 2021, the sales volume of Oculus quest 2 has reached 10 million units, more than 5 times that of the previous generation, making it the largest-selling VR model in history, and a model of mainstream VR products currently on the market, accounting for the total global shipments 75% of the amount. According to estimates from third-party platforms, it is estimated that by 2025, the global shipment of VR headsets will exceed 28 million units.

Only with hardware shipments can developers of VR games make money and further stimulate hardware consumption through content ecology. This is the reason why each company chooses the layout route from hardware to content ecology.

While developing hardware, Meta has also launched Horizon Worlds, a social VR application, in 2021, and has deployed VR and cloud games through the acquisition of game developers such as Beat Games.

The current actions of domestic companies such as acquiring hardware companies and establishing related departments are what Meta (then Facebook) did during the last wave of VR boom. Meta is now thinking about hardware research and development, how to create a device that can pass the “Visual Turing Test”. Although this is still a problem that requires more time, compared to Byte and Tencent, which have just set foot in the Metaverse hardware, Meta has come a long way.

Such troubles are a little extravagant for domestic chasers. The domestic Metaverse hardware shipments have not even reached the point where they can decline.

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