Meta Platforms (META) Introduces New Account & Profile for VR

Meta Platforms META will now require users to create a Meta account and Meta Horizon profile to log into their virtual reality (VR) headsets instead of a Facebook account (beginning August 2022) or an Oculus account (beginning Jan 1, 2023).

The new Meta account and Meta Horizon profile promise better privacy controls. For instance, teenagers (ages between 13 and 17) will have their Meta Horizon profiles set to private by default. Meta is offering three privacy control options to users — Open to Everyone, Friends and Family, and Solo.

VR headsets are essential for accessing metaverse, a space that has become the company’s key focus in recent times due to the huge growth opportunities it presents. Meta is expected to spend more than $10 billion over the next 10 years to build the metaverse.

The metaverse market, globally, is expected to reach $800 billion by 2024, per a Bloomberg report. According to a latest report from Fortune Business Insights, the global metaverse market is expected to witness a CAGR of 47.6% between 2022 and 2029, reaching from an estimated $100.27 billion in 2022 to $1,527.55 billion by 2029.

Meta has been a frontrunner in grabbing this opportunity, given its experience in developing devices like the Quest headset. Meta is also set to release the higher-end headset — Project Cambria — later this year, which is anticipated to help it retain the leading position in the Augmented Reality/VR device space.

Meta Platforms, Inc. Price and Consensus

Meta Platforms, Inc. price-consensus-chart | Meta Platforms, Inc. Quote

Additionally, Meta is anticipated to launch a digital clothing store where users can purchase designer outfits for their avatars in the metaverse. Brands like Balenciaga, Prada and Thom Browne will be initially available for purchase.

What Awaits the Meta Stock in 2022?

Meta is having a terrible 2022, primarily attributable to engagement-related headwinds as well as changes made by Apple AAPL in its iOS that have made ad targeting difficult. Intensifying competition for ad dollars and user engagement from the likes of SNAP SNAP, Twitter TWTR and TikTok have been other headwinds.

Shares of this social-networking giant are down 49.2% year to date, underperforming the Zacks Computer & Technology sector, which has dropped 27.5% over the same time frame. Snap shares are down 68.2% while Twitter’s has declined 14.9%.

The ongoing Russia-Ukraine war has hurt advertisers’ budgets. Rising inflation, as well as slowing economy, is expected to trigger budget cuts. This doesn’t bode well for Meta and its ad-revenue-dependent peers like Twitter and Snap.

Nevertheless, Snap is benefiting from improving user engagement, particularly in the 13-34-year-old demography, which is expanding its advertiser base. Snap is also providing competition to Meta in the metaverse. Snap has collaborated with Vogue to feature a virtual try-on experience of select pieces from Balenciaga, Dior and Gucci, which will be available for Snapchatters globally.

Meta expects engagement headwinds and ad-targeting difficulty due to Apple’s iOS changes to hurt advertising revenue growth throughout 2022. This Zacks Rank #4 (Sell) company’s second-quarter guidance also reflects macroeconomic and forex concerns.

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