Reinforcing Financial Growth in Metaverse Organizations: A Governance-Driven Approach to Leveraging Technological Advancements in the United States of America (USA)

Abstract

A key practical problem in the financial performance (FP) of metaverse organizations in the United Stats of America (USA) is the massive investment losses faced by leading firms like Meta Platforms. Meta’s Reality Labs, which drives its metaverse initiatives, reported a $17.7 billion operating loss in 2024 despite generating $2.1 billion in revenue. Since 2020, the division has accumulated over $50 billion in losses. These financial struggles highlight concerns regarding corporate governance in metaverse firms. Poor governance structures, lack of accountability in investment decisions, and uncertain revenue models are key factors that challenge sustainable FP. Stronger governance frameworks could help optimize spending, improve investor confidence, and drive profitability in this evolving sector. Therefore, the primary objective of this study is to investigate the influence of corporate governance elements like board size, board independence, number of board meetings, audit quality and audit committee on the FP of metaverse organizations in the USA. DataStream database and annual reports were used to extract data regarding board size, board independence, number of board meetings, audit quality and audit committee, FP and technological innovation. The current study employed a sample size of 40 metaverse companies in the USA from 2014 to 2023. Results of the study proved the positive contribution of corporate governance and technological innovation to the FP of metaverse companies in USA.