It has been one of the worst times to be a Meta Platforms (META -1.41%) investor, with the stock down a whopping 70% since hitting an all-time high in the latter half of 2021.

Amid difficult times for tech stocks and Meta specifically, CEO Mark Zuckerberg recently sat down with Andrew Ross Sorkin at the New York Times Dealbook Summit for an interview on Dec. 2. In addition to conducting the first part of the interview in the current incarnation of the Metaverse, Zuckerberg also laid out in better detail what's going on with Meta's controversial spending, where it's going, and what the potential payoff could really be.

This was more detail than Meta has shared on recent earnings calls and provided an encouraging scenario for the platform, even in a downside-case scenario.

Investors don't like the Metaverse spending

With Meta's core social media platforms facing an advertising slowdown, investors are really nervous about Meta's billions in spending on the Metaverse, especially since the term "Metaverse" is still an imprecise concept many investors can't easily compare to other services today.

Through the first nine months of 2022, Meta has already taken a $9.5 billion operating loss in its Reality Labs segment. Even more frightening to some, management projected those losses would "increase significantly" in 2023 before moderating beyond that.

That is certainly a concerning amount of money, especially with such an amorphous payoff that may be years down the road. This is why more disclosures about what the Metaverse really is and can be, in Meta's eyes, are so important for investors.

Xbox, at the very least?

In the interview, Zuckerberg outlined three very general buckets of Meta's current Metaverse spending. The smallest, or about 10%, is going toward the software development to create the virtual worlds early Metaverse adopters are now occupying. About 40% is going toward the virtual reality headsets, which Meta is selling right now, and which generated $1.4 billion in revenue through the first nine months of the year.

The final 50% is invested in a bigger vision of augmented reality (AR) glasses, which project realistic holograms into one's field of vision. This is Zuckerberg's view of the "next computing platform," in which one might be able to have a conversation with someone across the country or the world, in realistic detail, with a sense of presence as if the person is sitting in the same room. That last bit is certainly the most ambitious and potentially has the biggest payoff, but it is a further way off.

However, the virtual reality segment, or the second 40% of the investment, may have a more tangible payoff sooner than some skeptics might think and may give investors something to hold on to. Zuckerberg pointed out the current VR investment is roughly similar to what Microsoft (MSFT -0.45%) invested at the height of developing its Xbox game console in the 1990s. Zuckerberg compared the current Quest sales to that of a game console, saying:

You know, obviously we don't aspire to just build a game console, we want it to be a general computing platform, but I think it's pretty likely that, you know, downside case is that's where it turns out. And, you know, I don't think Microsoft regrets building the Xbox.

Zuckerberg is probably right on that front. Microsoft's gaming revenue in its most recent fiscal year ending last June was $16.2 billion. That does, of course, incorporate some of Microsoft's owned software games as well as console sales and Xbox pass subscriptions, but it's still a solid amount of revenue, likely with high profitability, coming in each and every year to the tech giant.

If the Quest can sell more headsets, it's also likely Meta would be able to develop or buy VR game studios as well. If this is the downside, it wouldn't be the worst thing for Meta shareholders. In any case, the mention of a "downside case" is something value investors probably enjoyed hearing.

Meta has more ways to win than lose at these levels

At its current valuation, there is not a lot of optimism for any growth in Meta's stock. Shares trade at just 12 times trailing earnings, and those earnings incorporate those billions in Metaverse losses. Not only that, but the core Family of Apps business is going through a weak period as well, as the digital advertising market has slowed this year.

Meta is also growing its Reels product to better compete with TikTok, which appears to be succeeding. However, that initially monetizes at lower levels than the news feed or stories, so that investment will also cause revenue headwinds before it scales up.

Zuckerberg noted in the interview that the Reels product on Instagram/Facebook had already reached half the viewing time of TikTok outside of China. While that may not seem like much to some, considering that figure was basically at zero to begin this year is something to commend. The good part here is that Meta has successfully pivoted its products before -- from desktop to mobile and then news feed to stories ads, just to name a few. So, it's likely it will be able to monetize Reels as well.

So, headwinds in the core business, as well as the Metaverse losses, are all playing into current depressed results, and the stock also trades at a below-market multiple as well.

If even one of these negative headwinds turns around -- an improvement in the economy, better monetization of Reels, increased monetization of WhatsApp, or maybe even some positive signs of traction for early Metaverse applications -- the stock has a good chance of appreciating off these low levels next year.