BlocksInform
Mark Zuckerberg's Metaverse offer turned out to be costly for the company in the middle of a persistent bear market as Reality Labs lost $13.7 billion in 2022.
According to Meta’s earnings release, the company’s metaverse arm recorded an operating loss of $4.28 billion in the fourth quarter, dragging down its total for the year.
Facebook was renamed meta in the fall of 2021 while zuckerberg stepped up efforts to create a digital world where people can work, shop, play and learn. However, as the adoption of metavers slowed in 2022 due to market turbulence, the company's investors called for a reduction in expenses in the segment.
Billions of dollars worth of metavers.
In Q4, Reality Labs generated $727 million and revenues for the full year were $2.16 billion, down from $2.27 billion in 2021. Despite the losses, the CEO has no intention of changing the long-term course of the business. He said,
“Our priorities haven’t changed since last year. The two great waves of technology driving our roadmap are AI today and, in the longer term, metaverse."
The company shipped Quest Pro late last year, which is presented as the first consumer mixed reality feature. Zuckerberg maintained that emphasis will be placed on "offering better social experiences than what is possible today on telephones."
The next generation of consumer headphones should also arrive on the market later this year under the name "Meta Reality", which, according to the executive, can potentially "establish technology as the reference base for all headphones in the future." AR eyewear will also be shipped to the same time period.
Zuckerberg also pointed out that there are over 200 applications on virtual reality devices that have been successful in generating $1 million in revenue.
Losses for going forward?
There is an expectation that losses to reality labs will continue. While answering a follow-up question during the earnings call, Meta CFO Susan Li said the company expects the full-year losses for the metaverse division to increase in 2023. According to the executive, the company plans to invest "significantly" in this area, citing significant opportunities in the long run.
“This is a long-term investment, and our investments here are supported by the associated need to boost the overall growth of operating profits while we make these investments."
Meanwhile, Meta received approval from Judge Edward Davila in the United States District Court for the Northern District of California to acquire a virtual reality company – Within.
The technology giant had planned to buy the company, along with its supernatural fitness application, to acquire a major threat to its metaverse vision. In an attempt to block the movement, the federal commercial commission (ftc) filed a trial against meta and zuckerberg.
Although the federal judge refused the FTC injunction, he issued a temporary restraining order to stop Meta from concluding the case for at least a week.
