According to Meta, the metaverse will lose even more money in 2023

According to Meta, the metaverse will lose even more money in 2023

A year later, Meta’s foray into the metaverse has proven to be even more costly. Reality Labs is losing money faster than ever before, according to Facebook’s parent company in its most recent financial report.

Reality Labs, the division in charge of the company’s virtual and augmented reality initiatives, lost $3.7 billion in the third quarter of 2022, up from $2.6 billion the previous year and $2.8 billion the previous quarter. So far in 2022, Reality Labs has lost more than $9 billion. And, according to the company’s finance boss, the pattern is unlikely to change very soon. “We predict that Reality Labs operational losses will increase dramatically year over year in 2023,” stated departing CFO Dave Whener in a statement.

This is crucial since Meta’s big investment in Reality labs has already cost the corporation money. Meta claimed earlier this year that it will lose $10 billion in 2021 on Reality labs. The business also announced that the “next iteration of our consumer Quest headset” would be released “later next year,” implying a Meta Quest 3.

However, CEO Mark Zuckerberg said that investing in “the future computer platform” was still a major priority. “This is a tremendous operation, and it will often take many generations of each product before they become popular,” he said. “However, I believe that our work here will be historic in nature, laying the groundwork for a completely new manner for us to engage with one another and integrate technology into our lives.”

At the same time, he cautioned that the corporation may suffer “near-term revenue issues.” According to Zuckerberg, the company’s revenue for the quarter was $28 billion, which was in line with analyst projections but “still below where I believe we should be.”

Zuckerberg also indicated that Meta will continue to reduce employment as revenue growth slows. “Some teams will expand significantly, but the majority of other teams will remain stable or diminish over the next year,” he said. “In overall, we plan to conclude 2023 as around the same size, if not somewhat smaller, as we are now.”

In contrast, Meta’s “family of applications” has expanded, as Zuckerberg announced new milestones for both Instagram and WhatsApp: WhatsApp currently has 2 billion daily active users, while Instagram has 2 billion monthly active users. “There’s been a lot of conjecture about engagement on our applications,” he added, “and what we’re seeing is more positive.”

Zuckerberg also discussed his aim to transform the firm’s services into a “discovery engine,” where users’ feeds would be driven more by suggestions, which he believes will help the company compete with TikTok.

However, he also said that Meta’s pricey investments in the metaverse will ultimately pay off, given the company’s continued ad income troubles as a result of Apple’s adjustments. Investors have been dubious of Zuckerberg’s concentration on the metaverse, with one significant stakeholder recently declaring that the corporation had “lost investor trust.”

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