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The world was shocked when Facebook founder Mark Zuckerberg announced he wanted to move into the metaverse, going so far as to rebrand the social media site as Meta.
Meta revealed its first quarter annual report for 2022 and things are not looking so hot for its metaverse plans.
According to a report by VentureBeat, Meta’s virtual reality department, called Reality labs, lost the company almost $3 billion. Meta still made profits over all, and hit its expected targets generating revenue of almost $28 billion for that quarter. The department made around $700 million which is an increase of around $150 million from the same quarter last year. While this seems a lot of money, in comparison to Meta’s overall profits is just a drop in the digital ocean.
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People have made plenty of memes about Zuckerberg’s Metaverse, check them out in the video below.
Many companies launch new ventures knowing they will operate at a loss. Epic Games launched the Epic Games Store in 2018, however, it doesn’t predict that the online store front will turn a profit until 2025. Until then Epic aims to support the new venture with the funds raised via Fortnite and sales of its game engine, the Unreal Engine 5.
Despite this it seems that the losses made by Meta’s Reality Labs is still extremely large for a new venture. An investigation by Kotaku, found that the department may have lost almost $20 billion since 2020. This includes reported losses of around $10 billion via its VR business for 2021, and a further $6 billion lost in 2020.
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These losses are due to costs required to set up the department. Meta has been continuing to spend enormous amounts of money on advertising, researching, building, and developing virtual reality headsets, apps, and social spaces. This is alongside the number of additional employees the company hired to work in the department.
Topics: VR