Video Games

Meta is Losing Billions on the Metaverse, And It’s Not Getting Better

Meta, the Facebook and Quest company, is now raking coal by investors as it suffers another huge quarterly loss in its VR and Metaverse divisions.

The company’s quarterly results revealed that its Reality Labs division, which covers its VR and XR efforts and its Metaverse efforts, posted an operating loss of $3.7 billion. But that was a very big loss for the division, but it comes from a long history of losses that come back quarter after quarter, and the same division has so far this year compared to his $6.9 billion in the same period last year. He has incurred losses of $9.4 billion.

However, this does not appear to be directly linked to a significant drop in revenue. Company-wide revenue for the quarter was $29 billion, down just 4% year-over-year. But the Reality Labs segment alone brought him only $285 million in revenue, meaning Facebook’s “Family of Apps” division (which handles Facebook, Snapchat, etc.) was a big part of the company. increase. Simply put, Meta’s VR and Metaverse efforts have barely made a profit compared to how much Meta spends on them.

And ready to spend even more. On top of next year’s announcement of a new consumer Meta Quest headset and associated spending, Meta said it expects the division’s operating loss to increase “significantly.”

“Infrastructure related” costs are also expected to play an even larger role.

Meta doesn’t have many good answers

At this point, it doesn’t seem like Meta has many good answers for shareholders who are upset about spending so much money. In its earnings outlook, Meta said it had “enhanced scrutiny across all areas of its operating expenses,” but said it would take time for the scrutiny to really impact the numbers. Given in part, it is Sounding more and more like this could mean layoffs.

And in the earnings call, multiple shareholders raised the issue of spending, but perhaps not for a while, as leadership suggested it could take time for the Metaverse effort to pay off. However, Mehta has repeatedly reassured that he is confident the investment will pay off in the end. .

It wasn’t long ago that the very idea of ​​the Metaverse was slammed from all sides when Meta unveiled its premium headset, the Meta Quest Pro, with a hefty price tag of $1499.99. At the same time, Zuckerberg and Meta were quickly mocked by the internet for their ridiculous visuals in their employee metaverse, Horizon Worlds. Apparently none of its employees really enjoy using it. It’s not how you want to spend your time.”

Meta stocks are currently under the influence of earnings releases. At the time this article was written, he had fallen 19% to $105.30 in after-hours trading. That’s the lowest price the company has seen this year.

Rebekah Valentine is a news reporter for IGN. you can find her on her twitter @duck valentine.

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