Meta Lost $13.7B on Metaverse Initiative in 2022

Reality Labs’ losses are expected to rise in 2023, according to Meta.

Reality Labs lost $13.7 billion in 2022 as a result of Mark Zuckerberg’s Metaverse purchase in the middle of a continuous bear market.

According to Meta‘s earnings release, the company’s metaverse arm lost $4.28 billion in the fourth quarter, lowering its total for the year.

In the fall of 2021, Facebook was renamed as Meta as Zuckerberg increased his attempts to establish a digital universe where people may work, buy, play, and study. However, as Metaverse adoption slows in 2022 due to volatile market conditions, the company’s investors have called for a reduction in spending in the segment.

Reality Labs earned $727 million in the fourth quarter, bringing its total revenue for the year to $2.16 billion, a decrease from $2.27 billion in 2021. Despite the losses, the CEO has no intentions to alter the company’s long-term strategy in the field. “Our priorities haven’t altered since last year,” he added. Today, the two key technology waves driving our roadmap are AI and, in the long run, the metaverse.”

Quest Pro, the company’s first mainstream mixed reality gadget, was released at the end of last year. The goal, according to Zuckerberg, will be to “deliver better social experiences than what’s currently possible on phones.”

A next-generation consumer headset called “Meta Reality” is also expected to hit the market later this year, which the executive believes has the potential to “establish the technology as the baseline for all headsets going forward.” AR Glasses will also be available around the same time.

Zuckerberg also stated that there are over 200 apps on VR devices that have generated $1 million in revenue.

Reality Labs’ losses are expected to continue. During a follow-up question during the results call, Meta CFO Susan Li stated that the business anticipates the metaverse division’s full-year losses to grow in 2023. The executive stated that the company intends to spend “meaningfully” in this sector, noting enormous long-term prospects.

“It’s a long-term investment, and our investments here are supported by the need to drive overall operating profit growth while we’re making these investments.”

Meanwhile, Judge Edward Davila of the United States District Court for the Northern District of California granted Meta permission to acquire Within, a virtual reality company.

The digital behemoth had planned to buy the company, as well as its fitness app Supernatural, in order to acquire a serious challenge to its metaverse vision. The Federal Trade Commission (FTC) filed a lawsuit against Meta and Zuckerberg in an attempt to halt the move.

Despite the fact that the federal judge denied the FTC’s injunction, he imposed a temporary restraining order to prevent Meta from concluding the acquisition for at least a week.