Facebook’s parent company Meta is having a decent day today after beating its revenue and user activity forecasts for the final fiscal quarter of 2022. But its VR division isn’t helping the company make money. In fact, it is costing the company billions in losses.
While it’s true that Meta’s stock is rising In after-hours trading today, after sharing relatively positive fourth-quarter financial results, VR division Reality Labs had less positive news to share as it continues to blow money at a shocking rate. Today, the company confirmed that it lost over $4 billion on VR and metaverse development in the last quarter of 2022. And overall, it lost a lot more $13 billion in 2022 trying (and failing) to build a metauniverse people will flock to.
By comparison, Meta generated $32.1 billion in revenue across all segments and applications.
As reported by Decrypt.co, Meta’s Reality Labs brought in just $727 million in revenue in the final months of 2022. That’s not great compared to the billions spent on the division in the same year, but it’s also worse than you might imagine. That figure is down 17% from the segment’s revenue in the same period in 2021. Ouch.
Also remember that Facebook’s top metaverse software, Horizon Worldsit was essentially a huge drop, with reports that Most of the worlds in it are empty and barely playable. Not only that, but the company’s employees barely use it, with a leaked internal memo showing that Meta staff don’t enjoy using Horizons Worlds because it is full of bugs and other quality problems.
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Really the only big success story from Reality Labs is the Oculus Quest 2 headset, which was seen by many as an affordable alternative to expensive PC and console VR headsets and was also completely standalone. But in July Meta raised the price of this affordable handset by $100with the 128GB model now costing $400 and the 256GB version now $500.
In November 2022, Meta laid off 11,000 employeesblaming Covid, “macroeconomic recession, increased competition and loss of advertising signal”. Zuckerberg blamed himself for the layoffs, but conveniently didn’t mention in its layoff announcement how much money the company continues to spend on VR and metaverse development. In recent years the company has spent tens of billions of dollars trying to transform the VR-powered metaverse.
And now, in February 2023, after massive layoffs and constant losses, it has only an unattractive and empty PlayStation Home clone to show for all his woes.