Zuckerberg’s Metaverse Division Suffered Losses Of $13.72 Billion In 2022

On Wednesday, after-hours trading saw an 18% increase in the shares of Meta, after its quarterly earnings report turned out to be better than expected.

However, the rising tides across the company could still not give the struggling Metaverse division of the tech giant the much-needed boost.

Losses

Reality Labs, which is the Metaverse-focused division of the firm, recorded losses of a staggering $4.28 billion in the final fiscal quarter of 2022.

This makes it a new low for the division of the company, which Meta has touted as its future. The announcement on Wednesday brought the total losses of the metaverse division in 2022 to a whopping $13.72 billion.

The final months of 2022 saw the division generate revenue of only about $727 million, which was a 17% decline from the revenue generated in the same quarter a year earlier.

The focus of Reality Labs is designing software and hardware for augmented and virtual reality experiences, which include the Horizon Worlds metaverse project and the virtual reality headset called Quest.

Even though the figures were rather abysmal, the leadership at Meta appeared to be in very high spirits on Wednesday on their quarterly earnings call.

The company’s stance

This was not surprising, given that the company was able to beat its overall forecasts for monthly active users, daily active users, revenue, and average revenue per user.

Most importantly, the company’s total revenue from all apps and departments was around $32.1 billion, while forecasts had predicted revenue of about $31.53 billion.

On the earnings, all on Wednesday, Mark Zuckerberg, the chief executive of Meta, said that the upcoming fiscal year would be a ‘year of efficiency’.

This is because the company has already started it by laying off about 11,000 people from its workforce in November.

According to the CEO, the company would be able to stay scrappy in any way possible, other than those layoffs.

He stated that they would be more proactive and would eliminate projects that are not delivering any performance.

But, it appears that the company’s embattled metaverse ambitions don’t fall in this category.

The priorities

Zuckerberg clarified on Wednesday that Reality Labs was not going to be eliminated, but it would be continued and they just might increase their investment as well.

The founder said that their priorities remained the same. He said that the two prominent technological waves in their roadmap were AI currently and metaverse in the long term.

The tech mogul was particularly optimistic about the next-generation VR headset of the company, the Quest 3, which is scheduled for launch later this year.

He said that the headset would help in establishing the technology as the foundation for all headsets to come and would eventually also lead to AR headsets.

Meta is counting on the headset to give their hardware revenue a boost and also increase the popularity of their Horizon Worlds virtual reality ecosystem, which had been touted as the future of social interaction, entertainment, and interactive business.