In October-December 2022, the loss of the Reality Labs division associated with the metaverse in the Meta structure amounted to $4.28 billion versus $3.3 billion in the fourth quarter of 2021.
The total loss of the business unit for the past year amounted to $13.7 billion (in 2021 – $10.2 billion).
Revenue of Reality Labs was reduced from $2.27 billion to $2.16 billion, for October-December — to $737 million from $877 million for the same period the previous year.
Meta CEO Mark Zuckerberg explained deterioration in the division’s financial performance with lower sales of Quest 2 headsets and a 20% increase in restructuring and employee compensation costs.
The founder and top manager of the company stressed that he found no reason to change the strategy of Reality Labs in the long term. Meta will continue to invest “significant funds” as it sees a growth driver in operating profit in the direction.
Zuckerberg predicted a rise in Reality Labs losses in 2023. He divided the business unit into three components:
- AR — here the company ran into a “research problem”;
- VR — there are certain successes and expansion of the product line on Quest Pro;
- Software, which, along with the social platform, can be the most important components in the work of the company.
Zuckerberg said more than 100 million WhatsApp users have created avatars on the app, with one in five using them as their profile picture. He saw this as an example of the integration of Reality Labs and Family of Apps, which includes the company’s platforms.
“While the majority of Reality Labs’ investment is going into future computing platforms—glasses, headsets, and software to run them—as technology advances, most people will see the metaverse for the first time on phones and start creating their digital identities through our apps.” he explained.
Meta’s CEO separately said that there are currently “more than 200 apps” available on the company’s VR gadgets, which have generated over $1 million in revenue. He did not specify the time period.
In general, Meta for October-December received revenue of $32.17 billion (-4.5% compared to the fourth quarter of 2021) and operating income of $6.4 billion (-49.2%).
Company announced to launch a $40 billion share buyback program and reduce operating expenses by $5 billion in 2023.
Thanks to the favorable background after the Fed meeting, investors reacted positively to the news from Meta.
The company’s shares in the post-trading session rose in price by almost 20%. Over the past year, the company’s capitalization has fallen by 51.12%.
Remember, in December CTO company and head of Reality Labs Andrew Bosworth acknowledged that it could be years before full-fledged AR glasses from Meta appear, despite billions of dollars of investment.
Earlier, the company urged politicians to refrain from regulating the metaverses.
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