Tech giant Meta unveils a $13.7 billion loss in its metaverse division Facebook Reality Labs (FRL) in the year 2022.
FRL reported a loss of $4.3 billion in Q4 2022, which was less than the estimate of $4.4 billion and higher than the third quarter’s loss of $3.7 billion. Meta’s FRL Division for the metaverse lost $2.81B in Q2 2022.
In total, Meta lost $13.7 billion in the division in 2022 on $2.2 billion in revenue, up from a loss of $10.2 billion on $2.3 billion in revenue in 2021.
Additionally, Meta reported Q4 FRL revenue of $727 million, up from $285 million in the third quarter but down from the division’s $877 million revenue in the prior year.
All departments and apps of Meta combined for $32.1 billion in revenue, exceeding the $31.53 billion expectation.
Last November, Meta prepared staff cuts as its grand metaverse ambitions cool-off as concerns resurfaced due to rising discontent among shareholders. Even Meta’s flagship Metaverse app Horizon Worlds struggled to attract new users.
CEO Mark Zuckerberg stated that he anticipates the Reality Labs ecosystem to expand dramatically over the following few years during an earnings call with analysts.
Later this year, Meta intends to release its newest consumer VR headset Quest 3. Zuckerberg stated it will “establish this technology as the baseline for all headsets going forward and eventually, of course, for AR [augmented reality] glasses as well.”
On the earnings call, Meta CEO Mark Zuckerberg described the forthcoming fiscal year as a “year of efficiency.” Zuckerberg emphasized that Reality Labs was not in danger of being shut down but rather was deserving to be prolonged.
Zuckerberg stated “Our priorities haven’t changed. The two major technological waves driving our roadmap are AI today, and, over the longer term, the metaverse.”
Last May, Mark Zuckerberg stated he expects that Meta’s metaverse play will result in a “significant” loss in the short term. He believes the metaverse plan will result in losses for up to 5 years, which will have a heavy impact on the company’s stock, but will be profitable in the long run.
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