Meta’s Metaverse Losses Surpass $50 Billion

In its second-quarter report, Meta disclosed a $4.48 billion loss for its metaverse division, Reality Labs.

The cumulative losses of the division since the end of 2020 are estimated to exceed $50 billion, including:

• 2020 — over $6 billion;
• 2021 — $10 billion;
• 2022 — $13 billion;
• 2023 — $16 billion.

“A few years ago, I would have predicted that holographic AR would arrive before smart AI, but now it seems these technologies will be ready in reverse order. We are well prepared for this thanks to the investments in Reality Labs we have already made,” remarked Meta CEO Mark Zuckerberg during a conference dedicated to the financial report.

According to several Yahoo Finance sources, in June, Reality Labs laid off about 100 employees, including vice presidents, managers, and developers. Some “major projects” were cancelled.

Reality Labs’ revenue amounted to $353 million, a 28% increase from last year’s figure of $276 million. It is primarily generated from sales of Quest VR headsets and Ray-Ban smart glasses.

In July, Zuckerberg noted the growing popularity of smart glasses, predicting that eventually tens or hundreds of millions of people will wear them.

The corporation’s overall financial performance for the second quarter exceeded expectations, with revenue of $39.07 billion and a net profit of $13.47 billion.

In the first quarter, Reality Labs lost approximately $3.8 billion, generating $440 million in revenue.

Earlier reports indicated Zuckerberg’s intention to cut the metaverse division’s budget by 20%.

In October 2021, Facebook underwent a major rebranding, changing its name to Meta and announcing a shift in focus from social networks to developing a metaverse with VR and AR headsets.