Metaverse-focused Meta unit’s loss rises to $3.7 billion

In July–September 2022, the metaverse-focused Reality Labs unit within Metaposted a loss of $3.7 billion ($9.4 billion since the start of the year).

The unit’s revenue was $285 million, compared with $558 million for the same period last year.

In 2021, Reality Labs posted a loss of $10.2 billion on revenue of $2.3 billion.

Management said they do not expect the division’s operating losses to rise significantly next year, according to the press release.

Ahead of the quarterly report, Altimeter Capital Managementwrote an open letter to Meta chief Mark Zuckerberg with proposals to cut staff by at least 20%, trim investments by at least $5 billion, and cap spending on Reality Labs at $5 billion per year.

During aanalysts’ briefing, Zuckerberg said that Reality Labs strategy envisions not only developing the virtual reality business but also initiatives in augmented reality and neural interfaces.

“Many may disagree with investments in the metaverse, but … this will be a very important thing. It would be a mistake on our part not to focus on any of these areas. They will be fundamentally important in the future,” he explained.

On October 15, The Wall Street Journal, citing people familiar with the matter, reported that Horizon Worlds’ monthly active users had fallen below 200,000. The company had targeted 500,000.

Earnings per share in the third quarter were $1.64, down 49% year over year, versus a consensus of $1.89.

Meta Platforms shares fell 20.5% in the premarket session. Trading on October 26 closed down 5.6%. Since the start of the year, the social platform’s market capitalization has fallen about 61.4% (as of October 26).

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In July, the Federal Trade Commission filed suit against Meta seeking to block the company’s acquisition of startup Within Unlimited, which develops a fitness app for virtual reality Supernatural.

In October Meta confirmed that it regards the metaverse as the future for humanity.

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