Meta Expects To Lose More Money on Developing the Metaverse Next Year
- Kyle Chua
- Oct 27, 2022
- 2 min read
Meta could have a tough year ahead of it as development costs for its ambitious metaverse project continues to eat into its earnings.
Reality Labs, the division responsible for developing virtual reality and augmented reality experiences, lost US$3.7 billion in the third quarter of 2022, as the parent company of Facebook disclosed in its earnings report. The figure is up from the US$2.6 billion loss the company recorded a year ago and the US$2.8 billion last quarter.
The division has lost more than US$9 billion so far in 2022, and it’s not expected to get any better next year. “We do anticipate that Reality Labs operating losses in 2023 will grow significantly year-over-year,” said outgoing CFO Dave Whener in a statement.
Meta CEO Zuckerberg, however, wants to stay the course, telling investors that he expects the metaverse project to pay returns in the future. “I appreciate the patience,” he said. “And I think that those who are patient and invest with us will end up being rewarded,” he said.
The executive also said the metaverse will be “of historic importance and create the foundation for an entirely new way that we will interact with each other and blend technology into our lives”.
The forecast slashed over US$67 billion off Meta’s stock market value in extended trade. It comes as the company battles with slowing growth brought about by a number of factors, including stiffening competition from TikTok, privacy changes from Apple and metaverse-related expenses. The social media giant has so far lost more than half a trillion dollars in value this year.
Meanwhile, Meta reported $28 billion in revenue for the quarter, which wasn’t far from analyst forecasts. The company also announced plans to consolidate offices and keep its headcount flat through the end of 2023.
Reality Labs, the division at Meta responsible for developing virtual reality and augmented reality experiences, lost US$3.7 billion in the third quarter of 2022, as the company disclosed in its earnings report.
The division has lost more than US$9 billion so far in 2022, and it’s not expected to get any better next year.
Meta CEO Zuckerberg, however, wants to stay the course, telling investors that he expects the metaverse project to pay returns in the future.
Meanwhile, Meta reported $28 billion in revenue for the quarter, which wasn’t far from analyst forecasts.
