Facebook lost billions of dollars because of metaverse
Reality Labs, Facebook’s metaverse business, continued to struggle in the first three months of the year with a loss of nearly three billion dollars.
Meta, the parent company of Facebook, has just released its financial statements for the first quarter of 2022 with revenue increasing 7% year-on-year to $27.9 billion, profit also reaching nearly $7.5 billion and the same number of people. Daily use increased slightly again. However, the “black point” is a loss of $ 2.96 billion from Reality Labs.
Mark Zuckerberg has big ambitions in the metaverse. Image: Cnet
Reality Labs is a division that develops AR/VR devices and related software to serve the goal metaverse that CEO Mark Zuckerberg is pursuing. Last year, the division reported revenue of $2.3 billion, with a loss of $10.2 billion.
However, Zuckerberg thinks the loss is part of the plan. “While focusing on the biggest opportunity and challenge ahead, I think it’s important that Meta needs to build a new foundation for the next era of social technology,” the US billionaire said at the meeting today. April 28.
Reality Labs introduced Horizon Worlds – the virtual world that Zuckerberg sees as central to his metaverse strategy – in December of last year. However, the platform has yet to contribute anything to revenue.
During the tests since 2021, the platform received good feedback. As of mid-February, there were 300,000 users first after three months on the market. Going forward, Meta plans to add a web version of Horizon Worlds, allowing users to experience the virtual world without glasses.
“The product isn’t expected to be profitable until it actually hits the market. Once the market is strong, this will be a big revenue contributor,” Zuckerberg said. “Everything is just laid out now. What I’m looking forward to is 2030. It’s going to be a really exciting year.”
But until the fruits are “picked up”, Zuckerberg admits that investments in the metaverse will continue to cost the company billions of dollars. “I found it very expensive to build a metaverse, because it was something that had never been done before. I also felt it would take a long time for the metaverse to contribute to the growth of the company,” he said.
Zuckerberg decided to change the company’s name from Facebook to Meta in October last year with the ambition to enter the metaverse virtual universe. In a meeting with investors at the end of January, he said the company’s new VR headset will be released later this year at a high price, and revealed that it will continue to increase spending on Reality Labs in the coming years.
Bao Lam (according to Fortune)
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