Meta’s metaverse division lost $ 2.81 billion this quarter

Meta invested colossal sums in the creation of the metaverse. Unfortunately for the company, Reality Labs, the division dedicated to virtual and augmented reality, continues to lose money. The company announces a loss of $ 2.81 billion in a single quarter.

Meta’s Reality Labs record heavy losses

Meta, the parent company of Facebook, WhatsApp, Instagram and Messenger, has just released its financial results for the second quarter of 2022. For the first time in its history, the social media giant has recorded a drop in turnover.

This contracted by 1%, to $ 28.8 billion, compared to the same period last year. For its part, net profit fell 36% to $ 6.7 billion. After the announcement, the company’s share price fell 4%.

Meta suffers in particular from the severe financial losses recorded by Reality workshops, the division dedicated to the development of the metaverse. In a quarter, the division lost $ 2.81 billion. In total, Reality Labs has already lost $ 5.77 billion this year. During 2021 Meta had recorded a loss of 10.2 billion dollars.

We remind you that the division is entirely dedicated to the manufacture of headsets and other accessories for mixed reality, which combines virtual and augmented reality. He is in particular responsible for the brand’s Quest helmets. It also develops software infrastructures for digital worlds.

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Mark Zuckerberg reassures: Reality Labs will ultimately be profitable

Mark Zuckerberg, CEO and founder of Meta, admitted that Reality Labs isn’t profitable yet. He assures, however, that the technologies related to the metaverse will eventually bring a lot of money to his company. A study by Mckinsey also estimates that it will represent the metaverse up to $ 5 trillion by 2030.

“It is obviously a very expensive undertaking for the next few years. But as the metaverse becomes more important in every part of our way of life … I’m sure we will be happy to have played a big part in its construction. […] I am convinced that the development of these platforms will unlock hundreds of billions of dollars, even trillions of dollars, over time “says Mark Zuckerberg.

To reassure shareholders, Mark Zuckerberg nevertheless accepted budget cuts these last few months. The company then canceled its connected watch project with two cameras. This accessory was to accompany future connected glasses. Additionally, Meta delayed the release of its first pair of augmented reality glasses to 2024.

Reality Labs’ dire financial results come just days after the discovery of a study question the interests of consumers on the metaverse. According to the study, consumer expectations are out of step with the way the metaverse is designed.

Despite these setbacks, Mark Zuckerberg remains determined to pursue the development of digital worlds in virtual and augmented reality. A winning bet? We will find out in a few years.

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Sources: Meta, Mckinsey

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