Meta, the social media platform, reported that the Reality Labs Unit of its metaverse division is losing a lot of money. In its most recent earnings call, Meta stated that while Reality Labs had a sales volume of more than $400 million, it suffered losses of $2.8 billion due to high-end VR products and research costs.
Meta’s Metaverse Push Is Making It Lose Funds
Meta was one of the first to announce a shift from social media to metaverse. It is now trying to become a profitable company. The company’s most recent earnings call reported on Q2 economic performance. It stated that Reality Labs, its metaverse division had suffered a loss of more than $2.8 Billion dollars. This despite registering more than 400 million sales.
Reality Labs oversees the company’s metaverse strategy. They also develop and research augmented and virtual reality products. The monetization of Meta’s metaverse initiatives is still a work in progress, with its flagship VR app, Horizon Worlds, opening its monetization options to users, with the company keeping up to 50% of each sale.
Positive Predictions
Meta’s outlook for Q3 2022 is also negative. This prediction was made by the company because:
Continued weak advertising demand environment during the second quarter. We believe this is due to wider macroeconomic uncertainty.
Mark Zuckerberg, CEO of Meta, also hinted at the possibility of layoffs during the next year, stating that “this is a period that demands more intensity and I expect us to get more done with fewer resources.” The company reported having increased its workforce by 32% since last year, with its headcount reaching 83,553.
Zuckerberg stated in July that he would slow down his company’s recruitment strategy and raise performance standards for Meta employees.
According to the company’s metaverse projections, Reality Labs will continue to lose money during the next quarter. Zuckerberg has described the metaverse pivot as an investment group that will last a long time. He believes the metaverse will grow in time and house billions of people who will all be transacting in it. Each transaction will then be monetized.
What do you think about Meta’s latest earning call and losses via the metaverse business? Leave a comment below.
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