Metaverse: Facebook has become a social media powerhouse, raking billions for creator Mark Zuckerberg.
Rather than waste away, the social media platform evolved with the times, finding ways to become appealing to users of all ages.
The world is currently at the peak of technology, and the digital space continues to expand.
The metaverse has been a hot topic among tech giants for the past few years, and Meta (Facebook’s parent company) has been working on jumping in.
However, the efforts come at a steep price, and Zuckerberg is losing billions.
The news
On Wednesday, Meta shares increased by over 19% in after-hours trading.
The positive numbers came after a hopeful quarterly earnings report that performed better than expected.
However, the report wasn’t enough, as Meta was unable to lift its troubled metaverse division.
Meta announced that Reality Labs, the company’s metaverse-focused division, lost a staggering $4.28 billion in the final fiscal quarter of 2022.
The announcement marked a new low for the department, which had already been struggling, as it was initially touted as the company’s future.
The Wednesday announcement brings up the metaverse division’s total 2022 losses to a jaw-dropping $13.72 billion.
In the final months of 2022, the department only brought in $727 million in revenue.
The numbers were down 17% from revenue posted in the same period the previous year.
The division
Reality Labs is a Meta business and research unit.
It produces virtual and augmented reality hardware and software, having developed VR headsets like Quest and the online platform Horizon Worlds.
Some positivity
While Meta produced terrible numbers, leadership was surprisingly upbeat.
During the quarterly earnings call on Wednesday, they exhibited high spirits due to the company beating overall revenue, daily active users, monthly active users, and average revenue per user forecasts.
A standout in the call revealed the company pulling $32.1 billion in revenue across every department and app, going beyond the revenue forecast of $31.53 billion.
Read also: Meta to Shift Metaverse Development Plans by Reducing Number of Engineers Hired
The layoffs
Meta CEO Mark Zuckerberg called the upcoming fiscal year on the Wednesday earnings call a year of efficiency.
It was kickstarted by his decision to lay off 11,000 employees three months ago.
Despite the loss of workforce, Zuckerberg asserted that Meta would remain disorganized despite the layoffs.
“We’re going to be more proactive about cutting projects that aren’t performing,” said the Meta CEO.
Continued investment
Although the metaverse development team cost the company billions, Mark Zuckerberg clarified on Wednesday that Reality Labs was safe from layoffs.
He said that despite the losses, the department was worth continuing, hinting at potential increased investment.
“Our priorities haven’t changed,” said Zuckerberg.
“The two major technological waves driving our roadmap are AI today, and, over the longer term, the metaverse.”
The Meta CEO also expressed optimism about the next-generation VR headset, the Quest 3.
The headset is set to hit markets later this year.
“I expect [Quest 3] will establish this technology as the baseline for all headsets going forward,” said Zuckerberg. “And eventually for AR headsets as well.”
Meta and Zuckerberg are hoping the headset will increase revenue for the metaverse division and popularizes the Horizon Worlds virtual reality ecosystem.
Horizon World was initially touted as the future for interactive business, social interaction, and entertainment.
October problems
Mark Zuckerberg put Horizon Worlds on quality lockdown late last year due to persistent bugs.
Upon its initial launch, the graphics were widely mocked, prompting the CEO to issue an apology.
At the time, Meta employees rarely used the metaverse platform despite orders to use it at work and home.
They later underwent a quality lockdown to address issues with Horizon World’s appearance and functionality.
Last year, Meta shared expectations that Reality Labs’ operating labs in 2023 would grow significantly annually.
“Beyond 2023, we expect to pace Reality Labs investments such that we can achieve our goal of growing overall company operating income in the long run,” they added at the time.
Image source: Financial Times
