Meta said in its earnings call after Wednesday’s close that its Reality Labs division, which houses virtual reality technology and projects, posted an operating loss of $4.28 billion in the fourth quarter, bringing an overall operating loss of 2022 amounted to 13.72 billion dollars.
It’s been a difficult first full year for the new company Meta, formerly Facebook. At the end of 2021, Zuckerberg changed the name of the company and said that its future will be in the Metaverse, a digital world where people can work, shop, play and learn.
Reality Labs reported $727 million in revenue in the fourth quarter and $2.16 billion in 2022, up from $2.27 billion in 2021, including sales of Quest headsets. In other words, the division lost more than six times its revenue last year, while accounting for less than 2% of Meta’s total sales.
Analysts had expected Reality Labs to post a quarterly operating loss of $4.36 billion on revenue of $715.1 million, according to StreetAccount.
As of early December, U.S. VR headset sales in 2022 will fall 2% from the previous year, according to data provided to CNBC by research firm NPD Group.
In July, Meta announced a $100 price increase for its Quest 2 VR headset. The company said at the time that the price increase was necessary to combat inflationary pressures. In October, Meta released the more expensive Quest Pro VR headset, selling it to companies as a corporate work device for $1,500. Meta is having a $400 discount sale on their high-quality VR headset this week for a limited time.
Last summer, Zuckerberg told CNBC’s Jim Cramer that he hopes that by the second half of this century, “about a billion people in the metaverse will be engaged in multi-hundred-dollar trading.”
But before the Facebook founder’s dream becomes a reality, Meta must spend billions of dollars developing the virtual reality and augmented reality technologies that underpin the concept of the metaverse.
The company said last year that it expects “Reality Labs’ operating losses in 2023 to increase substantially from last year.”
“After 2023, we want to accelerate the pace of Reality Labs investment so that we can meet our goal of increasing the company’s overall operating income over the long term,” Meta said at the time.
Shareholders are still dissatisfied with the results. Meta lost almost two-thirds of its value last year due to a cost spike on Metaverse, which lost almost two-thirds of its value last year due to a sluggish economy, increased competition from TikTok and privacy updates from Apple, limited ad targeting in main network of the company. advertising business.
On Wednesday, the company reported fourth-quarter results that beat earnings analysts’ expectations and announced a $40 billion share buyback that saw the stock surge more than 17% after hours.
The data is a snapshot in real time. *Data is delayed by at least 15 minutes. Global business and financial news, stock quotes, market data and analysis.
Post time: Mar-27-2023