Meta’s Reality Labs continues to struggle.
Mark Zuckerberg’s metaverse baby child seems to continue to bleed. The division responsible for the company’s virtual and augmented reality developments, Reality Labs logged a $3.7B loss per the company’s Q2 earnings report.
Meta loses big for metaverse
Meta, formerly known as Facebook, released its second quarter earnings report on Wednesday.
According to the report, the company had one of its best quartets recording an 11% year-on-year growth which gave investors a sigh of relief.
The positive outlook of the company’s revenue has been connected to Meta laying off 20,000 employees, making personnel cost much lower. Despite the negative sentiments surrounding the downsizing, investors seemed pleased.
However, Meta’s Reality Labs Unit—the department responsible for augmented and virtual reality, and the company’s metaverse software platform—suffered a huge loss totalling $3.7B in the second quarter.
Meta’s VR and AR products brought in just $276M in Q2, down from the $339M in revenue it brought in Q1.
The unit loss over all of 2022 stood at $13.7B, while it brought in a total of $2.16B in revenue. This puts the totally losses at about $21.3B since the beginning of last year.
Read more: 2023 Q2 crypto industry report: 4 key insights
More losses to come
Meta CFO Susan Li notes that the company expects Reality Labs’ operating losses to increase. The public continues to seem uninterested in Meta’s plan for a metaverse. This quarter, Apple announced its $3,499 Vision Pro AR headset, joining the AR/VR fray. Although the typical customer is not nearly able to afford this eagerly anticipated item, Meta is preparing for the fall when it will debut its Quest 3 headset in competition with Apple. It’s priced at $499, a competitive edge.
Meta said in its earnings report that it expects operating losses in its Reality Labs unit “to increase meaningfully year-over-year due to our ongoing product development efforts in augmented reality/virtual reality and investments to further scale our ecosystem.”
Like in previous quarters, Reality Labs’ loss was more than offset by Meta’s “Family of Apps” section, which comprises Facebook, Instagram, Messenger, WhatsApp, and other services. For the entire second quarter, that group reported earnings of about $13.1B.
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