Meta recorded a whopping loss of $3.67 billion through its Metaverse research and development arm Reality Labs for the third quarter of 2022. The firm expects deeper losses in 2023.
Reality Labs also made $285 million in revenue for the third quarter, but it’s the lowest on record. Meta’s push towards the metaverse marked its third straight quarterly loss totaling $9.44 billion in 2022 so far. Market watchers say the firm is on the straight path as it beat its 2021 losses on its metaverse play which saw $10 billion in losses.
Dave Whener, Meta CFO, during the earnings call said the firm anticipates that Reality Labs operating losses in 2023 will grow significantly year-over-year. He outlined that Meta expects to pace Reality Labs’ investments beyond 2023. The firm wants to achieve its goal of growing overall company operating income in the long run.
However, CEO Mark Zuckerberg is unfazed by Meta’s big investment and has called it the next computing platform. It is Meta’s top priority. Zuckerberg told investors that building a Metaverse and its related hardware is a massive undertaking. He outlined that it will take a few versions of each product before they become mainstream. The CEO believes their work is going to be o historical importance and create the foundation for an entirely new way that will interact with each other and blend technology into lives as well as the foundation for the long term of their business.
As Meta continues to see huge losses but still bets big on its virtual world, some investors urged the firm to scale back it investment. Brad Gerstner, the founder of technology investment firm Altimeter Capital and Meta shareholder, wrote to Zuckerberg that Meta’s investment in an unknown future is super-sized and terrifying. He believes it could take a decade for its Metaverse to start making a profit, as such, the firm should focus on an artificial intelligence offering that has the potential to better the company’s results.