Meta’s Reality Labs lost $13.7 billion on VR and AR last year
Mentions of the “metaverse” were relatively few and far between in Meta’s quarterly earnings call this week — we counted a mere seven mentions compared to 23 for “AI” — but the company’s investment into its vision of a VR-connected social future remains colossal.
For the sake of financial reporting, Meta’s Reality Labs lost started separating its Reality Labs VR and AR branch into its own sector in 2021. It is now easy to view the astonishing amounts of money that Meta is investing in certain areas.
In contrast to the already staggering $10.2 billion it invested in the business in 2021, Meta announced operational losses for Reality Labs of $13.7 billion for 2022. Revenue for Reality Labs dropped from $2.27 billion in 2021 to $2.16 billion last year.
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For context, keep in mind that in 2014, Meta’s Reality paid $2 billion to acquire Oculus, the pioneering maker of VR hardware that laid the foundation for its operations. The corporation’s involvement in the sector has increased as a result of the acquisition of several significant software firms, including Beat Saber’s inventor and now Within, the company behind the virtual fitness programme Supernatural.
Reality Labs had 17,000 people until layoffs in the latter part of last year, according to reports. Meta hasn’t made available its personnel figures for the business, though. The majority of the money is spent on hiring personnel and developing gear.
Susan Li, CFO of Meta’s Reality, stated that the business anticipates even greater yearly losses for Reality Labs in 2023. Li called its efforts in software for augmented reality, virtual reality, and the metaverse “a long-duration commitment” and said, “We’re going to continue to engage heavily in this area given the huge long-term potential that we see.”
Later in 2023, Meta’s Reality intends to introduce a new generation of consumer headsets, including a mixed reality update to its Quest hardware. It is widely anticipated that Apple will soon release a new AR/VR headset. Apple is one of the few consumer-focused businesses prepared to fight with Meta in the industry.
The company’s CEO, Mark Zuckerberg, highlighted the fact that Reality Labs includes Horizon Worlds and other tools connected to the metaverse during this week’s earnings call. The most important aspect of what we’re doing, in my opinion, is the software and social network, yet building software requires much less money than building hardware, according to Zuckerberg.
To win over sceptic investors, Meta may publicly downplay its metaverse initiatives, but the business seems prepared to stick with VR and AR.
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