During the company’s quarterly earnings call, Mark Zuckerberg said the division, which is making heavy losses but could one day be worth trillions.
Meta’s incumbent division has just suffered another blow
The social networking giant has revealed that its meta-specific division suffered losses of $2.81 billion this quarter. Year-to-date, the division’s losses total a whopping $5.77 billion.
The division, Facebook Reality Labs (FRL), is separate from Facebook, Instagram, Messenger and Whatsapp, and focuses on building the hardware, software and content central to Meta’s push into the metaverse.
In its Q2 2022 earnings report, FRL generated $452 million in revenue during the period, down 35 percent from the previous quarter. Last year, the division posted a staggering annual loss of $10.2 billion. It is currently on track to surpass that figure in 2022.
“This is obviously a very expensive undertaking over the next few years“, conceded Meta CEO Mark Zuckerberg. “But as the metaverse becomes more important to every part of our way of life… I’m sure we’ll be happy to have played an important role in building it.“
When Mark Zuckerberg changed Facebook’s name to Meta last fall, he reoriented the ethos of the entire company toward dominating the metaverse: a future, immersive version of the internet in which digital avatars will navigate and which Mark Zuckerberg is betting will become central to commerce, work, entertainment and social interaction.
Although the metaverse, which cost the company several billion dollars, has yet to pay off, Mark Zuckerberg has tried to convince shareholders that it is a sound long-term strategy.
“By contributing to the development of these platforms, we will have the freedom to create these experiences in the way that we and the industry as a whole think will be best, rather than being limited by the constraints that competitors impose on us“, said Zuckerberg. “I’m even more convinced now that the development of these platforms will unlock hundreds of billions of dollars, if not trillions, over time.“
The company’s overall revenue improved by just over 3% this quarter, to $28.8 billion. Still, after the company’s second-quarter earnings report, its stock fell some 4% to $163.81.