Facebook Parent Meta Reports Metaverse Division Loses of $2.8B in Q2
Facebook Parent Meta posted a loss of $2.8 billion in Q2 for the Metaverse division, down from Q1’s $695 million to $452 million in the Q2.
Meta’s titular division just took another hit.
The social media giant disclosed this afternoon in its earnings report that its metaverse-specific division suffered a second-quarter loss of $2.81 billion, which puts the division’s year-to-date losses at an eye-popping $5.77 billion.
The division, Facebook Reality Labs (FRL), consisting of its augmented and virtual reality operations, is distinct 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 in the period, down 35% from last quarter. Last year, the division posted a staggering annual loss of $10.2 billion. It is currently on track to exceed that figure in 2022.
“This is obviously a very expensive undertaking over the next several years,” conceded Meta CEO Mark Zuckerberg. “But as the metaverse becomes more important in every part of how we live… I’m confident that we’re going to be glad we played an important role in building this.”
When Zuckerberg changed Facebook’s name to Meta last fall, he re-oriented the entire company’s ethos towards dominating the metaverse: an immersive, future version of the internet navigated by digital avatars that Zuckerberg is betting will become central to commerce, work, entertainment, and social interaction.
Though the company’s multi-billion dollar metaverse play has not yet paid off, Zuckerberg attempted to convince shareholders this afternoon that it’s a savvy long-term strategy.
“By helping to develop these platforms, we’re going to have the freedom to build these experiences the way that we and the overall industry believe will be best, rather than being limited by the constraints that competitors place on us,” said Zuckerberg. “I feel even more strongly now that developing these platforms will unlock hundreds of billions of dollars, if not trillions, over time.”
The company’s overall revenue grew slightly more than 3% to $28.8 billion for the quarter. Still, Meta’s shares fell about 4% in after-hours trading to $163.81 at the time of writing following the release of its Q2 earnings report. And shares of Facebook are down over 50% this year.