Meta’s Reality Labs Posted $3.99 Billion First Quarter Loss
Meta’s Reality Labs continues to rack up huge losses according to the latest quarterly earnings report. In the first quarter of 2023, the division incurred an operating loss amounting to $3.99 billion in spite of the company’s aggressive downsizing efforts and massive cost cuts.
Meta Reality Labs is at the core of Zuckerberg’s metaverse vision, charged with translating the company’s futuristic metaverse ambition into virtual reality and augmented reality products for today’s mainstream market.
According to the latest quarterly earnings report, Reality Labs generated $339 million in revenues, a drop in the sea compared to the tens of billions of dollars that Meta rakes in every quarter in advertising sales.
However, the loss narrowed down from the $4.28 billion that the company incurred in the previous quarter against revenues of $727 million.
For the whole of 2022, Meta’s Reality Labs registered an operating loss of $13.72 billion against $2.16 billion in sales. It is a graphic illustration of how XR technologies are yet to seep into the mainstream market in spite of massive investments by companies such as Meta.
Zuckerberg described 2023 as the “year of efficiency” where the company will institute aggressive cost-cutting measures that include laying off 21,000 staff so far and hiring freezes.
However, as it ruthlessly truncates workforces, Meta continues to pump billions of dollars into its metaverse projects, determined to lead and dominate the development of what some tout as the next computing frontier.
According to data by research firm NPD Group, virtual reality headset sales dropped 2% year-over-year from early December 2022.
In March this year, Meta dropped the prices of its Quest 2 and Quest Pro headsets with the Quest 2 headset now selling at $430 from $500 and the Quest Pro headset selling for $1,000 from the initial $1500.