Facebook’s parent company, Meta, is having a decent day today after beating revenue and user activity forecasts for its final fiscal quarter of 2022. But its VR division isn’t helping the company make money. In fact, it’s costing the company billions in losses.
While it’s true that Meta’s stock is rising in after-hours trading today after sharing fairly positive fourth-quarter financial results, its VR division, Reality Labs, didn’t have such positive news to share, as it’s continuing to blow through money at a shocking rate. Today, the company confirmed it lost over $4 billion to VR and metaverse development in its final quarter of 2022. And in total, it lost well over $13 billion in 2022 trying (and failing) to build a metaverse people would flock to.
In comparison, Meta brought in $32.1 billion in revenue across all departments and apps.
As reported by Decrypt.co, Meta’s Reality Labs only brought in $727 million in revenue in the closing months of 2022. That’s not great when compared to the billions spent on the division in the same year, but it’s also worse than you might think. That figure is down 17% from the division’s revenue in the same period of 2021. Ouch.
Remember too that Facebook’s flagship metaverse software, Horizon Worlds, has basically been a giant flop, with reports that most worlds inside of it are empty and barely played. Not only that, but the company’s own employees barely use it, with a leaked internal memo showing that staff at Meta don’t enjoy using Horizons Worlds because it’s riddled with bugs and other quality issues.
Really the only big success story from Reality Labs is the Oculus Quest 2 headset, which was seen by many as an affordable alternative to pricey PC and console VR headsets and was also completely standalone. But in July Meta raised the price of that affordable headset by $100, with the 128GB model now costing $400 and the 256GB version now going for $500.
In November 2022, Meta laid off 11,000 employees, blaming covid, “macroeconomic downturn, increased competition, and ads signal loss.” Zuckerberg blamed himself for the layoffs, but conveniently didn’t mention in his announcement of layoffs how much money the company is continuing to spent on VR and metaverse development. Over the past few years the company has spent tens of billions of dollars trying to make a VR-powered metaverse a thing.
And now, in February 2023, following massive layoffs and continued losses, it only has an unappealing and empty PlayStation Home clone to show for all its troubles.