Meta’s Metaverse Ventures Amass Staggering $47 Billion in Losses, Surpassing Market Caps of Major Companies

Meta’s Metaverse Ventures Amass Staggering $47 Billion in Losses, Surpassing Market Caps of Major Companies

Crypto News – Mark Zuckerberg‘s Meta has accrued a staggering nearly $50 billion in losses within its metaverse ventures, surpassing the market values of many prominent companies and even the net worth of some of the world’s wealthiest individuals.

Since the beginning of 2019, Meta, the parent company of Facebook, Instagram, and WhatsApp, has witnessed a cumulative loss of $47 billion in its Reality Labs division, according to a thorough analysis of regulatory filings by Insider. The operating losses in this segment have skyrocketed from being just under $5 billion in 2019 to exceeding $10 billion in 2021, nearly reaching $14 billion in 2022, and climbing to over $11 billion in the first nine months of this year.

Zuckerberg and his team are bracing for this trend to persist, as they explicitly stated in Meta’s third-quarter earnings report, “We expect our Reality Labs operating losses to increase significantly in 2024. Many of our investments in Reality Labs are focused on long-term, cutting-edge research and development for metaverse products that may only come to full fruition in the next decade.”

The total metaverse losses incurred by Meta now surpass the market capitalization of major companies such as Ford ($45 billion), Keurig Dr. Pepper ($41 billion), Hershey ($39 billion), and Kraft Heinz ($39 billion). Furthermore, they could soon exceed the market values of companies like Lululemon ($49 billion), Chipotle ($50 billion), Target ($51 billion), and Monster Beverage ($52 billion).

If the $47 billion loss figure associated with Meta’s metaverse endeavors were an individual’s net worth, it would place them in the top 25 spots on the Bloomberg Billionaires Index, surpassing figures like Nike co-founder Phil Knight and his family ($39 billion), Nvidia CEO Jensen Huang ($36 billion), and Citadel CEO Ken Griffin ($35 billion). This hypothetical individual would also be worth nearly half as much as Mark Zuckerberg himself, who is valued at $105 billion.

It’s important to note that the metaverse business constitutes only a small portion of Meta’s overall operations. In the nine months leading up to September, Zuckerberg’s company generated $94 billion in revenue and $42 billion in operating profit from its primary “Family of Apps” division, whereas the RL (Reality Labs) business recorded less than $1 billion in revenue and a $11.5 billion loss. Consequently, Meta still reported over $30 billion in total operating income during that period.

Mark Zuckerberg has long championed virtual reality, augmented reality, and other metaverse-related technologies. When his company first acquired VR pioneer Oculus in 2014, his vision was to enable people from around the world to experience events as if they were sitting courtside at an NBA game, front-row at a Taylor Swift concert, or attending a Harvard lecture.

The ultimate payoff of Zuckerberg’s substantial bet on the metaverse remains uncertain. However, the notable losses incurred by Meta in this venture are undeniably striking and seem poised to continue growing in the years to come.