Meta’s Metaverse Endeavor Continues to Bleed Money: Reality Labs Reports $3.7 Billion Loss in Q3
Crypto News – Mark Zuckerberg’s ambitious bet on the metaverse is still yielding disappointing results. In its recently released third-quarter earnings report, Meta revealed that Reality Labs incurred a staggering $3.7 billion loss, mirroring the previous quarter’s performance. Reality Labs, entrusted with driving Meta’s foray into virtual reality (VR) and the metaverse, continues to operate at a substantial loss, with a total drain of $11.5 billion from the company’s coffers this year.
During an earnings call with investors, Meta’s CFO, Susan Li, highlighted that the sales of Quest 2 VR headsets dwindled in the third quarter, resulting in a 26% decline in Reality Labs’ revenue, which now stands at $210 million. Moreover, Meta anticipates that operating losses for Reality Labs will increase significantly in the foreseeable future, as indicated in the earnings report.
Mark Zuckerberg’s priorities are evident in his recent remarks to investors. While emphasizing the company’s commitment to artificial intelligence (AI), he mentioned the term “metaverse” a mere three times during the call. This shift underscores Zuckerberg’s cautious approach, considering the uncertain profitability of Reality Labs. He acknowledged this uncertainty in the second-quarter earnings call back in July, stating, “I can’t guarantee you that I’m gonna be right about this bet.”
Despite Meta’s extensive investment in the metaverse, there have been recent layoffs within the Reality Labs division. In early October, it was reported that employees in this division were informed through Meta’s internal forum, Workplace, about potential layoffs. The exact number of affected employees was not disclosed.
This move aligns with Meta’s previously announced “year of efficiency” plans, aimed at bolstering the company’s financial performance. The year began with an announcement of 10,000 job cuts, and there were reductions in the health and wellness benefits provided to employees, declining from $3,000 in 2022 to $2,000 in the current year, as reported by Insider.
It’s worth noting that Meta has not responded to Insider’s request for comment as of yet.
In summary, Meta’s ambitious pursuit of the metaverse, spearheaded by Reality Labs, is proving to be a costly and uncertain venture, with significant financial losses and recent layoffs underscoring the challenges it faces. Mark Zuckerberg’s focus on AI, alongside his measured approach to the metaverse, highlights the company’s evolving priorities.
%s Comment