Meta’s Reality Labs business — the division in charge of producing metaverse-related technology, posted a $3.7 billion (roughly Rs. 30,476 crore) loss in the third quarter of this year. The company’s family of apps division, which includes Facebook, Instagram, Messenger, and WhatsApp, posted weaker-than-expected second-quarter earnings late Wednesday and cautioned that its metaverse division would post deeper net losses over the coming year, as the social media group continues to struggle with its ongoing transition from its Facebook roots.
Meta said Reality Labs generated $285 million (roughly Rs. 2,347 crore) in revenue for the quarter, down from $558 million (roughly Rs. 4,595 crore) the previous year. The company’s “Family of Apps” business segment, which includes Facebook and Instagram, registered $27.4 billion (roughly Rs. 2,25,625 crore) in revenue.
Outside Reality Labs, Meta continues to generate robust advertising revenues quarter after quarter with its core apps businesses, Facebook and Instagram. However, after topping $1 trillion (roughly Rs. 82,32,288 crore) dollars last year, Meta’s market capitalisation has plummeted to below $350 billion (roughly Rs. 28,71,244 crore).
“We do anticipate that Reality Labs operating losses in 2023 will grow significantly year-over-year,” the report read. “Beyond 2023, we expect to pace Reality Labs investments such that we can achieve our goal of growing overall company operating income in the long run.”
Meta CEO Mark Zuckerberg said during an earnings call Wednesday that while people are perhaps most aware of the company’s virtual reality headsets, the company is working on several metaverse-related efforts. Such initiatives include a social metaverse platform with avatars, augmented reality and neural interfaces.
“I get that a lot of people might disagree with this investment,” Zuckerberg said. “But from what I can tell, I think this is going to be a very important thing, and I think it would be a mistake to not focus on any of these areas, which I think will be fundamentally important to the future.”
Meta in July reported a second-quarter loss of $2.8 billion (roughly Rs. 23,050 crore) for its Reality Labs division, adding to a $2.9 billion (roughly Rs. 22,970 crore) loss in this year’s first quarter. Last year the unit posted an annual loss of $10.2 billion (roughly Rs. 83,969 crore), bringing combined losses to nearly $20 billion (roughly Rs. 1,64,628 crore), as of September 30.