In Meta’s metaverse division, losses mount.
Facebook’s parent company, Meta, just released its earnings report, which shows that Facebook Reality Labs (FRL), its metaverse branch, lost more than $3.6 billion in the third quarter of 2022. The figure is far more than the $2.63 billion loss for the same time period previous year.
Meta’s virtual reality division is called FRL. It creates both software and hardware, including the well-known Horizon World metaverse project and the Oculus virtual reality system. In August 2020, it was introduced.
The latest announcement is the latest in a series of challenging financial reports for the massive social media company. It indicates that the recently launched new items are not yet generating a profit for the business. In 2022, Meta had a $2.8 billion loss in the second quarter. The total loss for the year is $9.43 billion.
The corporation stated in the most recent report revealing the results of this quarter that it anticipates its losses to continue to rise sharply in 2023. Nonetheless, over time, FRL anticipates helping to boost total sales and operating income growth.
Mark Zukerberg, the CEO of Meta, acknowledged the difficulties facing the metaverse section during the company’s conference call, but also expressed optimism. He said that FRL’s expansion would be guaranteed by the project’s solid foundation and Meta’s emphasis on efficiency.
Low user growth and decreased user ad spending have hurt Meta’s profitability, putting pressure on the firm to cut back on expenditure in the metaverse segment.In 2021, Meta’s FRL segment generated $2.3 billion in revenue but incurred a $10.3 billion loss.
The metaverse market as a whole has also been struggling. For example, NFT volume fell 66.5% on a quarter-over-quarter basis in Q3 of 2022. According to a Coinmarketcap analysis on the Q3 2022 cryptocurrency market, active NFT traders fell 30.4% from quarter to quarter. During this time, the value of Andreessen Horowitz’s flagship cryptocurrency fund, a16z, also fell by 40%.
The report’s publication caused Meta’s stock to plummet by 15%. Over 60% of the value of meta stocks has been lost so far this year.