A metaverse full of digital worlds and avatars might come one day, but it won’t come cheap. Facebook parent company Meta has released its financial results for the first quarter of 2022, showing that the company’s for this year alone virtual reality-focused division has lost $2.96 billion so far. This continues a trend of operating heavily in the red, with the same division having lost nearly $20 billion since 2020.
As reported by VentureBeat, Meta yesterday released its financial results for the first quarter of 2022 and announced that Reality Labs, the company’s virtual reality-focused group, had lost just about $3 billion. During the same period, the division had sales of just $695 million. Well, in most cases I wouldn’t say “just” in front of a number as obnoxious as 695 million.
However, that’s a drop in the bucket compared to what Mark Zuckerberg’s company has spent on VR. In 2021 alone Meta lost $10 billion from its VR business. In the same year it brought income of $2.3 billion, less than the loss in the first quarter of this year. And remember, Meta’s VR division burned another $6 billion in 2020.
Today’s new figures are not shocking. It doesn’t come cheap to develop virtual reality headsets or software. Meta and Facebook continue to spend heavily on advertising, research, construction, and development of virtual reality headsets, apps and social spaces. It’s also hired more people to work and bang in its VR department reported 17,000 employees starting in 2022. So it makes sense that it would take some money to pay that many people to build something as expensive as our collective virtual reality future.
And the company’s flagship headset, the Meta Quest 2 (formerly known as Oculus Quest 2) sells great. But these new numbers make it clear that virtual reality and the metaverse continues to be a costly proposition for meta.
It should be noted that meta will be fine even if it burns money building tomorrow’s VR-powered metaverse. The company’s total revenue for the first quarter for 2022 over 25 billion US dollars. And last year, it brought in a whopping $117 billion in total revenue across all divisions and apps. So Zuck can keep spending all that money to build his own metaverse. (Hopefully it gets better than that mostly boring and sterile world that currently exists…)
Continue reading: 2021 saw a 31% increase in VR related insurance claims
Of course, the question remains: will VR ever escape from being a niche interest and market that costs billions of dollars a year to support? Sure, some companies like Valve and Sony have continued to show interest, investing in and building their own VR experiences and devices. But it seems like the future of VR is a tool to access the metaverse, whatever it (maybe) becomes.
Now I wonder how many years and billions of dollars it will take us to get to the metaverse, and even most humans want it? Zuckerberg and Meta Billions are betting that the answer to that question is yes. But I’m not so sure about that.
Correction 04/28/2022 21:05 ET: Edited several statements to clarify this they refer to the company revenue instead of profits.
