Meta disclosed that its Q4 2022 results revealed the biggest loss yet for its metaverse division, highlighting that Mark Zuckerberg’s vision for the metaverse continues to be expensive and unprofitable. Reality Labs incurred an operating loss of $4.28 billion, bringing its total loss for the year 2022 to $13.72 billion.
Meta’s division Reality Labs generated $727 million in Q4 and $2.16 billion in revenue for the entire year of 2022, which is a decrease from $2.27 billion in 2021. The number includes sales of Quest headsets, though sales of VR headsets are declining overall. Despite the revenue generated, the division recorded a loss that was six times higher than in the previous year and accounted for only 2% of Meta’s total sales.
Fourth quarter 2022 revenue was $32.17 billion, a 4% decrease year-over-year. Full-year revenue for 2022 was $116.61 billion, with a 1% decline. Meta also reported that its workforce grew by 20% YoY to 86,482 as of December 31, 2022, which included a significant portion of the previously announced 11,000 layoffs from November.
“Our community continues to grow and I’m pleased with the strong engagement across our apps. Facebook just reached the milestone of 2 billion daily activities. The progress we’re making on our AI discovery engine and Reels are major drivers of this. Beyond this, our management theme for 2023 is the ‘Year of Efficiency’ and we’re focused on becoming a stronger and more nimble organization,”
Zuckerberg said in the report.
Meta’s stock value has risen by over 26%, indicating increased investor confidence. However, the stock is still falling, with investors criticizing Zuckerberg’s business model.
In July, Meta announced a $100 increase in the price of its Quest 2 VR headset, claiming it needed to account for inflation. In October, the company introduced the Quest Pro VR headset, aimed at enterprise and workplace use, with a price of $1,500. Currently, Meta is offering a limited-time discount of $400 on its most recent VR headset.
The future of Meta is very uncertain; the company also recently announced shutting down one of the most popular games on Oculus, Echo VR. Meanwhile, it has set plans to acquire VR fitness app Within, recently acquiring smart eyewear firm Luxexcel and VR optics company Gary Sharp Innovations. The company appears to be shifting from gaming to VR fitness and AR, yet it is still focusing on the metaverse.
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