Reality Labs, the virtual reality (VR) and metaverse division of the Meta, reported losses for the seventh consecutive quarter. However, CEO Mark Zuckerberg remains steadfast in his beliefs about investing in this technology, calling it an “enormous opportunity.”
During Meta’s second-quarter earnings call on Wednesday, Zuckerberg acknowledged that these losses could continue for several years, until VR apps and the metaverse platform are mature enough to take advantage of the “huge opportunity” out of “hundreds of billions of dollars.”
“Metaverse is an enormous opportunity for a number of reasons. I am even more convinced now that developing these platforms will unlock hundreds of billions, if not trillions, of dollars over time.”
“It’s obviously a very expensive job over the next few years.”Zuckerberg added, “I am sure that we will be glad that we played such an important role in its creation.”.
The extended period of operating losses for Reality Labs was revealed in Meta’s second-quarter earnings report. Such losses are not unusual for departments that undergo research and development.
Reality Labs develops VR and augmented reality (AR) apps to help Meta users connect across its various social platforms, including Metaverse, via the Oculus line of VR headsets.
In addition to losses, Reality Lab’s revenue has declined since 2021, while operating margin has been on a steady decline since 2020. Revenue of $11.1 billion and operating margin of 29% in the second quarter of 2022 were the lowest in the past. seven quarters.
in the first quarter Reality Labs reported a loss of $2.9 billion.
Zuckerberg also noted that the “challenging macro environment” could exacerbate losses, saying that The current economic situation is worse than last quarter.
His view is supported by yesterday’s 0.75 percentage point hike in interest rates, for the second time in a row by the Federal Reserve, before making the Meta earnings call, adding:
“It appears that we have entered a recession that will have a significant impact on the digital advertising industry. Against this backdrop, we are focused on making a long-term investment that will allow us to emerge stronger.”
Despite the economic woes, Zuckerberg is confident that his company and its subsidiaries will weather the current economic crisis as a “stronger and more disciplined organization.”
Zuckerberg has this confidence because of the investments made to secure a leading position in an industry that could change to accommodate more metaverse platforms.
Related: Expert Word: The Role of VR in the Metaverse
Meanwhile, the US Federal Trade Commission (FTC) has filed a lawsuit against Meta, claiming that the company aims to monopolize the entire metaverse market. The complaint alleges that Meta choices within the industry impede innovation and “competitive rivalry” among US companies trying to develop Metaverse platforms and applications.