Meta reported that its fourth-quarter results showed its biggest loss yet for its metaverse division, and it reminds us that Mark Zuckerberg’s vision of the metaverse is still very expensive.
The company’s its losses in its VR division (Meta Reality Labs) hit $4.279 billion in the fourth quarter, compared with an operating loss of $3.304 billion in the same quarter a year ago.
Revenues for the VR division were $727 million in Q4, down from $877 million a year ago. It’s worth noting this was the first holiday-selling season since Meta increased the base price of its Oculus Quest 2 headsets by $100 to $400 back in August 2022. During the quarter, Meta also launched the Meta Quest Pro, an enterprise high-end version of its headset, for $1,500.
Meta has started breaking out its results from its Reality Labs division, (formerly known as Facebook’s Oculus division) to give investors a sense of how much it is investing in the next version of the internet, or the metaverse, the universe of virtual worlds that are all interconnected, like in novels such as Snow Crash and Ready Player One.
The company signaled some bad news (at least for VR software companies) in Q2 2022 when it said it would raise the prices for its Meta Quest 2 VR headsets by $100 each.
Overall net income was $4.652 billion on revenue of $32.165 billion in Q4, compared with net income of $10.285 billion on revenue of $33.671 billion a year earlier. Meta’s (overall family of apps) daily active users were 2.96 billion on average for December, an increase of 5% from a year earlier. Monthly active users hit 3.74 billion on December 31, up 4% from a year earlier.
Facebook itself had two billion daily active users, up 4% from a year earlier.
“Our community continues to grow and I’m pleased with the strong engagement across our apps. Facebook just reached the milestone of two billion daily actives,” said Mark Zuckerberg, Meta CEO, in a statement. “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 has said before the company is spending money to build it in a way that would be the best platform possible, without the constraints that “our competitors place on us,” meaning Apple and its fees. Zuckerberg said that the metaverse could unlock hundreds of billions of dollars or trillions over time.
He said it was obviously very expensive, but the metaverse will be important to the way we live and he is glad to play a role in creating it.
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