Meta’s Reality Labs division recorded a $3.7 billion operating loss in Q2 this year. Yet, the social media giant remains fully committed to metaverse development.
So far, in 2023, Meta has invested a staggering $7.7 billion in its virtual reality business, according to Meta’s latest earnings results released on July 26.
The unit’s revenue declined to $276 million in the same quarter from $452 million last year. This decrease was attributed to lower Quest 2 virtual reality headset sales.
During an earnings call, Meta’s CEO, Mark Zuckerberg, emphasized their dedication to artificial intelligence (AI) and the metaverse vision. He explained that the company has been actively working on these priorities for years and sees them as overlapping and complementary endeavors.
Meta’s CFO, Susan Li, attributed the revenue drop to reduced sales of their VR headset and revealed that Reality Labs’ expenses rose to $4 billion in the second quarter, with a 23% increase primarily due to previous loss reserves and growing employee-related costs.
The $3.7 billion loss in the second quarter followed losses of $4 billion in Q1 2023 and $2.8 billion in Q2 2022.
The company expects Reality Labs’ operating losses to continue throughout 2023 due to ongoing VR-related product development and further investments in the metaverse.
Metaverse remains a key focus
Despite these challenges, Zuckerberg expressed an unwavering belief in the metaverse and AI’s potential.
“I’ve said on a number of these calls that the two technological waves that we’re riding are AI in the near term and the metaverse over the longer term.”Mark Zuckerberg, CEO of Meta
Meta reported quarterly profits of $7.79 billion, a 16% increase from the same period last year. Quarterly revenue increased 11% year-over-year to $32 billion.
According to Google Finance data, Meta’s stock price jumped on the earnings, rising over 7% in after-hours trading to around $320. Meta shares have gained nearly 140% year-to-date but are still off their September 2021 all-time high of over $378.