Mark Zuckerberg, chief govt officer of Meta Platforms Inc., demonstrates the Meta Quest Pro throughout the digital Meta Connect occasion in New York, US, on Tuesday, Oct. 11, 2022.
Michael Nagle | Bloomberg | Getty Images
Mark Zuckerberg’s dream of a future within the metaverse is costing buyers a boatload of cash.
In its earnings report after the bell on Wednesday, Meta mentioned its Reality Labs division, residence to the corporate’s digital actuality applied sciences and tasks, posted a $4.28 billion working loss within the fourth quarter, bringing its complete for 2022 to $13.72 billion.
It was a tricky first full 12 months for the brand new Meta, the corporate previously often known as Facebook. In late 2021, Zuckerberg modified the corporate’s identify and mentioned its future can be within the metaverse, a digital universe the place folks will work, store, play and be taught.
But for now, it is only a value heart, and Meta remains to be a web-based advert firm.
Reality Labs generated $727 million within the fourth quarter, and $2.16 billion in income for all of 2022 — a decline from $2.27 billion in 2021 — together with gross sales of Quest headsets. In different phrases, the division misplaced greater than six occasions the sum of money it generated in income final 12 months, whereas accounting for lower than 2% of complete gross sales at Meta.
Analysts had been anticipating Reality Labs to file an quarterly working lack of $4.36 billion on income of $715.1 million, in response to StreetAccount.
Sales of VR headsets within the U.S. declined 2% in 2022 from the prior 12 months as of early December, in response to knowledge shared with CNBC by analysis agency NPD Group.
In July, Meta introduced it was elevating the value of its Quest 2 VR headset by $100. The firm mentioned on the time that the value hike was essential to account for inflationary pressures. Meta then debuted its costlier Quest Pro VR headset in October, pitching it to firms as an enterprise-workplace gadget for $1,500. This week, Meta is operating a sale on its high-end VR headset, shaving off $400 for a restricted time.
Zuckerberg advised CNBC’s Jim Cramer final summer season that he hopes to “get to around a billion people in the metaverse doing hundreds of dollars of commerce” by the second half of the last decade.
But earlier than the Facebook founder’s desires develop into a actuality, Meta has to spend many billions of {dollars} creating the VR and augmented-reality applied sciences that underpin the metaverse idea.
The firm mentioned final 12 months that it expects “Reality Labs operating losses in 2023 will grow significantly year-over-year.”
“Beyond 2023, we expect to pace Reality Labs investments such that we can achieve our goal of growing overall company operating income in the long run,” Meta mentioned on the time.
Shareholders have been lower than thrilled with the outcomes to date. Meta misplaced nearly two-thirds of its worth final 12 months as metaverse prices soared and the corporate’s core on-line advert enterprise suffered from a struggling economic system, elevated competitors from TikTok and Apple’s privateness replace, limiting advert focusing on.
The firm on Wednesday reported fourth-quarter outcomes that beat analysts’ income estimates and introduced a $40 billion buyback, sending the top off greater than 17% in prolonged buying and selling.
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Source: www.cnbc.com”