Meta Continues to Suffer Losses Due to Metaverse Challenges

In the second quarter, Meta faced significant losses amounting to over $3.74 billion in its metaverse-related ventures. As part of its commitment to the virtual reality sector, the prominent Big Tech company has already invested a massive $7.7 billion in 2023.

On July 26, Meta disclosed its financial results for the second quarter of 2023, revealing a noteworthy 11% increase in revenue compared to the same period last year, reaching a total of $31.9 billion.

However, Meta’s metaverse-focused Reality Labs revenue experienced a notable decline, plummeting nearly 40% compared to the second quarter of 2022, with total earnings of $276 million – the lowest in two years.

During an earnings call, Meta’s financial chief, Susan Li, attributed the decline in Reality Labs’ revenue to reduced sales of its Quest 2 virtual reality (VR) headset. The department’s expenses also rose by 23%, reaching $4.0 billion, which was partly due to increased staffing costs.

Meta projected that Reality Labs’ operating losses would continue to rise throughout 2023. The company explained that this was a result of ongoing investments in VR-related product development and further advancements in its metaverse initiatives.

Mark Zuckerberg, the chief of Meta, highlighted the company’s strategic focus on artificial intelligence in the short term, while emphasizing a long-term vision for the metaverse during the same call.

He reiterated Meta is “fully committed” to its metaverse alongside its AI investments and said the two areas are “overlapping and complementary.”

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