Losses of Meta Reality Labs reach $30 billion, with $3.99 billion lost last quarter

Metaverse is still nowhere close to being a finished product or service. Consumers also do not show any growth of interest in virtual reality products, especially when VR headsets remain a luxury choice rather than a daily necessity.

Virtual reality headset – illustrative photo. Image credit: Jezael Melgoza via Unsplash, free license

Despite incurring significant financial losses, Mark Zuckerberg remains steadfast in pursuing Meta’s metaverse goals. Meta’s Reality Labs division, responsible for metaverse-related technology, reported a staggering operating loss of $3.99 billion in the first quarter, adding to its cumulative losses of $30 billion since 2020.

On a positive note, Meta’s first-quarter performance exceeded expectations, with a 3% increase in sales and a revenue of $28.65 billion, surpassing analysts’ predictions. Additionally, the company provided optimistic guidance for the second quarter.

However, an unfavorable aspect of the report pertains to Meta’s Reality Labs division, which once again experienced major financial losses. During just three months, the division recorded a loss of $3.99 billion, adding to the $14 billion lost throughout the previous year.

Consequently, the total loss since Q4 2020 has reached a whopping $30 billion. The only consolation for Zuckerberg is that the most recent losses were not as severe as the $4.3 billion loss in the previous quarter.

Zuckerberg’s unwavering belief in the metaverse and the work of Reality Labs coincides with Meta’s reduction of approximately 21,000 jobs in its efforts towards operational efficiency.

There was a time when businesses eagerly invested in the metaverse, but analysts predict that most of these projects will shut down by 2025.

The declining interest in the metaverse can be attributed, in part, to the sluggish economy, which was already lacking significant enthusiasm.

Global shipments of virtual reality headsets declined by over 12% in 2022 compared to the previous year. In times when individuals exercise caution with their expenses and prioritize essential purchases, a VR headset is not high on their list of priorities.

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