Meta’s losses for its metaverse efforts surpassed $3.74 billion in Q2 2022, with over $7.7 billion spent on its virtual reality segment so far this year.
In its Q2 results on July 26th, Meta reported an 11% revenue increase to $31.9 billion compared to last year. However, its Reality Labs metaverse revenue dropped nearly 40% to $276 million, the lowest in two years.
On the earnings call, Meta’s CFO said Reality Labs’ revenue decline was due to lower sales of its Quest 2 VR headset. Expenses grew 23% to $4 billion partly from more staffing. Meta expects Reality Labs losses to continue increasing in 2023 due to product development and metaverse investments.
CEO Mark Zuckerberg reiterated Meta’s commitment to both AI and the metaverse, calling them complementary. He said Meta’s AI is helping build metaverse avatars and objects. Meta shares jumped over 7% after earnings to around $320.
Zuckerberg claimed the new platform Threads has retained more users than expected. But data analytics firm Similarweb reported Threads’ Android daily users have dropped 60% since its launch to 12.6 million, with declining engagement.
Overall, Meta’s metaverse ambitions continue weighing heavily on profits, but Zuckerberg remains confident in the long-term vision.
