Facebook, Instagram, and WhatsApp’s parent company, Meta, released its Q2 earnings report on Wednesday. According to the document, the firm’s metaverse division, Reality Labs, witnessed $3.7 billion in losses. Reality Labs works on virtual reality and augmented reality technologies to fuel Meta’s metaverse initiative.
According to the earnings report, Reality Labs posted $276 million in revenue in Q2 2023. This represented a significant drop from Q2 2022 when it earned about $452 million. Nonetheless, the social media giant has said it still remains committed to metaverse development.
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Speaking in an earnings call, CEO Mark Zuckerburg stated, “As our investments in AI continue, we remain fully committed to the metaverse vision as well.” Zuckerburg further added that the company has been working on both AI and metaverse developments for many years in parallel and that “in many ways, the two areas are overlapping and complementary.”
According to Meta’s chief financial officer Susan Li, Reality Labs’ expenses amounted to $4 billion in Q2 2023, an increase of 23%. This was “due to lapping a reduction in Reality Labs loss reserves in Q2 of last year as well as growth in employee-related costs.”
Why are Metaverse initiatives failing, and why is Meta still interested?
Metaverse projects took off in 2021, but the buzz around the technology has slowly faded. People’s interest in such initiatives seems to have diverted. Moreover, the metaverse concept was more talked about during the Covid-19 pandemic, when people were stuck at home. The idea was a way for people to communicate without a physical presence. However, as things began to go back to normal, the idea of a metaverse might have become redundant.
Furthermore, technology still hasn’t made innovations that can capture people’s imagination. Some that have animations are cartoony, while others lag due to technical issues or poor connectivity.
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Nonetheless, Meta still believes that the idea has a future. According to Zuckerburg, the company’s near-term focus is on AI, while the long-term focus is on the metaverse.
