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[Eddie-Griffin]

https://kotaku.com/facebook-metaverse-vr-2022-billions-13-billion-quest-2-1850062517

But its VR division isn’t helping the company make money. In fact, it’s costing the company billions in losses.

While it’s true that Meta’s stock is rising in after-hours trading today after sharing fairly positive fourth-quarter financial results, its VR division, Reality Labs, didn’t have such positive news to share, as it’s continuing to blow through money at a shocking rate. Today, the company confirmed it lost over $4 billion to VR and metaverse development in its final quarter of 2022. And in total, it lost well over $13 billion in 2022 trying (and failing) to build a metaverse people would flock to.

In comparison, Meta brought in $32.1 billion in revenue across all departments and apps.

As reported by Decrypt.co, Meta’s Reality Labs only brought in $727 million in revenue in the closing months of 2022. That’s not great when compared to the billions spent on the division in the same year, but it’s also worse than you might think. That figure is down 17% from the division’s revenue in the same period of 2021. Ouch.

Remember too that Facebook’s flagship metaverse software, Horizon Worlds, has basically been a giant flop, with reports that most worlds inside of it are empty and barely played. Not only that, but the company’s own employees barely use it, with a leaked internal memo showing that staff at Meta don’t enjoy using Horizons Worlds because it’s riddled with bugs and other quality issues.

Really the only big success story from Reality Labs is the Oculus Quest 2 headset, which was seen by many as an affordable alternative to pricey PC and console VR headsets and was also completely standalone. But in July Meta raised the price of that affordable headset by $100, with the 128GB model now costing $400 and the 256GB version now going for $500.

In November 2022, Meta laid off 11,000 employees, blaming covid, “macroeconomic downturn, increased competition, and ads signal loss.” Zuckerberg blamed himself for the layoffs, but conveniently didn’t mention in his announcement of layoffs how much money the company is continuing to spent on VR and metaverse development. Over the past few years the company has spent tens of billions of dollars trying to make a VR-powered metaverse a thing.

Over $4billion lost in the holiday season alone in 2022, which is when they were discounting the Quest 2 in many areas and tons of software. Over $13 billion overall for the whole year of 2022.

Makes you think twice about what the profit margins are on all this VR stuff. When even big sales of the Quest 2 last year compared to, well, every other headset didn't really generate enough sales profits or software profits to help reduce losses. No wonder Facebook had to raise the price of the Quest 2 for a time.

I see why support becomes stagnant when other companies who invest heavily don't end up where they need to be. They can't take the losses than a company like this can. With these losses and the layoffs, I think this zukerverse dream is about to come tumbling down.

During the holidays the division only brought in $727 million, that means the other 3 quarters must have been a catastrophe with less buyers rushing to get holiday deals. It really puts into question all the other VR participants out there or coming soon, what's their margins? What's their plan for profits?

 

[DeepEnigma]

It's not about the loss, it's about the push.

 

[Eddie-Griffin]

It's not about the loss, it's about the push.

The push to failure?

 

[LakeOf9]

VR is going to be huge!

 

[reksveks]

I haven't looked into meta's earning but it's moving

 

[Magic Carpet]

VR is going to be huge!

So huge that I wish Neogaf would make a VR sub thingy so I don't have to keep deleting them all manually.

 

[Max_Po]

Their shitty Meta thingy did more damage to the brand then the VR...

 

[El Pistolero]

Good Lord! Maybe it's time for Sony to acquire Ready at Dawn, and relieve Meta of unecessary costs.

 

[Ghost of Caelid]

Poorly managed, terribly obtrusive hardware, lack of understanding of what people want from the metaverse.

 

[Haint]

It's mind boggling where they could possibly be spending all this money. They've spent like 4-5 billion on software since Quest 2's release with nothing but an RE4 Gamecube port and Beat Saber song packs to show for it. How is that even possible? 5 billion US dollars on mobile powered games and experiences with literally nothing of merit or consequence produced. They must be employing 10's of thousands of people who literally do nothing 365 days a year. Like multiple entire buildings filled with those "day in my life at Facebook " Tiktokers that drink artisinal juices in meditation rooms all day.

 

[feynoob]

The push to failure?

It's not really a loss, when there is big potential there.

 

[midasmulligan]

takes a lot of money to carry an industry nearly single handedly, but it will also reap outsized benefits. Thanks for keeping this whole damn thing afloat Meta, love my QP

 

[DeepEnigma]

The push to failure?

The push.

The push, citizen. Now plug into the matrix's matrix.

They're not afraid to loss-lead like a lot of pushes have been the past 5+ years.

 

[Ronin_7]

Meta has deep pockets to keep this going wow

 

[Oddvintagechap]

They been losing that money cause they been buying shit left and right into their VR division.

They been reckless tho for sure.

 

[Punished Miku]

Pretty much a win/win for everyone.

We get cheap and accessible VR with lots of investment into potential advancements. And at the same time Facebook is weakened overall.

 

[Fafalada]

It really puts into question all the other VR participants out there or coming soon, what's their margins? What's their plan for profits?

Oculus always had a loss leading strategy, not sure what their expectations were even before Meta's Metaverse silliness.
Some other players were making money since 2016 though - it's debatable whether that mattered or not when markets were smaller though. Clearly the rate they're burning money now, it does.

 

[feynoob]

https://kotaku.com/facebook-metaverse-vr-2022-billions-13-billion-quest-2-1850062517


Over $4billion lost in the holiday season alone in 2022, which is when they were discounting the Quest 2 in many areas and tons of software. Over $13 billion overall for the whole year of 2022.

Makes you think twice about what the profit margins are on all this VR stuff. When even big sales of the Quest 2 last year compared to, well, every other headset didn't really generate enough sales profits or software profits to help reduce losses. No wonder Facebook had to raise the price of the Quest 2 for a time.

I see why support becomes stagnant when other companies who invest heavily don't end up where they need to be. They can't take the losses than a company like this can. With these losses and the layoffs, I think this zukerverse dream is about to come tumbling down.

During the holidays the division only brought in $727 million, that means the other 3 quarters must have been a catastrophe with less buyers rushing to get holiday deals. It really puts into question all the other VR participants out there or coming soon, what's their margins? What's their plan for profits?

Investment eats a lot of money and you don't see profits early.

 

[Rat Rage]

This would have never happend if VR had chosen the right slogan: "VR. Please be excited!"

 

[Ansphn]

Everytime I hear about Meta, they're losing billions from VR and I have not seen one killer game after all that investment.

 

[kittoo]

It's mind boggling where they could possibly be spending all this money. They've spent like 4-5 billion on software since Quest 2's release with nothing but an RE4 Gamecube port and Beat Saber song packs to show for it. How is that even possible? 5 billion US dollars on mobile powered games and experiences with literally nothing of merit or consequence produced. They must be employing 10's of thousands of people who literally do nothing 365 days a year. Like multiple entire buildings filled with those "day in my life at Facebook " Tiktokers that drink artisinal juices in meditation rooms all day.

Its not spent on quest 2 games. Most of it was spent on metaverse, that shitty virtual world thing meta is pushing.

 

[Gaiff]

Zukerberg: Guys, how did you burn through almost $14B?

The developers:

 

[Haint]

Its not spent on quest 2 games. Most of it was spent on metaverse, that shitty virtual world thing meta is pushing.

Have you actually seen the thing you're referring to? It literally looks like a College freshman's group Unity project. There's no way they spent a fraction of a fraction of a fraction of 5 billion on that shit.

 

[kittoo]

Have you actually seen the thing you're referring to? It literally looks like a College freshman's group Unity project. There's no way they spent a fraction of a fraction of a fraction of 5 billion on that shit.

Thats exactly why everyone is so baffled (though I think a lot of money would've gone to researching next headset and new tech etc also).

 

[PixelatedBeast]

takes a lot of money to carry an industry nearly single handedly, but it will also reap outsized benefits. Thanks for keeping this whole damn thing afloat Meta, love my QP

Carry? They didnt even come out with the first headset. I applaud the value proposition they have provided to give people access to a VR experienece on the go, but even the Oculus inventor will tell you that PSVR is just as important for the VR industry.

 

[StreetsofBeige]

It's mind boggling where they could possibly be spending all this money. They've spent like 4-5 billion on software since Quest 2's release with nothing but an RE4 Gamecube port and Beat Saber song packs to show for it. How is that even possible? 5 billion US dollars on mobile powered games and experiences with literally nothing of merit or consequence produced. They must be employing 10's of thousands of people who literally do nothing 365 days a year. Like multiple entire buildings filled with those "day in my life at Facebook " Tiktokers that drink artisinal juices in meditation rooms all day.

Its nuts how much they lose on VR. At $13B losses in a year they must have endless office buildings of VR workers at $200,000 each and the craziest expensive R&D tech.

And this amount already factors in the sales and profits they got from selling VR sets and whatever software sales they get from it.

 

[Buggy Loop]

Poor META

 

[solidus12]

PlayStation should snatch Ready At Dawn from them.

 

[TonyK]

Imagine the amount of money you must have to loss 13 billions and not shut down the VR division.

 

[Crayon]

Hopefully they keep at it. They've dragged the baseline down to cell phone graphics and it would be a disaster if they just cut and left the industry that way. I really hope the quest 3 has enough juice to not hold back pc and ps versions as much.

 

[Fbh]

If they focused on porn rather than VR second life (somehow with equally ugly graphics)

 

[feynoob]

Carry? They didnt even come out with the first headset. I applaud the value proposition they have provided to give people access to a VR experienece on the go, but even the Oculus inventor will tell you that PSVR is just as important for the VR industry.

Both are esential. They bring new ideas and technology that can enhance both devices.

 

[TheMan]

Did the metaverse thing ever come out?

 

[Mibu no ookami]

Keep seeing people say Sony should try to buy Ready at Dawn from them... What makes anyone think Sony is interested in Ready at Dawn and if they were wouldn't they have bought them when they had a chance?

 

[ZehDon]

Did the metaverse thing ever come out?

Yes it did! If you like fantastic worlds, incredible moments of discovery, and breath-taking experiences only possible in VR, I'd recommend not trying it, because it has none of that and is actually quite terrible.

 

[coffinbirth]

 

[Ribi]

Bullshit there's no way they poured in that much money. Probably losses from stock chalked up to the division.

 

[Barakov]

https://kotaku.com/facebook-metaverse-vr-2022-billions-13-billion-quest-2-1850062517


Over $4billion lost in the holiday season alone in 2022, which is when they were discounting the Quest 2 in many areas and tons of software. Over $13 billion overall for the whole year of 2022.

Makes you think twice about what the profit margins are on all this VR stuff. When even big sales of the Quest 2 last year compared to, well, every other headset didn't really generate enough sales profits or software profits to help reduce losses. No wonder Facebook had to raise the price of the Quest 2 for a time.

I see why support becomes stagnant when other companies who invest heavily don't end up where they need to be. They can't take the losses than a company like this can. With these losses and the layoffs, I think this zukerverse dream is about to come tumbling down.

During the holidays the division only brought in $727 million, that means the other 3 quarters must have been a catastrophe with less buyers rushing to get holiday deals. It really puts into question all the other VR participants out there or coming soon, what's their margins? What's their plan for profits?

 

[mckmas8808]

Good Lord! Maybe it's time for Sony to acquire Ready at Dawn, and relieve Meta of unecessary costs.

God I hope so. Ready at Dawn needs to be released

Poorly managed, terribly obtrusive hardware, lack of understanding of what people want from the metaverse.

I sometimes wish Jim Ryan and Playstation had a $4 billion a quarter budget to spend on PSVR2. Could you imagine what they'd do with that budget?

Have you actually seen the thing you're referring to? It literally looks like a College freshman's group Unity project. There's no way they spent a fraction of a fraction of a fraction of 5 billion on that shit.

It's mind-numbing. Unbelievable even. If it was found out that Zuck was money laudering with the VR funds. I'd believe it.

 

[MiguelItUp]

Can't say this is shocking at all. Everything that they were and have been conjuring looks.... not good at all, lol.

It's so hard to believe that they attempted to boast about so much, but then show what looked like game jam content.

 

[ResurrectedContrarian]

The bulk of this is surely due to the insane Metaverse development, which was always doomed. But they sold a ton of devices, so the question is whether they're ready yet to admit that the social / meta aspect is bullshit and just make it a 100% gaming division.

 

[Deerock71]

 

[In Cold Blood]

I'm waiting for VR to mature more before I jump in, but with the shit that Meta has done to quest I guess VRs future is all in Sony's hands.

 

[IntentionalPun]

The bulk of this is surely due to the insane Metaverse development, which was always doomed. But they sold a ton of devices, so the question is whether they're ready yet to admit that the social / meta aspect is bullshit and just make it a 100% gaming division.

Those devices are sold at a loss, likely a pretty steep one.

And are not selling much software.. aka games, for said devices.

They JUST passed $1.5 billion cumulative revenue for their VR store... over many years of selling devices at a loss.

Quest as a gaming device is a big money loser.

 

[James Sawyer Ford]

Makes you think twice about what the profit margins are on all this VR stuff. When even big sales of the Quest 2 last year compared to, well, every other headset didn't really generate enough sales profits or software profits to help reduce losses. No wonder Facebook had to raise the price of the Quest 2 for a time.

Facebook probably desperately wants Quest 3 to launch so they can reset expectations and justify a $600 price tag

PSVR2’s price is a bargain but Sony isn’t willing to take a loss. Soon Meta won’t either

 

[MayauMiao]

It's not about the loss, it's about the push.

Pushing their stock off the cliff?

 

[Ozzy Onya A2Z]

Clueless leadership at Meta.

 

[DenchDeckard]

How does it lose so much money?

 

[poppabk]

It's mind boggling where they could possibly be spending all this money. They've spent like 4-5 billion on software since Quest 2's release with nothing but an RE4 Gamecube port and Beat Saber song packs to show for it. How is that even possible? 5 billion US dollars on mobile powered games and experiences with literally nothing of merit or consequence produced. They must be employing 10's of thousands of people who literally do nothing 365 days a year. Like multiple entire buildings filled with those "day in my life at Facebook " Tiktokers that drink artisinal juices in meditation rooms all day.

They are spending it on non-gaming related stuff. Face recreation, quest pro, the horizon stuff.

 

[It's all in the wrist]

Pushing their stock off the cliff?

Poor timing, man.