Meta lost more than 4 billion dollars on the metaverse in the last financial quarter

VR zuckerberg with VR friends.
(Image credit: Meta)

Meta, the social network formerly known as Facebook that is definitely going to rename itself Facebook in a few years, has announced that its metaverse division has made a huge loss, again, despite last year's stunning addition of legs to avatars. The VR and metaverse division, Meta Reality Labs, lost $4.279 billion in the fourth quarter (compared to a mere $3.304 billion in the same quarter last year), with revenue of $727 million ($877 million a year ago).

The Reality Labs division used to be known as the Oculus division, before Meta decided it didn't like that name, and is now the umbrella under which both VR and the wider metaverse project is accounted for. This was the quarter that saw Meta increase the price of the Quest 2 headsets by $100, and launched the ludicrously priced Meta Quest Pro headset ($1500), which explains some of the revenue dip. But the real headline is that Meta doesn't care about these losses, seeing the metaverse project as its long-term future rather than the current money pit it is.

Meta says it's continuing to invest in the upcoming Meta Quest 3 headset, which is aimed at the broader market, the Meta Quest Pro which is intended as a business product, and other projects yet-unnamed including glasses and other platforms (a platform in this context being software as well as hardware). 

"2022 was a challenging year, but [...] the software and social platform might be the most critical part of what we’re doing" said Meta CEO Mark Zuckerberg on an analyst call (thanks, VentureBeat). The investors don't seem troubled by the losses at all, it has to be said, with Meta's share price actually rising around 15% after the news.

This is probably because Meta's overall revenue for the quarter was $32.165 billion with net income of $4.652 billion, and even if that's still significantly down on the same quarter last year ($33.671 billion revenue, $10.285 billion income) that's still five billion dollars generated from aunts liking your dog photos. More importantly, from an analyst's perspective, daily active users across Meta products were 2.96 billion on average in December (up 5% year-on-year) and monthly active users were 3.74 billion (up 4%). These figures slightly exceeded Meta's own targets, 

"Our community continues to grow and I’m pleased with the strong engagement across our apps. Facebook just reached the milestone of two billion daily actives,” said Zuckerberg. "The progress we’re making on our AI discovery engine and Reels are major drivers of this. Beyond this, our management theme for 2023 is the 'Year of Efficiency' and we’re focused on becoming a stronger and more nimble organization."

Oh dear. Maybe Meta staff should start polishing up their CVs. Interestingly enough this may have been a slight nod to the departed John Carmack, the videogame legend who joined Meta before stepping back and becoming a consultant and then eventually leaving.

The reference to Reels is the panic every social media company is experiencing at the explosive popularity of TikTok: this is Facebook's shortform video equivalent. But Meta's overall sights remain firmly set on the metaverse we're definitely all going to be living our lives in, and how it can incorporate AI across its products, and it considers the Meta Quest Pro the first of what will be many mixed-reality (MR) devices.

"The MR ecosystem is relatively new and I think it is going to grow over the years,” said Zuckerberg. Well, he would say that.

Rich Stanton

Rich is a games journalist with 15 years' experience, beginning his career on Edge magazine before working for a wide range of outlets, including Ars Technica, Eurogamer, GamesRadar+, Gamespot, the Guardian, IGN, the New Statesman, Polygon, and Vice. He was the editor of Kotaku UK, the UK arm of Kotaku, for three years before joining PC Gamer. He is the author of a Brief History of Video Games, a full history of the medium, which the Midwest Book Review described as "[a] must-read for serious minded game historians and curious video game connoisseurs alike."