Meta's VR/AR division had its best and worst quarter as total losses pass $42 billion

[midian182]

What just happened? Few company divisions could have their best quarter ever, generating $1 billion in revenue, while also experiencing a record operating loss of $4.65 billion. But then Meta's Reality Labs, the VR/AR business responsible for its metaverse ambitions, knows a lot about losing money. Since the end of 2020, it has hemorrhaged more than $42 billion.

Meta's fourth-quarter earnings results showed that Reality Labs managed to pass the $1 billion revenue milestone in the fourth quarter of 2023. That's up from $727 million in the same period a year earlier, partly due to the launch of the Meta Quest 3 and Ray-Ban Meta smart glasses in October.

Meta CEO Mark Zuckerberg said on a call with analysts that Ray-Ban maker EssilorLuxottica was "planning on making more [smart glasses] than we'd both expected due to high demand." As for the Meta Quest 3, it's already the third most-popular VR headset on the Steam Hardware and Software survey.

While that sounds like good news, Reality Labs experienced the largest operating loss it's ever reported: $4.65 billion. That's even more than the $4.26 billion analysts were expecting.

Meta's financial report (click to enlarge)

Meta CFO Susan Li warned that the company expects Reality Labs' operating losses to continue, increasing "meaningfully" year-over-year due to its ongoing product developments in AR/VR and ecosystem scaling.

Meta Labs total losses for 2023 exceeded $16 billion. Since Meta first started reporting the division's financial performance back in Q4 2020, it has lost more than $42 billion.

Research firm Circana reports that sales of VR and AR headsets and glasses dropped almost 40% last year to $664 million. It'll be interesting to see how Apple's $3,500 Vision Pro headset affects the market.

Despite the billions of dollars in losses, Zuckerberg's faith that VR, AR, and mixed reality experiences represent the future of social media and computing in general is unwavering.

Zuckerberg also talked again about his desire to create an artificial general intelligence (AGI) at Meta, saying the technology was a requirement for the next generation of services.

"It's clear that we're going to need our models to be able to reason, plan, code, remember and many other cognitive abilities in order to provide the best versions of the services that we envision," Zuckerberg said.

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https://www.techspot.com/news/101742-meta-vrarmetaverse-division-had-best-worst-quarter-total.html

 

[redgarl]

I can`t wait to experiment the metaverse so I could be harass by ads for buying things in the real world...

 

[Theinsanegamer]

I love, billions of money spent, and it's full of nothing but scammers and empty buildings surrounded by scams and forced advertisement, all from a game that looks like it belong son the PS2 and runs like its on a PS1.

Just take a look at what they have "built"

 

[GodisanAtheist]

NGL the Quest 2 at $250 (and even the Q3 for $500 is an OK price if its significantly better than the Q2) is extremely tempting to me to buy just to see what the deal is with VR. I already have a bunch of PCVR titles that I got as bonus/freebees for purchasing the standard game so I have a bit of a library built in and it would be nice to have something to play the odd VR game that does catch my eye (specifically HL:Alyx).

This whole metaverse thing is just a damn joke though, it just makes your average Zoom/Teams meeting about 1000% more cumbersome than it needs to be. All the drawbacks of in-person and virtual meetings in one.

 

[RandomWAN]

VR as it exists now is never going to move beyond the game and simulation immersion stage (primarily flight/driving) with the technological limitations and cost of entry. To achieve the Metaverse as envisioned by Zuck & Co., the technology will have to more resemble what is seen in "Ready Player One" and be relatively cheap and portable.

 

[Dreadcthulhu]

So is that VR division actually some sort of cover for a money laundering operation? I just can't understand how they can spend $42 billion in the space of a few years, with only some okay hardware & down right crappy software to show for it. I mean, with $42 billion they could have built the most advanced rockets in the world, and launched thousands of internet satellites into space, and still had billions left over. Or Facebook could have gobbled up a bunch of smaller internet or tech companies and integrated their stuff into Facebook; stuff like Etsy, Ebay, Discord, Roblox, Zoom, Dropbox, Robinhood, as examples. $42 billion would have been enough to buy a couple of those.

 

[Julio Franco]

Meanwhile ….

https://x.com/morningbrew/status/1753475867223740544?s=46&t=6UKh1xLV5ofv1nl9bSLuKQ

 

[toooooot]

Meta's verse is a good example of when a technology needs its right time.
After spending so much money it still does not look like it would start bringing billions tomorrow.
It probably needs much more advancement in software than anything else now.

 

[loki1944]

Meta's verse is a good example of when a technology needs its right time.
After spending so much money it still does not look like it would start bringing billions tomorrow.
It probably needs much more advancement in software than anything else now.

I'd say it had its time and failed; just like 3D. Tech that makes sense establishes its value instantly. Like the tank or chicken nuggets.

 

[FaTaL]

No one in this generation or the next few are going to adopt VR. Until I can jack my azz into the matrix, its pointless. I sure as hell aint dropping 500-5000 for a heavy lightbulb helmet to strap on my head and burn out my eyesockets.

 

[Theinsanegamer]

So is that VR division actually some sort of cover for a money laundering operation? I just can't understand how they can spend $42 billion in the space of a few years, with only some okay hardware & down right crappy software to show for it. I mean, with $42 billion they could have built the most advanced rockets in the world, and launched thousands of internet satellites into space, and still had billions left over. Or Facebook could have gobbled up a bunch of smaller internet or tech companies and integrated their stuff into Facebook; stuff like Etsy, Ebay, Discord, Roblox, Zoom, Dropbox, Robinhood, as examples. $42 billion would have been enough to buy a couple of those.

No kidding. Space X spent $5.2 billion last year. And they can land a rocket upright.

It's gotta be either money laundering or some ploy to acquire more shares through shell companies while selling his own.