- Meta’s metaverse wing Reality Labs lost more than $3 billion in Q3 2022
- The metaverse department expects the losses to increase in 2023 but plans to mitigate the them later next year
- This comes after a Meta investor urged the tech company to cap investments to the metaverse division
Meta’s metaverse department Reality Labs’ Q3 revenue report lost more than $3 billion in the last quarter, contributing to a 25% share price drop. Interestingly, the company expects the losses to increase in 2023 and beyond but has plans “to pace” investments to the metaverse department. The revelation comes a few days after a Meta investor urged the company to stop funding its metaverse ambitions.
Metaverse Black Hole to Keep on Sucking
In a revenue report published on Wednesday, Reality Labs netted a Q3 revenue of $285 million which was below the expected $400 million. The small gains left an overall loss of over $3.65 billion in the metaverse division’s financial books. According to the tech company, the losses are expected to be higher in 2023 although it plans to “pace” its investments to Reality Labs in a bid to turn around the “overall company” fortunes in the future.
The $3 billion loss is an addition to a $2.8 billion loss it suffered in the second quarter. Despite the huge losses, Meta’s boss Mark Zuckerberg is confident that opportunities in the metaverse are worth suffering temporary financial setbacks as it positions itself for “stronger revenue growth.”
Market Value Dips by $67 Billion
Since the start of 2022, Meta’s metaverse arm has lost more than $9 billion, something that has caused a section of investors to urge the tech firm to stop funding explorations in the virtual world. On Monday, for example, a Meta shareholder Brad Gerstner expressed his worries about Meta’s staggering investments in the virtual world.
Shortly after announcing the disheartening losses, Meta Platforms Inc lost roughly $67 billion in market value after investors went on a stock dumping spree. Although Meta sees potential in the virtual world, its metaverse-focused products are yet to gain any meaningful adoption.