Apr 27, 2024 17:00:00

Meta has recorded monthly losses of 160 billion yen in the VR sector since June 2022

Facebook

changed its name to Meta in 2021 to focus on the metaverse, but Reality Labs , the AR/VR development division that is supposed to be at the heart of the metaverse business, has reportedly been losing $1 billion (about 160 billion yen) every month since June 2022.

Meta loses another $3.8 billion on VR/AR | GamesIndustry.biz
https://www.gamesindustry.biz/meta-loses-another-38-billion-on-vrar

Facebook Has Lost $1 Billion Every Month on VR Since June 2022
https://kotaku.com/facebook-meta-1-billion-every-month-loss-vr-metaverse-1851438748

On April 24, 2024 local time, Meta announced its financial results for the first quarter (January to March) of 2024. Meta's total sales for the same period increased 27% year-on-year to $36.45 billion (approximately 5.76 trillion yen), and net income increased 117% year-on-year to $12.36 billion (approximately 1.95 trillion yen).

It was also revealed that Reality Labs' sales for the same period increased 30% year-on-year to $440 million (approximately 70 billion yen), while the division's expenses were approximately $4.3 billion (approximately 680 billion yen). In other words, Reality Labs recorded a loss of approximately $3.85 billion (approximately 610 billion yen) in the first quarter of 2024.

Meta - Meta Reports First Quarter 2024 Results
https://investor.fb.com/investor-news/press-release-details/2024/Meta-Reports-First-Quarter-2024-Results/default.aspx

Reality Labs is the division that develops VR headsets such as Quest 2 and Quest 3, the metaverse project Horizon Worlds , and high-end VR and AR technologies. However, as mentioned above, Reality Labs has not generated any profits in the first quarter of 2024, and has 'never generated any profits to date,' according to Kotaku, an overseas game media outlet.

Meta began reporting Reality Labs' income and expenditures separately in 2020, and since then, Reality Labs has never made a profit. On the contrary, except for one quarter, Reality Labs has recorded expenditures of $2 billion (about 320 billion yen) every quarter. Therefore, it has been pointed out that Reality Labs will be recording losses of $1 billion per month from June 2022 onwards.

The graph below shows quarterly revenue on the left and quarterly revenue (green) and expenses (red) on the right.

Adding up the losses through the first quarter of 2024, Meta has recorded losses of more than $45 billion (approximately 7.1 trillion yen) so far for Reality Labs alone. In addition, in its financial results announcement for the first quarter of 2024, Meta predicted that losses in the VR division would continue to grow, and Meta CEO Mark Zuckerberg also predicted that Reality Labs 'won't be profitable until the 2030s.'

Kotaku states, 'With all this money being spent, you'd expect everyone to be putting on a VR headset and jumping into the metaverse. But in reality, consumer spending on VR is declining, and other companies aren't investing in the metaverse that Meta is promoting. Even Apple's expensive Apple Vision Pro seems to be failing ,' pointing out the sluggish growth of VR and the metaverse.

Kotaku points out that the reason why VR has not become widespread even though Meta, one of the world's largest technology companies, has invested more than $40 billion (about 6.3 trillion yen), is that 'the simple answer is that people don't want VR. ' Also, major technology companies are shifting their focus from the metaverse to AI.