Zuckerberg’s Metaverse Obsession Cost the Company A Whopping Loss of $13.7 BILLION

Investors are losing a ton of money thanks to Mark Zuckerberg's fantasy of a world where everything is connected. The company's virtual reality technologies and projects are housed in Reality Labs, which posted an operating loss of $4.28 billion in the fourth quarter, bringing the division's total operating loss for 2022 to $13.72 billion, according to Meta's earnings report released after the bell on Wednesday. For the newly formed Meta, the organization formerly known as Facebook, the first full year was difficult. Zuckerberg changed the company's name in late 2021 and declared that its future rested in the metaverse, a virtual world where people would work, shop, play, and learn. However, it is currently only a cost center and Meta is still an internet advertising business. Sales of Quest headgear helped Reality Labs create $727 million in the fourth quarter and $2.16 billion in total revenue for 2022, down from $2.27 billion in 2021. In other words, although making up less than 2% of all sales at Meta, the division lost more than six times as much money as it did in revenue the previous year. According to StreetAccount, analysts anticipated Reality Labs to report a quarterly operating loss of $4.36 billion on revenue of $715.1 million. As of early December, 2022, sales of VR headsets in the US were down 2% from the previous year, according to information provided to CNBC by the research firm NPD Group. Meta said in July that it would be increasing the cost of its Quest 2 VR headset by $100. At the time, the corporation claimed that the price increase was required to reflect inflationary pressures. In October, Meta unveiled its more pricey Quest Pro VR gear, positioning it as a $1,500 enterprise-workplace tool. This week, Meta is offering a $400 discount on its premium VR gear for a certain period of time. By the second part of the decade, according to Zuckerberg's comments to CNBC's Jim Cramer last summer, "get to approximately a billion people in the metaverse conducting hundreds of dollars of business." But before Mark Zuckerberg's visions come true, Meta must invest many billions of dollars in creating the VR and augmented reality technologies that are the foundation of the metaverse idea. The early results have not exactly pleased shareholders. When compared to the previous year, Meta lost about two-thirds of its worth due to rising metaverse prices, a deteriorating economy, more competition from TikTok, and Apple's. Following the company's announcement of a $40 billion buyback and fourth-quarter earnings that above analysts' sales forecasts on Wednesday, the stock increased by more than 17% in extended trade. But before Mark Zuckerberg's visions come true, Meta must invest many billions of dollars in creating the VR and augmented reality technologies that are the foundation of the metaverse idea. The company said last year that it expects “Reality Labs operating losses in 2023 will grow significantly year-over-year.” “Beyond 2023, we expect to pace Reality Labs investments such that we can achieve our goal of growing overall company operating income in the long run,” Meta said at the time. The early results have not exactly pleased shareholders. When compared to the previous year, Meta lost about two-thirds of its worth due to rising metaverse prices, a deteriorating economy, more competition from TikTok, and Apple's. Following the company's announcement of a $40 billion buyback and fourth-quarter earnings that above analysts' sales forecasts on Wednesday, the stock increased by more than 17% in extended trade.