$13.7B setback won’t stop Meta’s commitment to the metaverse-Zuckerberg

Meta CEO Mark Zuckerberg reiterated his company’s commitment to the metaverse during a Q4 earnings call. Despite the heavy operating losses recorded by its Reality Labs business in 2022, Mr. Zuckerberg stated that Meta has no reason to deviate from its long-term metaverse strategy.

Meta’s Q4 earnings were released on February 1, revealing that its metaverse segment, Reality Labs, lost almost $14 billion in 2022. Reality Labs is the umbrella section for Meta’s AR, VR, and mixed-reality endeavors. This would be the highest-ever loss in a year for Reality Labs since the business started publishing financials. The metaverse section lost $4.3 billion in Q4 alone, proving to be particularly costly. Nevertheless, the Reality Labs division generated $727 million in revenue in 2022.

When quizzed about the organization’s efficiency viz-a-viz Reality labs, Zuckerberg maintained that Meta would remain steadfast in its metaverse strategy. According to him, “none of the pointers so far require us to shift our strategy with the Reality labs in the long term”. Following Meta’s launch of the Quest Pro Virtual Reality headset in October, Zuckerberg hinted at the launch of another “next-generation consumer headset” in 2023.

Susan Li, Meta’s CFO, stated the company expected losses on the Reality Labs business to increase in 2023. However, according to her, the losses would not deter Meta from investing, given the “significant long-term opportunities” that abound.

“We still expect our full-year Reality Labs losses to increase in 2023, and we’re gonna continue to invest meaningfully in this area given the significant long-term opportunities that we see.”

Susan Li, Meta Chief Financial Officer (CFO)

Meta beat Wall Street expectations as its overall revenue in Q4 hit $32 billion. As a result, the company’s stock rose by almost 20% shortly after the bell on Tuesday.