Meta reports Q2 operating loss of $2.8B for its metaverse division

by | Jul 27, 2022 | Technology

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Meta‘s second-quarter results showed us that Mark Zuckerberg’s vision of the metaverse is still very expensive. And its losses in its VR division hit $2.8 billion in the second quarter, even as its virtual reality hardware and software sales continue to grow.

Meta has started breaking out its results from its Reality Labs division, (former known as Facebook’s Oculus division) to give investors a sense of how much it is investing in the next version of the internet, or the metaverse, the universe of virtual worlds that are all interconnected, like in novels such as Snow Crash and Ready Player One.

The company signaled some bad news (at least for VR software companies) yesterday when it said it would raise the prices for its Meta Quest 2 VR headsets by $100 each on August 1. It is raising prices for peripheral products too.

Meta Reality Labs generated $452 million in revenue in the second quarter ended June 30, up from $305 million a year ago and $695 million in the first quarter. The loss in the quarter was $2.8 billion in Q2, compared with a loss of $2.4 billion a year earlier and $2.96 billion in the first quarter.

Overall net income was $6.69 billion on revenue of $28.8 billion in Q2, compared with net income of $10.4 billion on revenue of $29.1 billion a year earlier. Analysts expected net income of $7.03 billion on $28.9 billion. Meta’s daily active users were 1.97 billion, up 3% from a year ago. On a monthly basis, Meta’s platforms reach more than three billion people.

“The metaverse is a massive opportunity for a number of reasons,” Zuckerberg said in the analyst call. “It enables deeper social experience where you feel a realistic sense of presence with other people no matter what you are doing,” whether that’s games or meetings.

He said the company is spending money to build it in a way that would be the best platform possible, without the constraints that “our competitors place on us,” meaning Apple and its fees. Zuckerberg said that the metaverse could unlock hundreds of billions of dollars or trillions over time.

He said it was obviously very exp …

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