“This (Metaverse) is obviously going to be a very expensive business for the next few years,” said Mark Zuckerberg.
The virtual reality (VR) and virtual reality division of Meta Reality Labs posted a seventh consecutive quarterly loss, but CEO Mark Zuckerberg has remained steadfast in his investment in the technology, which he calls an “opportunity.” great”.
During Meta’s Q2 earnings call on July 27, Zuckerberg acknowledged that such losses could continue for a few more years until its VR apps and Metaverse platform are mature enough to take advantage of the potential. Take advantage of the “huge opportunity” worth “hundreds of billions of dollars”
“The Metaverse is a huge opportunity for a number of reasons. I feel more strongly now that developing these platforms will unlock hundreds of billions of dollars, if not trillions of dollars over time.”
“This is obviously going to be a very expensive undertaking over the next few years,” Zuckerberg added, “I believe we’ll be glad we played a key role in building this out.”
The extended loss in actual Labs operations was revealed in Meta’s Q2 earnings report earlier in the day. Such losses are not uncommon for parts in the research and development phase.
Reality Labs builds VR and augmented reality (AR) applications to help Meta users connect across its various social platforms, including Metaverse, with Oculus’ line of VR headsets.
In addition to the losses, Reality Lab’s revenue has been on a downward trend since 2021, and its operating margin has also been on a downward trend since 2020. $11.1 billion in revenue and profit margins The 29% announced in Q2 2022 is the lowest in the past seven quarters.
Reality Labs lost $2.9 billion in Q1.
He said that the economic situation is worse now than it was a quarter ago, and his opinion is corroborated by the fact that the Federal Reserve has raised interest rates by 0.75 percentage points. Monday in a row on July 27 before the Meta earnings call. took place, adding:
“We appear to have entered an economic downturn that will have a widespread effect on the digital advertising business. In this environment, we focus on long-term investments that will help us grow stronger. “
Despite the economic difficulties, Zuckerberg is confident that his company and its subsidiaries will emerge from the current economic downturn as “a stronger and more disciplined organization.” “.
He attributes this confidence to the investments his company is making now to ensure it can maintain its leadership position in an industry that may be undergoing change to match. with more Metaverse platforms.
Meanwhile, the Federal Trade Commission (FTC) has filed a lawsuit against Meta alleging that the company is aiming to monopolize the entire Metaverse market. The complaint says that Meta’s move in the space hinders innovation and “competitive competition” among US-based companies seeking to build Metaverse platforms and applications.