Meta's VR woes continue with massive financial losses

Many of us still hope that virtual reality is the future of gaming (and more besides), but it those hopes aren’t translating into immediate success for one of the largest players in the VR business. Reality Labs, Meta’s VR division, has posted billions of dollars of losses for 2022.

All in all, Reality Labs reported a $13.72 billion loss for last year, casting serious doubts on whether Meta can continue to throw money into VR at the rate it has been for the last few years.

The reason for the losses are, as most will be unsurprised to hear, Horizon Worlds. Despite continued efforts from Mark Zuckerberg, and billions of dollars in funding, Horizon Worlds and the metaverse as a whole have failed to take off. Corporate sponsored areas of Horizon Worlds remain empty, and a leaked report from inside Meta even admitted that the company’s own employees are avoiding using it, mentioning bugs and quality reasons as reasons to ignore it.

Things are so bad that Reality Labs is actually losing ground on previous years. In 2021, it brought 17% more revenue than 2022, so it seems its popularity is actually falling, rather than increasing.

Amusingly, the headset itself, the Meta Quest 2, is actually something of a success. Seen as one of the more affordable ways into virtual reality, with both standalone and PC tethering options, the Quest 2 has sold rather well. That said, Meta raised the price of the headset by $100 in July 2022, taking the base headset to $400, rather than $300, so that success may tail off.

Thankfully for Meta, it’s a loss it can afford to take. Overall profits for the owning company of Facebook sit at $32.1 billion, so there’s still plenty of money to try and make the metaverse a thing. However, such large losses don’t look good, especially with momentum failing to gather, and Mark Zuckerberg may face pressure from shareholders to cut back or cut loose the struggling VR division. This is especially pertinent when you remember Meta fired 11,000 people in November 2022, citing covid, “macroeconomic downturn, increased competition, and ads signal loss” as the reasons for the mass layoffs.

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