The massive image: Mark Zuckerberg’s Metaverse ambitions proceed to seem like a cash pit, costing Meta tens of billions of {dollars} during the last two years. The corporate’s 2022 year-end monetary statements compound prior heavy losses from Actuality Labs, however Meta’s management stays dedicated to the enterprise.
Meta’s monetary statements for This autumn 2022 present that its VR division’s losses elevated in comparison with its critical cash burn from prior quarters within the 12 months. Nevertheless, that did not cease Meta’s shares from experiencing certainly one of their finest days.
Actuality Labs hemorrhaged $4.3 billion in This autumn 2022. Together with the $3.7 billion burnt in Q3, the $3 billion sunk in Q2, and the $2.96 billion thrown away in Q1, Meta’s Metaverse division losses for 2022 complete $13.7 billion. That quantity follows the $10.2 billion Actuality Labs misplaced all through 2021.
As the prices mounted final 12 months, CEO Mark Zuckerberg maintained that the corporate’s efforts would repay within the subsequent decade and that pondering hasn’t modified. Within the This autumn earnings name, CFO Susan Li mentioned Meta expects Actuality Labs to lose more cash in 2023 however will proceed what it considers a long-term funding.
Final 12 months, Meta launched its newest VR headset for enterprise operations –the $1,500 Quest Professional. The corporate expects to launch a less expensive consumer-oriented mannequin this 12 months to succeed the Meta Quest 2. Nevertheless, VR headset gross sales and shipments had been down in 2022 in comparison with 2021, casting doubt over Meta’s focus within the sector.
Meta’s VR division additionally misplaced legendary programmer John Carmack final 12 months. In December, he left the corporate after repeatedly expressing concern over inefficiencies in its method to constructing the Metaverse. Meta additionally laid off 11,000 staff the earlier month –about 13% of its workers.
The stark numbers from Actuality Labs accompany Meta’s annual and This autumn revenue and income losses. Fourth quarter income fell by 4 % to $32.2 billion, whereas internet revenue for the quarter was down 55 % at $4.7 billion. Whole 2022 income was down 1 % for the 12 months at $117 billion, and internet revenue for the 12 months fell 41 % to $23 billion.
Though the numbers look dreary, they exceeded analyst expectations. As a consequence of that glass-half-full outlook and Meta’s introduced $40 billion in share buybacks, the corporate’s shares rallied this week. Meta’s market cap rose 27 % in sooner or later, a greater than $100 billion bounce.
Though the corporate’s inventory noticed its finest day in a decade this week, that solely returns it to the place it was final June. Meta hasn’t begun to regain the half a trillion {dollars} of worth it has misplaced since late 2021.