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Meta’s titular division just took another blow.
The social media giant disclosed this afternoon that its metaverse-specific division suffered losses of $2.81 billion this quarter. That puts the division’s year-to-date losses at an eye-popping $5.77 billion.
The division, Facebook Reality Labs (FRL), is distinct from Facebook, Instagram, Messenger, and Whatsapp, and focuses on building the hardware, software, and content central to Meta’s push into the metaverse.
In its Q2 2022 earnings report, FRL generated $452 million in revenue in the period, down 35% from last quarter. Last year, the division posted a staggering annual loss of $10.2 billion. It is currently on track to exceed that figure in 2022.
“This is obviously a very expensive undertaking over the next several years,” conceded Meta CEO Mark Zuckerberg. “But as the metaverse becomes more important in every part of how we live… I’m confident that we’re going to be glad we played an important role in building this.”
When Zuckerberg changed Facebook’s name to Meta last fall, he re-oriented the entire company’s ethos towards dominating the metaverse: an immersive, future version of the internet navigated by digital avatars that Zuckerberg is betting will become central to commerce, work, entertainment, and social interaction.
Though the company’s multi-billion dollar metaverse play has not yet paid off, Zuckerberg attempted to convince shareholders this afternoon that it’s a savvy long-term strategy.
“By helping to develop these platforms, we’re going to have the freedom to build these experiences the way that we and the overall industry believe will be best, rather than being limited by the constraints that competitors place on us,” said Zuckerberg. “I feel even more strongly now that developing these platforms will unlock hundreds of billions of dollars, if not trillions, over time.”
The company’s overall revenue improved by just over 3% this quarter, to $28.8 billion. Despite that, after the Q2 earnings report was released, the company’s stock fell some 4% in after-hours trading to $163.81 at time of writing.