Meta Platform Inc. (formerly Facebook) released its Q1 2022 results with its dedicated metaverse unit, Reality Labs, losing $2.9 billion.
Meta’s Q1 2022 with Reality Labs losing $2.9 billion
Mark Zuckerberg’s company seems to be starting 2022 with a loss for the metaverse business. And indeed, from the Q1 2022 results released on Wednesday, Reality Labs is reported to have posted a loss of $2.9 billion in the first quarter of 2022.
This is an increased loss compared to Q1 2021, when Reality Labs was reported to have lost $1.8 billion.
On the flip side, the metaverse unit’s revenue also appears to be on the rise with earnings of $695 million in Q1 2022, compared to $534 million in Q1 2021.
In the earnings report, Zuckerberg’s company points out:
“We expect 2022 total expenses to be in the range of $87-92 billion, lowered from our prior outlook of $90-95 billion. We expect 2022 expense growth to be driven primarily by the Family of Apps segment, followed by Reality Labs”.
Reality Labs is described as “too expensive”
Reality Labs focuses on virtual and augmented reality products and services, through which users can socialize, work and play games.
According to reports, in its corporate finances earlier this year, Reality Labs had already reported a loss of more than $10 billion in 2021.
Of these, Meta’s CFO, David Wehner reportedly confirmed that around $4 billion of losses were due to employee costs, research and development and the cost of items sold.
Despite Reality Labs’ losses, possibly due to high cost, the company’s total revenue for Q1 2022 is $27.9 billion, up from $26.1 billion a year ago.
Meta’s first physical shop
While financially there are losses for the metaverse business, Meta recently decided to open the company’s first physical shop, dedicated to selling hardware functional to the metaverse, and to get Facebook and non-Facebook users to understand the new social dimension.
Meta’s first shop will be located in Malmo Park, California, and will feature giant flexible screens on all the walls, on which the virtual experience of the user who decides to try out the helmet, headphones and glasses will be projected.
A way to help people “normalize” the behaviours created by these new technologies and also to help them understand the dynamics and meaning.