Facebook, now Meta, is putting all of its eggs in the Metaverse basket, but will the push pay off? It'll take a lot of time to find out, but currently Facebook's Metaverse is burning a massive hole in the Big Tech company's oversized pockets.
Via CNBC, Meta revealed that Metaverse development is an extremely expensive venture, more bad news after a terrible year for the company. Even worse, 2021 is just the latest loss of revenue for Facebook's Metaverse.
How much has Facebook's Metaverse lost?
During Meta’s 2021 earnings report, the company revealed financials surrounding Reality Labs, previously known as Oculus. Previously just a virtual reality platform, the newly-named Reality Labs is one of the company's biggest investments.
While Facebook's Metaverse is heavily backed financially, Reality Labs is deep in the red. In 2019, the division managed a net loss of $4.5 billion against $501 million revenue. Afterwards, in 2020, that loss increased to $6.62 billion against $1.14 billion in revenue.
Finally, for 2021, Reality Labs suffered a $10.19 billion revenue. However, this was also matched with the division’s largest revenue stream at $2.27 billion. In other words, while sales of Oculus Quest headsets and software is at an all-time high, future investments are resulting in more loss.
Is this part of the plan?
Meta isn't haemorrhaging money on Reality Labs on a whim. Despite the unfathomably large losses, the company is willing to spend on creating their version of The Metaverse. In fact, losses are only expected to pile up over the next decade of development.
Meta CFO David Wehner explained that Reality Labs’ losses are going to “increase meaningfully” over the next year. Most of the losses are attributed to the research and development of new technology alongside employment costs.
The company isn't planning for its Metaverse to pay off anytime soon. Instead, the company is planning to spend the next 15 years creating its virtual world, hoping to recreate the dystopian Metaverse where humanity will work, play and relax.