Meta, Facebook’s parent company, has reported a loss of $2.8 billion on Reality Labs, its metaverse project.
The metaverse arm has missed on profits for the second quarter in a row.
Reality Labs posted earnings of $452 million, a decrease from $695 million of the previous quarter. The division previously reported a $2.9 billion loss in the first quarter of 2022.
With total sales for the second quarter of 2022 coming in at $28.82 billion, below projections of $28.9 billion for the quarter, the firm underperformed overall. Earnings per share were $2.46, whereas it was expected to be $2.54.
Zuckerberg said during the earnings call on Wednesday that losses would persist for a number of years for the metaverse section before VR applications were developed enough to take advantage of the opportunity worth "hundreds of billions of dollars".
He said, “The Metaverse is a massive opportunity for a number of reasons. I feel even more strongly now that developing these platforms will unlock hundreds of billions of dollars, if not, trillions over time.”
He also added, “This is obviously a very expensive undertaking over the next several years. I’m confident that we’re going to be glad that we played an important role in building this.”
Despite the string of losses, Meta has said it is committed to spending even more on the metaverse division for the next several years.
CEO Mark Zuckerberg had announced during Meta’s first quarter earnings call that the company's metaverse division is now "building the foundation for a very successful 2030s."
Apart from the string of losses, the Federal Trade Commission (FTC) has also spelled trouble for Reality Labs. The regulatory body has launched a lawsuit against Meta on Wednesday claiming that the company is attempting to dominate the upcoming metaverse sector.
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