Zuckerberg Thinks Meta’s $2.8 Billion Loss In Q2 Is Normal
The virtual reality (VR) and metaverse division of Meta Reality Labs recorded a loss of $2.8 billion in the second quarter, but CEO Mark Zuckerberg has remained steadfast in his investment in the technology, which he calls a “huge opportunity”.
Meta Reality Labs recorded a 7th consecutive quarter loss
In Meta‘s Q2 earnings report on July 27, Zuckerberg acknowledged that such losses could continue for several more years until its VR apps and Metaverse platform are mature enough to take advantage of the new data. “Hundreds of billions of dollars” worth of “huge opportunity”. According to him, this is a very expensive business in the next few years.
“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.(…). I’m confident that we’re going to be glad that we played an important role in building this.”He said
In Q2 financial announcement earlier in the day, it was made clear that Reality Labs had been experiencing a prolonged period of operational losses. For divisions in the research and development stage, such losses are common.
In order to integrate Meta users using its numerous social platforms, such as the Metaverse, with the Oculus range of VR headsets, Reality Labs creates VR and augmented reality (AR) applications.
In addition to the losses, Reality Lab’s revenue and operating margin have also been heading downward since 2021 and 2020, respectively. The Q2 2022 sales of $11.1 billion and the margin of 29% reported were the lowest in the previous seven quarters.
This is the 7th consecutive loss with $2.8 billion.
Despite the economic troubles, Zuckerberg is confident that his company and its subsidiaries will come out of the current economic downturn as “a stronger and more disciplined organization.”
He attributed this confidence to the investments his company is making now to ensure it is able to remain a leader in an industry that may be undergoing a shift to accommodate more Metaverse platforms.
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