Meta lost $13.7 billion on Reality Labs in 2022 as Zuckerberg's metaverse bet gets pricier
Meta's Reality Labs unit recorded a $4.28 billion operating loss in the fourth quarter, bringing its total for 2022 to $13.72 billion.The business houses Meta's ambitious metaverse technologies, which CEO Mark Zuckerberg has said will be the company's future.Facebook changed its name to Meta in late 2021, but the company still relies on advertising for substantially all of its revenue.
Mark Zuckerberg's dream of a future in the metaverse is costing investors a boatload of money.
In its earnings report after the bell on Wednesday, Meta said its Reality Labs division, home to the company's virtual reality technologies and projects, posted a $4.28 billion operating loss in the fourth quarter, bringing its total for 2022 to $13.72 billion
It was a tough first full year for the new Meta, the company formerly known as Facebook. In late 2021, Zuckerberg changed the company's name and said its future would be in the metaverse, a digital universe where people will work, shop, play and learn.
But for now, it's just a cost center, and Meta is still an online ad company.
Reality Labs generated $727 million in the fourth quarter, and $2.16 billion in revenue for all of 2022 - a decline from $2.27 billion in 2021 - including sales of Quest headsets. In other words, the division lost more than six times the amount of money it generated in revenue last year, while accounting for less than 2% of total sales at Meta.
Analysts were expecting Reality Labs to record an quarterly operating loss of $4.36 billion on revenue of $715.1 million, according to StreetAccount