Meta lost almost £3.5billion on the metaverse in just three months

Meta has reported that its metaverse division counted losses of almost £3.5billion in the fourth quarter of 2022.

Meta (the company formerly known as Facebook) announced that its VR and metaverse division Meta Reality Labs lost £3.486billion in the final quarter of 2022, compared to losses of £2.692billion in the same quarter the previous year. It’s the division’s biggest loss to date.

According to VentureBeat, revenue for the VR division was just £529 million in Q4, down from £715million a year ago.

In the same window, Meta cut 11,000 jobs, which was 13 per cent of its workforce.

Earlier in the year, Meta increased the price of its Meta Quest 2 VR headsets by £100, meaning the product now starts at £399.99.

At the time, Meta said the price was raised because it needs the money to “invest for the long term and keep driving the VR industry forward with best-in-class hardware, action-packed games, and cutting-edge research on the path to truly next-gen devices.” The company also introduced the Meta Quest Pro, a high-end headset that costs upwards of £1200.

In October, Meta announced the purchase of three game development studios, including the teams behind Iron Man VR and Resident Evil 4 VR.

However, Meta’s overall revenue for the quarter was over £26billion.

“Our community continues to grow and I’m pleased with the strong engagement across our apps,” said Meta CEO Mark Zuckerberg in an earnings call (via PC Gamer). “Facebook just reached the milestone of two billion daily actives. The progress we’re making on our AI discovery engine and Reels are major drivers of this. Beyond this, our management theme for 2023 is the ‘Year of Efficiency’ and we’re focused on becoming a stronger and more nimble organisation.”

It comes as, at the end of last year, Doom and Quake co-creator John Carmack left his role as consulting chief technology officer at Meta. Carmack shared he had “mixed feelings” about his ten-year career working on VR.

“We have a ridiculous amount of people and resources, but we constantly self-sabotage and squander effort. There is no way to sugarcoat this; I think our organisation is operating at half the effectiveness that would make me happy,” he wrote.

“VR can bring value to most of the people in the world, and no company is better positioned to do it than Meta,” he continued. “Maybe it is actually possible to get there by just plowing ahead with current practices, but there is plenty of room for improvement.”

In January, the company announced that it is to end support for the original Quest VR headset.