Building a metaverse certainly is not cheap as financial records of Meta's Reality Labs show. Its Q4 2021 earnings, which was recently revealed, shows the company's growing losses in 2021.
How Much Does Meta Spend on the Metaverse?
According to the story by CNBC, the Reality Labs division is basically where CEO Mark Zuckerbger's vision of building the metaverse is set to take shape. The financial records of the division, however, also includes revenue coming from Meta's Quest VR headset as well as other hardware that the company puts out.
So far, Reality Labs has actually been costing Meta quite a lot of money from 2019 to 2021. The amount of losses are as follows, according to CNBC:
In 2019, they were able to rake in a revenue of $501 million and a net loss of $4.5 billion
In 2020, they were able to rake in a revenue of $1.14 billion and a net loss of $6.62 billion
In 2021, they were able to rake in a revenue of $2.27 billion and a net loss of $10.19 billion
Meta's Metaverse Losses Resulted in Large Chunk Off of Profits
The 2021 losses are currently in line with what Meta's CEO announced regarding the company's investment when it concerns Reality Labs.
This, however, is not the last year that Meta expects to be at a loss. This is because the company is expecting operating losses for 2022 to "increase meaningfully."
In addition, it has been pointed out that Meta would have been able to make more in 2021 if it were not for Reality Labs. Their profits should have been over $56 billion.
Google Lost Less on Its Self-Driving Cars and Health-Care Tech
To put into perspective, Alphabet's (Google's parent company) self-driving cars and health-care tech lost just $1.45 billion in Q4 of 2021 in comparison to the $3.3 billion loss of Meta's Reality Labs.
Per Meta, the $4.2 billion in losses was attributed to a few factors, which include research and development, employee costs, and total costs of items sold.
What makes Meta advantageous when it comes to creating the metaverse is that it has "unlimited amounts of money" to spend on building projects, according to the report.
Meta Investors Could wait Up to 15 Years
Executives have also already explained to investors that "it could take up to 15 years to fully realize their vision." This means that the company still has around a decade or more to make things work or else they risk have impatient investors.
It should also be noted that, according to an article by Protocol, Meta was able to generate a revenue of $33.7 billion in Q4 of 2021. The company, however, warned that its ad business "would be negatively affected by lower prices and a shift towards less-profitable video formats this quarter."
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This article is owned by Tech Times
Written by Urian B.
