Meta expects to lose even more money due to the Metaverse in 2023

Meta expects to take big losses again due to Reality Labs and its metaverse, but Mark Zuckerberg is convinced “it’s going to pay off.”

A year later, switching to the Metaverse is still more expensive. Reality Labs is losing more money than ever, the parent company said in its latest financial report. It lost $2.8 billion in the third quarter of 2022 (up from $2.6 billion last year). And as CFO Dave Waverer warned, that won’t change anytime soon: “We expect Reality Labs’ 2023 operating loss to be even larger.”

Meta expects to lose again with Reality Labs and its metaverse

Meta has already posted a $10 billion loss to Reality Labs in 2021. The “next generation of Quest consumer headsets,”by which I mean the Meta Quest 3, will arrive “next year,”but according to Mark Zuckerberg, “the next computing platform”remains a top priority. Of course, this will require several generations of products and services, but according to Meta’s CEO, “[their] work will be of historic significance and lay the foundations for a completely innovative way of interacting.”with each other, with others and integrate technology into our lives.”

Mark Zuckerberg also warns that the company could face “immediate revenue problems.”The company is reporting a loss of $28 billion this quarter, which is in line with analysts’ forecasts but “still falls short of what was expected”according to the CEO. The latter also confirmed that Meta will continue to freeze recruiting to deal with weak growth. “Some teams will get bigger, but others will stay in place or shrink next year. […] Overall, we expect to end 2023 with the same salary or slightly less than today.”

On the other hand, the Meta “family of apps” continues to grow, and Instagram and WhatsApp have reached important milestones: the former surpassed 2 billion monthly active users, the latter surpassed 2 billion daily active users.

Mark Zuckerberg also reiterated his desire to make the company’s services more of a “discovery engine”that would make user threads more driven by recommendations, which would help Menlo Park better fight TikTok.

But Mark Zuckerberg is convinced that “it will pay off”

But he also explains that big investments in the metaverse may eventually pay off. Investors remain skeptical about the issue, with a major shareholder recently saying the company has “lost investor confidence.”This skepticism was also present in the presentation of financial results for the third quarter. The analyst, in part, said: “I think you can sum up investor sentiment this way: there are too many experiential bets today compared to winning bets. Everyone would like to know why the Meta thinks this will succeed.”

To which Mark Zuckerberg replied: “There is a difference between something experimental and not knowing how good it will be when it is finished. […] Working on the metaverse is a long-term job in terms of effort. But, I don’t know, I’m sure it will pay off.”