Meta reported that it lost $4.65 billion in the fourth quarter in its metaverse-focused Reality Labs division.
Whatever you think of that loss, it means that Meta’s metaverse division is still spending a lot of money on research and development.
In the previous third quarter, Meta reported that it lost $3.7 billion in the third quarter in its metaverse-focused Reality Labs division. Reality Labs is Meta’s metaverse, virtual reality and augmented reality division, with businesses such as the Meta Quest 3 and the Ray-Ban Meta Glasses.
Reality Labs reported a loss of $4.65 billion for the three months ended December 31, higher than the loss of $4.28 billion in the same quarter a year ago. For the year ended December 31, Reality Labs lost $16.1 billion, higher than the year before at $13.7 billion.
Revenue for Reality Labs was $1.07 billion in Q4, up from $727 million a year ago. For the 12 months ended December 31, the company had $1.89 billion in Reality Labs revenue, down from $2.12 billion a year ago.
CFO Susan Li said in an analyst call that Meta is still investing in Reality Labs for the long term and lossses will meaningfully increase.
Of course, Meta’s Facebook, WhatsApp and Instagram family of apps are hugely profitable, generating $21 billion in profit for the quarter, resulting in a net profit from operations of $16.4 billion.
Overall Meta is on the mend, with profits of $14.0 billion on revenue of $40.1 billion in the quarter, up from profits of $4.6 billion on revenue of $32.1 billion a year ago.
Meta has about 67,000 employees, up from 66,000 in the previous quarter and down 22% from a year ago. CEO Mark Zuckerberg said Meta has now been trying to catch up on hiring to fill open positions.
Meta is getting competition tomorrow from Apple as it launches the Apple Vision Pro, which is launching with 600 tailored apps.
Given the pace of innovation around AI, one analyst asked if we’ll get to the metaverse quicker. Zuckerberg said AI is going to make all of the products and services we use better.
“It’s hard to know exactly where it plays out,” he said.
For the work in Reality Labs, it’s possible that smart glasses with AI assistance built in will be the killer app and the immersive holodeck will come later, he said.
“I think we’ll figure that out in the coming years,” he said. “The two go hand in hand” regarding AI and the metaverse.
Zuckerberg said that Apple’s plan to comply with the European Union’s new rules on alternative app stores has such onerous terms for developers that he doesn’t think anyone would create alternative web shops under those terms.