Mark Zuckerberg’s bet on the metaverse is off to an expensive start

Mark Zuckerberg’s metaverse pivot is off to slow start. The company now known as Meta lost just over $10 billion on its Reality Labs division in 2021, according to its fourth-quarter earnings report.

“This fully realized vision is still a ways off,” Zuckerberg said of Meta’s metaverse investments. “And although the direction is clear, our path ahead is not yet perfectly defined.” Zuckerberg said the company planned to launch a new “high-end” VR headset as well as a mobile version of its Horizon VR experience.

It’s the first time the company has shared the financial performance of the AR and VR division that’s central to its metaverse ambitions (Facebook acquired Oculus in 2014). That the metaverse isn’t yet turning a profit isn’t a surprise. The company said last quarter that its AR and VR investments would result in a $10 billion loss. But combined with flat user growth and continued hits to its advertising business, the company’s fourth-quarter results sent Meta’s stock into a nosedive Wednesday.

Among the concerns: Facebook’s daily active users (DAUs) declined from 1.93 billion last quarter to 1.29 billion, a change that Zuckerberg attributed in part to increased competition from TikTok. “We’re in the …read more