Metaverse investments will continue, Zuckerberg said in an earnings call that revealed Meta spent $5 billion in the fourth quarter on its Reality Labs virtual reality division.
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Meta spent $5 billion on metaverse projects in the fourth quarter of 2022. Which is about 25% of what the social media giant spent on its family of apps — Facebook, Instagram, Messenger and WhatsApp — combined.
The metaverse division, Reality Labs, lost $4.3 billion in Q4 — bringing its 2022 total to $13.7 billion.
That's for a metaverse where avatars still don't have legs.
But stockholders had big grins as Meta predicted Q1 2023 revenue would be as much as $28.5 billion — better than it was before Apple cut off Meta's access to iPhone data — and planned a $40 billion stock buyback. Shares spiked almost 20%.
As far as Meta's future metaverse plans, Zuckerberg doubled down again during the earnings call's Q&A, saying, "none of the signals that I've seen so far suggest that we should shift the Reality Labs strategy long-term." A little later, CFO Susan Li added:
"We still expect our full year Reality Labs losses to increase in 2023 and we're going to continue to invest meaningfully in this area given the significant long-term opportunities that we see."
Seeing the Metaverse
The first thing Zuckerberg pointed to when he began speaking about metaverse plans was the new Quest Pro, a mixed reality headset that brings together augmented reality (AR) and virtual reality (VR) with advanced features like eye tracking combined with much higher-resolution screens.
Calling it "the first mainstream mixed-reality device," Zuckerberg said the reason Meta is "focused on building these platforms is to deliver better social experiences than what's possible today on phones." He added:
"Even though most of our Reality Labs investment is going towards future computing platforms — [AR] glasses, [AR/VR] headsets, and the software to run them — as the technology develops, most people are going to experience the metaverse for the first time on phones and start building up their digital identities across our apps."
In a nod to the selfie crisis, Zuckerberg said Meta is "continuing to make progress with avatars."
Notably, the firm just launched avatars on WhatsApp in Q3, and more than 100 million people have created their own, with 20% using it as their profile picture (PFP).
It was, he said, "an interesting example of how the family of apps and metaverse visions come together."
Which is Meta's biggest advantage in building the metaverse. That family of apps now has a combined 3.7 billion users, with Facebook racking up two billion daily active users.