Meta’s VR Division Reports $13.7 Billion Loss in 2022

It’s not looking rosy for Meta’s VR operations, at least in a financial sense. In an earnings update(Opens in a new window), released last week, the company revealed its Reality Labs VR and AR division lost a hefty $13.7 billion in 2022. That’s $3.5 billion more than the $10.2 billion operating loss it recorded in 2021.

Meta has been plowing funding and human resources into its Reality Labs division for years now, and according to The Verge(Opens in a new window), prior to layoffs late last year the division had 17,000 employees. 

The company, then called Facebook, bought the VR firm Oculus for $2 billion back in 2014, before purchasing VR studio Beat Games in 2019, and VR Fitness App startup Within just this month.

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In less than appetizing news for investors, Reality Labs brought in less revenue last year than it did in 2021, making $2.16 billion compared to the $2.27 billion it made two years ago.

And to make investors’ stomachs churn even more, Meta CFO Susan Li said that the company is expecting even more losses this year. In an earnings call (via TechCrunch(Opens in a new window)) she made it clear that Meta was unrelenting in its bid to roll out the metaverse and invest in VR, “We’re going to continue to invest meaningfully in this area given the significant long-term opportunities there we see.” 

Meta is planning to launch a new mixed-reality headset later this year, while Apple is believed to be planning to launch a new AR/VR headset, its working title “xrOS”, in Fall 2023. 

Meanwhile, Meta CEO Mark Zuckerberg doubled down on his belief that increasing investment in VR and the Reality Labs division was the right long-term strategy for his company: “None of the signals that I’ve seen so far suggests that we should shift the Reality Labs strategy long-term. We are constantly adjusting the specifics of how we execute this, so I think that we’ll certainly look at that as part of the ongoing efficiency work.” 

The efficiency work he mentions come as the company leans down in other areas; in November it notably downsized its staff by a significant 13%, shedding roughly 11,000 jobs.