Facebook Reality Labs lost $3 billion during first quarter
Facebook’s parent company has announced that during the first quarter of this year it had revenues of $27.9 billion, improving on last year’s results by 7% and far exceeding analysts’ expectations. As usual, this torrent of millions is almost entirely due to Facebook’s advertising activity, which has grown in unique users after the small but alarming drop recorded at the end of 2021.
That Facebook remains one of the biggest money printing machines on the Internet is not news, in any case. What is interesting is that its big numbers hide data that in another company would be disastrous, such as the nearly $3 billion lost by Facebook Reality Labs (FRL), the Meta/Facebook division dedicated to developing virtual reality devices.
As stated by Meta, FRL generated gross revenues of $695 million and losses of $2.96 billion; practically $1 billion per month. Proportionally, the losses are even greater than those declared in 2021, when Meta began publishing the disaggregated results of its divisions and declared losses of $10.2 billion from FRL activity.
The point is that Facebook already took this result for granted. Mark Zuckerberg already announced that it planned to increase its investment in virtual and augmented reality with the aim of Meta becoming a dominant force when these technologies finally take off among the general public, even if that reduces Meta’s profits. And Zuckerberg doesn’t expect that to change in the medium term, he told investors:
‘It won’t be until these products really come to market and scale in a meaningful way, and until this market grows into something big when [virtual and augmented reality] will contribute significantly in revenue or profit. We’re paving the way for what we expect to be a very exciting 2030. […] I recognize it’s expensive to build something like this. It’s something that’s never been built before.
The next step in the creation of the metaverse (or rather access to it) has a name: Project Cambria. This is the internal name of a new high-performance virtual reality viewer that will incorporate advanced features such as eye tracking and sensors capable of capturing the user’s facial expressions to represent them in their avatar. Something that according to Zuckerberg will be useful in order to replace the laptop at work with one of these devices, which already gives clues that Cambria will not be a device for games like Quest 2.