Meta, the parent company of Facebook, reported a $2.81 billion losses for its metaverse division in the second quarter as the company booked a lower-than-expected profit and its first revenue decline since going public a decade ago.
Reality Labs, which is responsible for developing metaverse-oriented technology like the VR headsets, generated $452 million in revenue in the second quarter, down 35% from last quarter. Reality Labs’s second quarter loss was 15% higher than the $2.4 billion reality labs lost last year in the same period.
Last year, the division recorded an annual loss of $10.2 billion.
This is obviously a very expensive commitment over the next several years,” said Meta CEO Mark Zuckerberg. “But as the metaverse becomes more important in every part of how we live… I’m confident that we’re going to be glad we played an important role in building this.”
The company said it expected the unit’s revenue to be lower in the third quarter compared to the second quarter. However, the falling revenue will not prevent Meta from increasing spending, the company has made commitment to spending even more on the division for the next several years.
Like many global companies, Meta is deal with difficult situation due to revenue pressure from the strong dollar, as sales in foreign currencies amount to less in dollar terms
The $452 million revenue was a small fraction of the $28.4 billion generated in the second quarter by Meta’s family of apps, including Facebook, Instagram and Whatsapp.
Meta’s total revenue fell 1 percent year-over-year to $28.8 billion in the second quarter ended June 30. Meta blamed a tough macroeconomic environment and cutbacks in its customers’ advertising budgets for its disappointed quarter.