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- Meta reported its first ever revenue drop in the second quarter of this year.
- Losses were higher than the previous quarter.
- Zuckerberg is optimistic about Meta and metaverse.
Below par performance in Q3
Meta’s earnings report for the third quarter was released on Wednesday. Meta’s Facebook Reality Labs (FRL) division reported $285 million in revenue. The figure is below analysts’ expectation of $406 million. In the second quarter, the revenue was $452 million. The FRL division includes virtual reality and augmented reality.
FRL’s net loss in the third quarter stood at $3.7 billion which is 32% higher than the previous quarter’s loss ($2.8 billion). “Beyond 2023, we expect to pace Reality Labs investments such that we can achieve our goal of growing overall company operating income in the long run,” a company press release stated. The release also stated that losses were expected to grow “significantly” through 2023.
Meta investors want the company to cut spending on Metaverse as the growth in the number of users is decelerating. Ad expenditure was also cut. In 2021, the FRL division lost $10.2 billion with revenue of $2.3 billion. However, Meta has resolved to spend amply on FRL as it believes the division is essential for growth in the future.
Nevertheless, the company as a whole posted a positive performance: Meta posted a revenue of $27.7 billion, higher than estimated revenue (27.4 billion). The report showed projections pegged in the range of $30 billion to $32.5 billion.
Meta’s shares fell by over 15% which is around $40 billion during extended trading hours. In its previous quarterly earnings report, the Facebook parent company reported its first ever revenue drop. Revenue for the company as a whole (Meta)
Mark Zuckerberg is optimistic about Meta’s future
The CEO and founder of Facebook, Mark Zuckerberg expressed confidence regarding Meta and Metaverse. In a conference call with employees, he iterated that ignoring metaverse and its potential would be a “mistake.” However, he addressed concerns regarding Meta’s future.
Zuckerberg sounded pepped up about Meta’s Quest Pro VR headset. He felt that the device could aid in completing work via mixed and virtual reality; he foresaw more workers using the device to complete work.
Starting at $1499, the Quest Pro VR headset allows users to engage with other users in a high resolution mixed reality environment. Mixed reality is the combination of Virtual reality and Augmented reality. Virtual reality is used in games to offer an immersive experience while augmented reality uses real-world settings to produce customized visuals over the real. The game Pokemon Go is a great example of what augmented reality can be used for.
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.
