Mark Zuckerberg said his company went all in on the metaverse last year. On Wednesday, he showed how much he had to spend on it.
Meta, the company Mr. Zuckerberg founded as Facebook, said its Reality Labs division, which makes virtual reality glasses, smart glasses and other yet-to-be released products, lost more than $10 billion in 2021 as it built the company. . . Those products are key to Zuckerberg’s vision of the metaverse, a next generation of the Internet where people would share virtual worlds and experiences across various software and hardware platforms.
It was the first time that Meta announced the results of its hardware division. In the past, the company has failed to meet those numbers, as products such as virtual reality headsets have been a small part of its overall business, which relies on social networking and digital advertising. Investing $10 billion in the metaverse is more than five times what Facebook paid to buy the Oculus VR business in 2014 and 10 times what it paid to buy Instagram in 2012.
Expenditure dropped the company’s quarterly profit, which fell 8 percent to $10.3 billion, compared to a year earlier. Shares of Meta’s stock plunged about 22 percent in after-hours trading.
“We had a solid quarter as people continued to use our products to stay connected and businesses continued to use our services to grow,” Zuckerberg said in a statement. “I am encouraged by the progress we have made over the past year in some key growth areas such as Reels, commerce and virtual reality, and we will continue to invest in these and other key priorities in 2022 as we build the metaverse. ”
The revelations illustrate how much Meta is pushing in a new direction. In October, Mr. Zuckerberg announced that he planned to spend a lot of money on the metaverse over the next few years, a major shift for a company that has become mired in endless controversies over social networks with misinformation and hate speech. Meta has since embarked on a major internal transformation, restructuring itself and pushing employees to join its augmented reality and virtual reality teams.
Meta is in a full-blown race against other tech giants to claim ground in the theoretical metaverse. Last month, when Microsoft said it was buying video game maker Activision Blizzard for nearly $70 billion, the software maker cited the deal as a building block for the metaverse, even though Activision doesn’t produce virtual reality games. Google has also been working on metaverse-related technology for years and Apple has its own devices in the works.
Financing Meta’s expansion into the metaverse was the main advertising activity, which continued to grow. The company said revenue in the three months ended December was up 20 percent to $33.7 billion, compared to the same period a year earlier. Wall Street analysts had forecast a profit of $10.9 billion on revenue of $33.4 billion.
The company also announced plans to change its stock ticker so that its shares would trade under the symbol META on the Nasdaq Stock Exchange rather than FB.