Mark Zuckerberg, CEO of Facebook, speaks during the virtual Facebook Connect event, where the company announced its rebranding as Meta, in New York on Oct. 28, 2021.
Michael Nagle Bloomberg | Getty Images
Facebook parent Meta lost $2.81 billion on $452 million in revenue from its virtual reality division, Reality Labs, during the quarter ending in June as it forecast a second consecutive quarter of declining revenue on Wednesday.
The substantial sum is the latest sign that CEO Mark Zuckerberg and Meta continue to spend heavily to pivot the social media giant to develop virtual reality and augmented reality products and the so-called “metaverse.”
It’s a substantial but affordable expense for a company that earned $8.36 billion in operating income on $28.82 billion in total sales during the quarter.
Zuckerberg and other Meta leaders believe that virtual and augmented reality headsets will be the major next-generation computing platform and are willing to spend heavily on technologies that might be years out and prototypes that aren’t ready to be released, as well as a substantial staff of technical experts, in order to compete with Apple, Google, Microsoft, and other companies eyeing the industry.
Meta’s Quest 2 headset is currently the most popular VR headset on the market, although the overall market remains small. Meta said earlier this week it will raise the price from $299 to $399.
Meta plans to release more advanced goggles later this year that will use cameras on the front of the device to “pass through” the real world to the user inside the headset.
Meta has also spent to acquire VR companies and startups that develop core headset technologies. But the FTC sued them on Wednesday to block it from buying the maker of the popular VR app Supernatural, suggesting that any future acquisitions would face significant regulatory scrutiny.