Facebook parent company Meta notched $23 billion in profit in 2022 despite one glaring problem in its 2022 financials: a loss of $13.7 billion on its virtual reality division.
CEO Mark Zuckerberg has long wanted virtual reality to be the new crown jewel of his tech empire, but big-ticket investments in the division coupled with low usership and user retention raise the question of whether Zuckerberg’s hope is a miscalculation of the marker.
The multibillion-dollar loss isn’t anything new nor is it expected to stop anytime soon—Meta’s virtual reality division, Reality Labs, lost $10.2 billion in 2021, and Meta’s 2022 third quarter report said the company expects “Reality Labs operating losses in 2023 will grow significantly year-over-year.”
Zuckerberg signaled his interest in the virtual reality world back in 2014, when Meta—then Facebook—purchased Oculus, a virtual reality headset and software company. His growing interest in the metaverse—an expansive interactive virtual world in which users can essentially carry out their lives online—became apparent with the launch of Reality Labs in August 2020 and with the October 2021 announcement that the company was changing its name from Facebook to Meta. “Over time, I hope we’re seen as a metaverse company,” Zuckerberg said at the time.