Meta’s pivot cost the social media giant billions of dollars, but the company’s founder and CEO Mark Zuckerberg says the firm isn’t giving up on the metaverse anytime soon.
Meta (META) hasn’t given up on the metaverse, despite a very public pivot to artificial intelligence.
“Our investments in AI continue. We remain fully committed to the Metaverse vision as well. We’ve been working on both of these two major priorities for many years in parallel now, and in many ways the two areas are overlapping and complementary,” Mark Zuckerberg said in an earnings call.
The focus on the metaverse hasn’t been profitable for the social media giant as it continues to lose billions of dollars due to the initiative. During 2022, Meta’s Facebook Reality Labs (FRL) division, which is responsible for metaverse, lost $13.7 billion on revenue of $2.2 billion, up from a loss of $10.2 billion on revenue of $2.3 billion in 2021.
“This is an ambitious long-term horizon, multi-faceted roadmap. There are lots of components to the Reality Labs portfolio across VR, AR, Metaverse, social platforms, neural interfaces, and we really have a long-term time horizon for evaluating the return on our investments here,” Zuckerberg continued. “I can’t guarantee you that I’m going to be right about this bet. I do think that this is the direction that the world is going in.”
In its most recent earnings, Meta reported a fiscal second-quarter net income of $7.79 billion, up from $6.7 billion in the previous year, with revenue climbing 11% to $32 billion.
Daily active users for Facebook and Meta’s family of apps, including Instagram, also saw an increase of 5% and 7%, respectively. Meta’s Threads app – designed as a Twitter replacement – has experienced a 60% drop in active users from its launch week, according to a report from Similarweb.
The stock closed over 1% higher at $294.47 on Wednesday and was trading at nearly $319 in after hours trading.