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Meta’s Reality Labs posts $3.85 billion loss in first quarter

Despite increasing competition from Facebook and Apple in the virtual reality market, Meta has unable to significantly reduce its losses from investing in the metaverse.

Meta reported in its first-quarter earnings report on Wednesday that its Reality Labs segment had an operating loss of $3.85 billion. The metaverse segment generated $440 million in revenue, rising almost 30% from $339 million the previous year and accounting for only about 1% of Meta’s overall revenues for the quarter.

Analysts expected a $4.31 billion operating loss and $512.5 million in revenues for the quarter, according to StreetAccount.

Reality Labs has lost more than $45 billion since the end of 2020, when Meta started reporting the business division separately.

Meta CEO Mark Zuckerberg has referred to the metaverse as “the next frontier,” envisioning a digital society that promotes both efficiency and enjoyment. In 2021, he renamed his corporation from Facebook to Meta to reflect his vision for the future of computing.

Metaverse technology development is still in its early stages and is expensive.

In September, the business debuted the Quest 3 VR headset, the latest generation of their mixed reality technology, which starts at $499. Apple began selling the $3,499 Vision Pro in February, promoting a “spatial computing” experience.

Meta stated on Monday that it will collaborate with third-party hardware firms to develop new VR headsets based on the Meta Horizon operating system, which currently drives its Quest headsets. Zuckerberg stated that while Apple “basically won out” in the phone market due to its closed ecosystem, Meta’s move intends to ensure that the “open model defines the next generation of computing.”



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