Facebook won’t stop spending big on building the metaverse, even as Wall Street has long begged it to cut costs.
After publishing its results for the third quarter on Wednesdaythe company revealed that it has lost more than $9 billion so far this year in Reality Labsthe Facebook department that takes care of the entire metaverse.
The figure includes nearly $4 billion of spending in the third quarter alone. Labs lost $10 billion in all of 2021, and the company has already predicted spending will grow unabated.
“We anticipate Reality Labs’ losses in 2023 to grow significantly year over year,” the company has said.
Sometime after 2023, Facebook, that last year changed its name to Metasays he will start “pacing” his investment in Reality Labs in order to achieve his goal of hgrow the company’s overall operating income over the long term.
During a phone chat with analysts, CEO Mark Zuckerberg said spending on Reality Labs will increase in 2023 due to launch of a new virtual reality headset and to the payment of salaries to engineers and other people who work in the metaverse.
Facebook shares fell 18% in after-hours trading. It is its lowest level since 2016.
The commitment to spend as much in the metaverse comes a few days after Altimeter Capital, one of Facebook’s main investors, write an open letter to the company titled Time to Get Fit (It’s time to lose weight).
In it, he asked her to cut costs. Specifically, she complained to Facebook that cap spending on the metaverse at $5 billion a year.
In the days leading up to Altimeter’s public petition, Wall Street analysts worried about the seemingly slow pace of development of the metaverse and of Facebook’s flagship product, Horizon World.
A main part of the immersive digital world that Zuckerberg is trying to build are the avatars. So far these seem rudimentary and don’t do much of what Facebook showed off at its recent developer conference.
“Captain Zuckerberg continues to steer the Meta ship down an unknown path called the Metaverse, and he is determined to spend billions and billions of dollars in an effort to reinvent himself,” said Neil Campling, head of TMT research at Mirabaud.
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Zuckerberg slashing all of Wall Street: He anticipates his metaverse business will lose even more money next year