The American social network Meta parent company is preparing for significant losses in 2023 due to the metaverse.
The American company Meta (recognized as extremist and banned in the Russian Federation) expects “significant” losses due to the development of the metaverse in 2023. The company announced this in its financial report for the third quarter.
In the past quarter alone, the VR division called Reality Labs cost the company almost $3.7 billion. Since 2022, the division has completely “eaten” Meta’s budget by $5.8 billion. However, it does not seem that Metaverse plans have been curtailed in Meta.
“We believe Reality Labs’ operating loss in 2023 will rise significantly from last year,” Meta said.
What exactly the company plans to spend the increased Reality Labs budget is unclear. Meta says the costs will help the company achieve its goal in the long run. The time frame for the creation of the metaverse in Meta decided not disclosed.
Let’s remind you the earlier lack of progress at Meta in the direction of virtual reality has caused criticism from investors. Hedge fund Altimeter Capital Management, which owns a 0.1% stake in META, called on the American company to regain investor confidence and limit spending on Reality Labs.
The fund also called for the dismissal of at least 20% of the company’s employees. According to Altimeter Capital CEO Brad Gerstner, Meta’s investment in “an unknown future is oversized and terrifying, even by Silicon Valley standards.” Amid the company’s financial report, META shares fell 24.6% to $99.3. The market capitalization of Meta Platforms was reduced to $266.6 billion.