Mark Zuckerberg is convinced that the future of the Internet, gaming, and even the workplace hangs in the metaphor, so much so that he is willing to spend billions of dollars each year to give Facebook a run for its money. In the first quarter of the year, Reality Labs, the company’s metaverse and augmented reality (AR) platform, reported losses of $ 3 billion and is on track to record its highest losses ever recorded this year. But Zuckerberg is not worried.
Zuckerberg recently made metaplatforms earnings calls, revealing that the company has generally had a great start to the year. The company earned $ 27 billion in the three months ending March 31, with the “Facebook app family” responsible for the big quarter. This includes Facebook, WhatsApp and Instagram.
Zuckerberg has also decided to reveal to investors how his investment is performing in a group of platforms and projects that he sees as the future of online social experiences. None of this is bigger than Reality Labs, the subsidiary that the company is betting on to become the leader of the meta-verse. It was formerly known as Oculus and focused almost exclusively on VR headsets and related virtual games, but since Zuckerberg renamed Facebook Meta, it is now focused on Metaverse.
Reality Labs outperformed expectations and generated $ 695 million in the first quarter. However, it still had a loss of $ 2.9 billion, the largest loss for any Facebook-owned project and subsidiary. In fact, the project accounted for less than 3% of Facebook’s quarterly revenue, but 20% of the company’s expenses.
The losses do not worry Zuckerberg at all. “I recognize that it is expensive to build this, it is something that has never been built before. And it is a new paradigm for data processing and social connectivity, ”he told investors.
“We expect to be significantly better at making money than others in the space, and we expect it to be a lasting benefit to our platforms as they grow,” he said. he adds.
Zuckerberg further told investors that losses can be expected as Reality Labs not only builds products and technologies for today, but also for the future.
“… we now fund basic product teams to build our future products, two or three releases into the future. Because when you design hardware … it’s multi-year plans that you build and in a way determine all the parts that need to be be part of it, ”he explained.
The $ 3 billion loss puts Reality Labs on track for the worst year yet. Last year, the project burned for more than $ 10.1 billion, almost double its $ 6.6 billion loss by 2020. In 2019, it lost $ 4.5 billion.
In the fourth quarter of 2021, it reported a loss of $ 3.3 billion, more than double the $ 1.45 billion of Google’s Other Bets segment, which includes self-driving cars and robots, lost in the same quarter.
Losing so much money and still being ready to invest more in the future is all proof that Zuckerberg is betting big on Metaverse. After all, he renamed his company Meta Platforms to indicate that the brave new virtual world would play a major role in the future of his company.
It is a calculated effort. For a company the size of Facebook, a $ 10 billion loss will not have as much of an impact as it would for smaller startups looking for metaverse products. Plus, Facebook can afford to keep burning billions off for the next decade before investors start frowning, especially if the other products continue to perform as well as they did before.
Another benefit of Facebook is its VR headset business, one of the largest in the world in this sector with its range of Oculus headsets.
But even with all that money and perks, Zuckerberg may not want to control the meta-verse that he has on social media. On the one hand, the meta-verse is built around blockchain technology, where people can fully and provenly own their digital twins. Platforms like Omniscape built on public, decentralized, unchanging, large-scale blockchain networks (Bitcoin SV is the only network that meets all four) will dominate the meta-verse.
Research has already shown that people do not want to use a metaverse that Zuckerberg controls. A poll by the Advokate Group showed that 87% of respondents want to use metaverse platforms built on decentralized blockchain networks, with three out of four saying they do not want a virtual world powered by Zuckerberg.
See: BSV Stories – Episode 7: What is the Metaverse?
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