Meta’s metaverse-related losses topped $3.74 billion over the second quarter with the Big Tech player spending $7.7 billion on its virtual reality business so far in 2023.
Its second-quarter 2023 results released on July 26 saw Meta report an 11% revenue gain compared to the same quarter last year, totaling $31.9 billion.
Its metaverse-focused Reality Labs revenue topped $276 million, its lowest in two years and a nearly 40% drop compared to Q2 2022.
On an earnings call, Meta’s financial chief Susan Li said Reality Labs’ revenue drop was due to lower sales of its Quest 2 virtual reality (VR) headset. The department’s expenses were up 23% to $4.0 billion partly caused by a growth in staffing costs.
Reality Labs’ operating losses are set to increase through 2023, Meta said. It cited VR-related product development efforts and further investments in its metaverse as the reason for the losses extending.
On the call, Meta chief Mark Zuckerberg said the firm is focusing on artificial intelligence “in the near term and the metaverse over the longer term.”
He reiterated Meta is “fully committed” to its metaverse alongside its AI investments and said the two areas are “overlapping and complementary.”
He added its AI model Llama is being used to build a number of products that will help users “create worlds and the avatars and objects that inhabit them as well” and said he would share more later in the year.
Meta’s stock price jumped on the earnings and is up over 7% in after-hours trading to around $320 according to Google Finance data. Meta shares have gained nearly 140% year-to-date but are still off from their September 2021 all-time high of over $378.