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Meta Reports $3.99 Billion Quarterly Loss as Zuckerberg Invests More in Metaverse

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Meta Reports $3.99 Billion Quarterly Loss as Zuckerberg Invests More in Metaverse

Meta, under the leadership of CEO Mark Zuckerberg, continues to invest heavily in its metaverse initiatives while implementing cost-saving measures across its social media business. In its Q1 earnings report released on Wednesday, Meta disclosed that its Reality Labs division, responsible for developing virtual and augmented reality technologies for the metaverse, reported an operating loss of $3.99 billion.

Despite bringing in tens of billions of dollars a quarter in advertising sales, Meta’s Reality Labs unit generated only $339 million in revenue during the first quarter.

The loss, however, showed improvement as it decreased from $4.28 billion in the previous quarter despite earning only $727 million in revenue. The figures from the previous year revealed that Reality Labs incurred an operating loss of $13.72 billion on $2.16 billion in sales, indicating that VR and AR technologies have not yet gained widespread adoption.

Zuckerberg has announced 2023 as the “year of efficiency” for the company and has introduced significant cost-cutting measures, such as layoffs that are expected to impact around 21,000 employees.

Despite its ongoing cost-cutting efforts, Meta continues to invest heavily in the metaverse following its rebranding from Facebook in late 2021. According to information shared with CNBC by the market research company NPD Group, VR headset sales in the United States dropped by 2% compared to the previous year as of December 2022.

Meta reduced the prices of its Quest 2 VR headset and the high-end Quest Pro in March. The Quest 2, which was previously sold for $500, is now priced at $430, reflecting a $70 reduction. The Quest Pro, which originally cost $1,500, saw a price reduction of $500 and is now available for $1,000.

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