Meta Platforms' 'Metaverse' Division Loses $3B in 1Q

Facebook's parent company reported revenue of $695 million for the division, which beat analysts' expectations.

AccessTimeIconApr 27, 2022 at 8:32 p.m. UTC
Updated Apr 27, 2022 at 10:25 p.m. UTC

Nelson Wang is CoinDesk's news editor for the East Coast. He holds BTC and ETH above CoinDesk's disclosure threshold of $1,000.

Meta Platforms (FB) posted a first-quarter loss of $2.96 billion in its recently created Facebook Reality Labs (FRL) division, which comprises its augmented and virtual reality operations, according to its earnings report released Wednesday.

  • Meta announced that it would be breaking out results for the division to show the performance and investments in a group that it considers key to the next generation of online social experiences.
  • FRL generated revenue of $695 million in the first quarter, a small fraction of the $27.2 billion generated in the quarter from Meta’s family of apps, which include Facebook, Instagram and WhatsApp. Analysts were expecting revenue of $683 million for the "metaverse" division.
  • Meta previously estimated FRL would reduce its overall operating profit by about $10 billion in 2021 and said it was committed to spending even more on the division for the next several years.
  • Overall, Meta’s adjusted quarterly earnings per share of $2.72 beat analysts' average estimate of $2.56, according to FactSet, while its overall revenue of $27.9 billion fell short of estimates of $28.3 billion. Meta also outperformed user growth expectations for the quarter.
  • Meta's shares rose almost 15% to $201.14 in after-hours trading on Wednesday on the results.
  • Meta CEO Mark Zuckerberg said the company's metaverse arm is on a long-term timeline, currently "laying the groundwork for a very successful 2030s," according to the earnings call.
  • Zuckerberg reiterated that the web version of the company's Horizon Worlds metaverse platform is slated for release this year, to be followed by its augmented and virtual reality versions.

Eli Tan contributed reporting.

UPDATE (April 27, 20:41 UTC): Updated with Meta's overall results and share price action.

UPDATE (April 27, 21:53 UTC): Updated with Mark Zuckerberg's comments on metaverse revenue.

UPDATE (April 27, 22:22 UTC): Updated with Horizon Worlds release information.


Read more about

DISCLOSURE

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

CoinDesk - Unknown

Nelson Wang is CoinDesk's news editor for the East Coast. He holds BTC and ETH above CoinDesk's disclosure threshold of $1,000.

CoinDesk - Unknown

Nelson Wang is CoinDesk's news editor for the East Coast. He holds BTC and ETH above CoinDesk's disclosure threshold of $1,000.

Trending

1
CoinDesk - Unknown
First Mover Asia: Remember ICOs? You Would Have Made a Fortune if You HODLed; Bitcoin Slogs Toward $20K

Investors who purchased a breadbasket of blue chip coin offerings about five years ago would have generated an 819% return, even with the current bear market; most cryptos fell in Tuesday trading.

CoinDesk - Unknown
2
CoinDesk - Unknown
Compass Mining Seen Losing Maine Facility After Failing to Pay Power Bill

The most valuable crypto stories for Tuesday, June 28, 2022.

CoinDesk - Unknown
3
CoinDesk - Unknown
Crypto Jobs: Who’s Cutting and Hiring?

A running reckoning to layoffs and hirings in the cryptocurrency/blockchain industry.

CoinDesk - Unknown
4
CoinDesk - Unknown
Governments May Restrict Foreign Access to Their CBDCs, Riksbank Official Says

Not all countries “play nicely” with each other, complicating how central bank digital currencies will interact with other payment systems, said Cecilia Skingsley, first deputy governor at the Swedish central bank.

CoinDesk - Unknown