Meta Platforms Inc (NASDAQ:FB), previously known as Facebook, released its fourth quarter and full year results, and for the first time, reported its Metaverse business separate from its ‘Family of Apps’ business, which includes Facebook and Instagram.
Reality Labs, which was previously Oculus before Facebook bought the start-up in 2014 for a reported fee just above US$2bn, is the branch of the business focused on the development of Meta’s augmented and virtual reality (VR) space.
Revenue in the year end for Reality Labs, which generates most of its money by selling its Oculus VR headsets, was roughly US$2.3bn.
Russ Mould, an investment director at AJ Bell added that the company is looking to develop revenue streams into Reality Labs, but with that branch of the business bringing in less than 2% of the group’s earnings so far, “a return on that investment is some way off.”
Costs, on the other hand, far outweighed earnings for its metaverse arm, with outgoings roughly US$10bn for the year.
Zuckerberg had warned investors when the takeover of Oculus was confirmed that it would cost US$10bn annually as the company invests in research and development to build and expand its own platform.
Meta say its metaverse will be a 3D space where users can socialise, learn, collaborate, and play, with virtual reality headsets transporting users into another world.
The company has recent history of having to dump projects, with it recently selling its crypto and blockchain infrastructure branch Diem for US$200mln.
Shares crashed by 25%, largely on the the news that Meta's user numbers declined for the first time in 18 years.