Meta Metaverse Unit Has Lost $5.7B This Year

Meta CEO Mark Zuckerberg said its metaverse ambitions represent a “very expensive undertaking,” but he sees trillions in unlocked value


Facebook CEO Mark Zuckerberg | Source: Shutterstock


key takeaways

  • Meta’s overall quarterly revenue fell for the first time to $28.8 billion, missing estimates of $28.9 billion
  • Reality Labs, the social media giant’s metaverse division, saw second-quarter sales sink 35% to $452 million

Meta and its CEO Mark Zuckerberg might be bullish on the metaverse, but their pivot into virtual reality has so far weighed heavily on its balance sheet.

Meta reported a second-quarter loss of $2.8 billion in its Reality Labs division on Wednesday, adding to a $2.9 billion loss in this year’s first quarter.

Indeed, Reality Labs has lost $5.7 billion for Meta this year. And last year, it posted an annual loss of $10.2 billion, bringing combined losses to almost $16 billion.

The division, which is in charge of producing metaverse-related technology such as virtual reality (VR) hardware and software, posted quarterly sales of $452 million. That’s a nearly 35% drop from the second quarter.

Facebook changed its name to Meta in October last year to capitalize on the anticipated metaverse trend. Zuckerberg remains positive about the long-term outlook.

In the company’s earnings call Wednesday, he said artificial intelligence is the key driver of Meta’s business moving forward, followed by the emergence of the metaverse. According to him, the segment is still a solid opportunity as it enables “deeper” social experiences irrespective of where people are and expects the sector to unlock “trillions of dollars” over time. 

“This is obviously a very expensive undertaking over the next several years,” Zuckerberg said. “But as the metaverse becomes more important in every part of how we live from our social platforms and entertainment to work and education and commerce, I’m confident that we’re going to be glad that we played an important role in building this.”

Meta revenues disappoint but daily active users beat expectations

Meta’s total revenue for the quarter dropped 1% to $28.8 billion, missing expectations of $28.9 billion. 

This was reportedly its first-ever quarterly revenue decline in the 18 years since the tech titan’s inception. The company cited recessionary fears and competition weighing on its digital ad sales as reasons why.

After disclosing second quarter results, Meta’s stock fell 4.6% in after-hours trading to $161.70 a share on Wednesday, and shed another 1% in pre-market trading Thursday. Its stock is down 52% in the year-to-date, per TradingView data.

Meta expects third-quarter revenue from its Reality Labs segment to be even lower than the second quarter.

The Menlo Park firm projected overall revenue for the third quarter to be between $26 billion and $28.5 billion, lower than expectations of $30.32 billion. Meta’s daily active users, however, came in at 1.97 billion, beating estimates of 1.95 billion.

Slumping revenue isn’t the only problem Meta is dealing with. On Wednesday, the Federal Trade Commission sued to block the Facebook parent from acquiring VR company Within, accusing it of illegally attempting to “conquer” the virtual reality and metaverse industries. 

Learn more: Can GameFi Still Unlock the Metaverse?

Don’t miss the next big story – join our free daily newsletter.


Upcoming Events

Hilton Metropole | 225 Edgware Rd, London

Mon - Wed, March 18 - 20, 2024

Crypto’s premier institutional conference returns to London in March 2024. The DAS: London Experience: Attend expert-led panel discussions and fireside chats Hear the latest developments regarding the crypto and digital asset regulatory environment directly from policymakers and experts.

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Top Icon.png


Osmosis thrived in H2 2023 on the back of increased DeFi activity deriving from recently launched Cosmos-related projects and better market conditions. With new value accrual mechanisms for the native token, Osmosis is well-positioned to continue its strong performance in 2024.



Though the opposing flow trend is likely to slow over time, industry watchers note, bitcoin fund assets could one day eclipse the $90 billion gold ETF space


Celestia had the first mover advantage. EigenDA has staked ether. What sets Avail apart?


Bitcoin moved 1% higher Monday morning in New York, Matrixport analysts say $62,000 could happen next month


It’s hard to believe right now that crypto — even with all of its flexibility and massive capabilities — could ever be like cash on the internet


Michael Saylor announced Monday morning that MicroStrategy bought 3k more bitcoin after the X account was compromised over the weekend


Plus, Pudgy Penguins grows its brand and a group of Autoglyphs sell for $14.5 million