• Meta said it faces “headwinds from both increased competition for people’s time and a shift of engagement”
  • Zuckerberg said the company would release a “high-end” virtual reality headset by the end of the year

In an earnings call that underwhelmed Wall Street expectations, Facebook parent Meta disclosed a loss of more than $10 billion from the company’s first forays into the metaverse.

The spending, via Meta’s recently formed Reality Labs Division, contributed to a quarterly profit dip of 8%, according to the company’s accounting. The social media giant warned investors of future “headwinds from both increased competition for people’s time and a shift of engagement.”

Of Meta’s Web3 endeavors, CEO Mark Zuckerberg said the company’s “path ahead is not perfectly defined,” adding that he’s “confident” in the unprecedented investment in the nascent space.

The mounting costs, however, may just be getting started, considering analysts project the social media giant to spend at least $60 billion to carry out its full metaverse vision. 

In the company’s first earnings report since rebranding from Facebook to Meta, Zuckerberg also said the company is planning to release a “high-end” virtual reality headset by year-end.

Meta reported revenue of $2.3 billion from Reality Labs in 2021. Daily active users — a key growth metric for social media companies — fell in line with analyst expectations of 1.95 billion, blocking in at 1.93 billion.

Zuckerberg previously said the company’s spend in the space would focus on virtual and augmented reality efforts.

Facebook and Instagram have additionally both recently been linked to integrations of non-fungible tokens (NFTs).

Two sources familiar with the matter told the Financial Times that Meta has considered launching an NFT marketplace, as well as allowing users to showcase NFTs on their profiles.

The company’s stock plunged more than 20% after hours to about $249 per share. It is down roughly 4% year-to-date.

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  • Morgan Chittum is a New York-based reporter covering NFTs, the metaverse, play-to-earn gaming and other emerging Web3 tech for Blockworks. Previously she was a street reporter, covering crime at New York Daily News, and a media and journalism fellow at the Poynter Institute. Contact Morgan via email at [email protected]