Meta has announced financial results for the first quarter of 2022, and despite revenues up 7% from the same period a year earlier, company executives have little to celebrate. the metaverse still a losing machinea phenomenon that could last for several years until the sector “evolves”, if that happens, of course.
Since Mark Zuckerberg changed the name of Facebook to Meta and presented his vision of the metaverse, two fiscal quarters have passed. In the last quarter of 2021, the company’s Reality Labs division recorded losses of more than 10 billion dollars, results that came accompanied by the first loss of Facebook users in almost twenty years, which caused a resounding drop in the 20% bag.
Without the “metaverse”, the quarter would have been better
The outlook for the first quarter of this year is less dramatic than that of 2021, but there are still numbers in the red. The number of Facebook users increased 4% (1.96 billion vs. 1.92 billion in the previous quarter), but the company’s augmented reality business operated with a loss of 2,960 million dollars and profits were located at 7,465 million dollars, 21% less than in the same period of the previous year.
Certainly, the Menlo Park company has other applications, Facebook Messenger, Instagram and WhatsApp, to name a few, but it is determined to promote the metaverse as its future bet, a bet that could perhaps face increasingly severe competition and could re-conquer users seeking new experiences. But for that metaverse dreamed up by Zuckerberg we will have to wait, and the profits too.
“It won’t be until those products actually hit the market and scale significantly, and this market ends up being big, that this is going to be a big revenue or profit contributor to the business,” Meta’s CEO said on the traditional call with what shareholders after the presentation of the financial results. And the waiting time, it seems, will not be short: “this is laying the groundwork for what I hope will be a 2030 very exciting”.
Only time will tell if the strategy adopted by Meta is correct. The truth is that from here to that theoretical future in which the metaverse should take off, the company must continue to promote its other applications, to support itself and finance its other projects. Short-term challenges include maintaining its ad business, hit by privacy changes in iOS, growing Facebook’s user base and dealing with the growing popularity of TikTok, which steals users from Instagram.
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George is Digismak’s reported cum editor with 13 years of experience in Journalism