Marring Meta’s first quarterly results for 2022– which saw the company steer its first ever loss in DAU (19.2 billion) back with a four per cent increase to 1.96 billion – was the news that Reality Labs, the firm’s metaverse division, operated at a loss of $2.96 billion.
This loss is in stark contrast to the modest $695 million revenue generated by the division – an increase from $534 million in Q1 20221.
As reported by TechCrunch, Meta CEO Mark Zuckerberg stated: “It’s not going to be until those products really hit the market and scale in a meaningful way, and this market ends up being big, that this will be a big revenue or profit contributor to the business.
“This is laying the groundwork on what I expect to be a very exciting 2030.”
However, others in the games industry were unimpressed with Meta’s confidence in its continued losses. Rami Ismail noted on Twitter:
3 billion wasted on this
You could fund over 10,000 medium-size indie games with thishttps://t.co/sTrRw45LZC
— Rami Ismail (رامي) (@tha_rami) April 29, 2022
The ad look
However, Meta has seen strong growth in ad impressions, with the report noting that across Q1 2022, “ad impressions delivered across our Family of Apps [Facebook, Instagram, WhatsApp, Messenger] increased by 15 per cent year-over-year and the average price per ad decreased by eight per cent year-over-year”.
Advertising revenue increased six per cent to $26.9 billion, up from $25.4 billion in Q1 2021.
However, in total, Meta’s Q1 2022 net income reached $7.46 billion – a 21 per cent decrease from Q1 2021’s $9.49 billion.
Despite the loss, Meta is extremely bullish about the role of the metaverse. Our own Steve Takle broke down April’s Quest Gaming Showcase with a chat with Resident Evil 4 VR’s Tom Ivey, a comprehensive look at every game announcement, and thoughts from Meta’s Jason Rubin on why VR won’t be replacing mobile gaming.