Meta's rebranding from Facebook, Inc. last year was a bold move from the social media giant shifting its focus towards the "metaverse." While Facebook remained operating under the same name, the company rebranded its line of VR headsets to Meta Quest, formerly known as Oculus. The metaverse initiative has not been without criticism from other members of the industry as Apple previously railed against Facebook for its commission fees for creators on Meta. Now, a recent financial report shows Meta's continued woes with its new company direction.
Alongside one of the largest social media platforms in Facebook, Meta also boasts one of the gaming industry's most successful virtual reality devices. The Meta Quest and Meta Quest 2 have become popular VR headsets, with Steam integration alongside Meta's app store. However, a recent announcement from Meta revealed the price of Meta headsets would be hiked by $100 later this year. Now, Meta's second quarter financial report shows the company is struggling with its vision for the metaverse.
Alongside VR division Reality Labs' reported nearly $3 billion loss throughout the first quarter of 2022, the second quarter appears to have shown similar results. The VR branch of Meta reportedly lost $2.8 billion throughout Q2 of 2022, down only slightly from its losses in the year's first quarter. Despite the clear losses throughout the second quarter, Meta continues to boast 1.97 billion daily active users across its various apps, a 3% increase from last year, with over 3 billion users monthly.
Meta CEO Mark Zuckerberg remained positive about the trajectory of the company going into the future in spite of the early losses in 2022. Zuckerberg continues to believe in the metaverse's potential as a "deeper social experience" with his vision for the platform seeing potentially trillions of dollars for the company. However, despite Zuckerberg's optimism, Meta's forecast projects Reality Labs' revenue to drop in the third quarter, likely aided by the increased price of the Meta Quest 2. Zuckerberg also alluded to potential layoffs, suggesting there were likely several employees "who shouldn't be here."
Meta's struggles to see success with its metaverse initiative come as virtual reality becomes increasingly popular in recent years. Major competitors like Sony have embraced VR gaming with its original PS VR headset and the PS5's PS VR2 set to arrive in the near future. Valve has also given Meta competition in the PC virtual reality space with the Valve Index released in 2019 alongside the highly-anticipated Half-Life: Alyx. Meta will likely continue to face a rocky road ahead as the social media and VR company pursues its vision of the metaverse.
Source: VentureBeat