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Meta Profits Down 52%, Takes $5.6 Billion Metaverse Hit

Meta continues to see declining revenue and profits as it sinks money into its metaverse aspirations.

Facebook’s parent company saw A$42.67 billion in revenue during the September quarter, a 4 per cent decrease year-on-year.

It reported A$6.76 billion net income, a decrease of 52 per cent year-on-year, and a 34 per cent drop from the previous June quarter.

 

The major earner for Meta, its advertising operations, which brought in A$41.94 billion during the quarter, saw a 3.6 per cent revenue drop from September last year, as Apple’s new tracking controls continue to upend the digital advertising space.

Meta’s Reality Labs, its pie-in-the-sky VR and AR division, copped a mighty A$5.65 billion loss, with these losses expected to escalate even further.

“We do anticipate that Reality Labs operating losses in 2023 will grow significantly year-over-year,” CFO David Wehner said.

“Beyond 2023, we expect to pace Reality Labs investments such that we can achieve our goal of growing overall company operating income in the long run.”

Facebook, the social media platform that once drove the company’s fortunes, is continuing to add users, with an average of 1.98 billion for September, up 3 per cent from last September.

Zuckerberg was defensive when asked during an investor call today whether his forays into the metaverse have lived up to his expectations.

“I know sometimes when we ship products, there’s a meme where people say, ‘You’re spending all this money and you produce this thing,’” Zuckerberg said.

“I think that’s not really the right way to think about it. I think there’s a number of different products and platforms that we’re building, where we think we’re doing leading work that will become… launching consumer products and then eventually mature products at different cadences, different periods of time over the next five to 10 years.”

“Obviously it has a long way to go before it’s going to be what we aspire for it to be,” Zuckerberg said about his Horizon Worlds metaverse.

“We think we’re doing some leading work there, but obviously we need to get that into the product and continue innovating on that.

“A lot of people might disagree with this investment, but from what I can tell, I think that this is going to be a very important thing, and I think it would be a mistake for us to not focus on any of these areas, which I think are going to be fundamentally important to the future.”

 



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