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Meta’s Reality Labs Division Incurring $40 Billion Dollar Losses

Since its rebranding from Facebook to Meta in September 2021, Mark Zuckerberg’s commitment to the Metaverse has been clear. Three years later, on the eve of the first quarter earnings announcement scheduled for April 24, the financial impact of this expansion into virtual reality (VR) and augmented reality (AR) on Meta’s finances is impressive: Meta’s Reality Labs division has just surpassed $40 billion in losses.

We had a good quarter, with our community and business continuing to grow. We made a lot of progress in advancing AI and the Metaverse.

Mark Zuckerberg, CEO and Founder of Meta

The Metaverse division of Meta in losses

Despite an overall positive balance sheet for Meta, with annual revenue of $134.9 billion in 2023, up nearly 16% from 2022, and a record quarterly revenue of $40.1 billion in the fourth quarter, surpassing analyst predictions, Meta’s Reality Labs division is struggling to find profitability.

In fact, this branch dedicated to research and development of products such as the VR Quest headset line has accumulated successive operational losses of approximately $40 billion since 2021.

Comparison of Meta’s sales and actions

In terms of hardware sales, Meta has sold approximately 20 million Quest headsets since 2019, which pales in comparison to Apple’s iPhone sales or Sony’s PlayStation 5 consoles over similar periods.

However, this situation does not seem to affect the confidence of investors and shareholders in the company’s strategy. Meta has repurchased $92 billion of its own shares since 2021 and had a budget of $31 billion for future acquisitions at the end of 2023, with an additional $50 billion earmarked for new buybacks in February.

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