Mark Zuckerberg admits he lost $3 BILLION building a metaverse as Facebook races for virtual world dominance

MARK Zuckerberg’s quest to crown himself king of the metaverse is costing his company mouth-watering cash.

Meta, the company formerly known as Facebook, announced yesterday that its Metaverse division has already cost it $3 billion this year.

1

Corresponding Silicon RepublicThe company’s first-quarter earnings report recorded the loss in Facebook Reality Labs (FRL).

This is the arm of the company that handles its augmented and virtual reality operations, including its work on the Metaverse.

The Metaverse is a loosely defined virtual realm composed of connected 3D virtual worlds in which people can work, play, or conduct business.

Visitors to the social spaces can interact with each other and purchase goods and services as they would in the real world.

The technology accessed through a virtual reality headset is still in its infancy and Meta is betting heavily on it.

The company changed its name to Meta last year to reflect its focus on the metaverse and vowed to spend $10 billion on it in 2021 alone.

In its first quarterly report for 2022, Meta said Reality Labs had revenue of $695 million but lost $2.96 billion.

Doubts have been raised as to whether the big Metaverse investments will pay off for Meta, which changed its name from Facebook last year to reflect its shifting focus.

Meta’s early metaverse platform called Horizon Worlds already allows people to connect virtually while being represented by avatars.

“From a financial perspective, our goal over the next few years is to achieve sufficient operating income growth from our family of apps to fund the growth of our Reality Labs investment while increasing our overall profitability,” said Zuckerberg.

“Well, unfortunately, given the revenue headwinds, that won’t happen in 2022.”

Meta on Wednesday reported better-than-expected earnings for the quarter, reassuring investors worried about the toll it would take on competition from TikTok and easing pandemic restrictions.

The company said it had made $7.5 billion in profit on sales of $27.9 billion for the first three months of this year.

After the report was released, shares rose more than 18 percent in after-hours trading.

“We made progress on a number of key company priorities this quarter and remain confident that our product roadmap will unlock long-term opportunity and growth,” said Meta CEO Zuckerberg.

The average number of people using Facebook monthly rose 3 percent to 2.94 billion by the end of March.

About 3.64 billion people use at least one member of the meta-app family every month, the tech giant reported.

Meta owns Facebook, Messenger, WhatsApp, Instagram and virtual reality company Oculus.

“Today, more people are using our services than ever before, and I’m proud of how our products are serving people around the world,” said Zuckerberg.

The increase in the number of Facebook users on any given day bodes well for the social network, especially after the number fell for the first time in the last quarter of last year, Insider Intelligence analyst Evelyn Mitchell told AFP.

“But it’s also clear that Facebook is still struggling to attract new users and Instagram is finding it increasingly difficult to catch up,” Mitchell said.

• Read the latest phone and gadget news
• Stay up to date on Apple stories
• Get the latest on Facebook, WhatsApp and Instagram

We pay for your stories! Do you have a story for The Sun Online Tech & Science Team? Email us at tech@the-sun.co.uk