Meta’s AR/VR Costs Continue To Grow Faster Than Revenue

Meta’s Actuality Labs income grew 35% year-on-year in Q1 2022, however prices grew 55%.

Meta's AR/VR Prices Proceed To Develop Quicker Than Income 9

Actuality Labs is the division of Meta liable for Quest VR & software program, Portal video calling home equipment, and the Ray-Ban Tales digital camera glasses – in addition to researching and growing AR glasses and different future AR and VR gadgets.

The division introduced in $695 million income in Q1 2022, up from $534 in Q1 2021. However the price of this division was a whopping $three.6 billion, up from $2.36 billion in Q1 2021. The result’s a lack of $2.96 billion, up from a lack of $1.83 billion in Q1 2021.

Meta’s CFO mentioned the income development was “pushed by gross sales of Quest 2”. Plotting a trendline, it’s clear that whereas prices are rising considerably, income is slowly rising too:

Meta's AR/VR Prices Proceed To Develop Quicker Than Income 10

This improve in prices isn’t surprising nevertheless – Mark Zuckerberg warned buyers in October that investments in AR & VR would cut back Meta’s total 2021 revenue by $10 billion, and mentioned “I count on this funding to develop even additional for every of the subsequent a number of years”. Zuckerberg has described the metaverse as “nonetheless a great distance out”, and is signaling to buyers he intends to spend tens of billions of dollars “to construct it”.

Zuckerberg right this moment informed buyers he’s ready to commerce off quick time period earnings for the long run alternatives AR and VR current. This might become the biggest guess within the historical past of the tech business – however will it work?

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