Marring Meta’s first quarterly results for 2022 – which saw the company steer its first ever loss in DAU (19.2 billion) back with a four per cent increase to 1.96 billion – was the news that Reality Labs, the firm’s metaverse division, operated at a loss of $2.96 billion.
This loss is in stark contrast to the modest $695 million revenue generated by the division – an increase from $534 million in Q1 20221.
As reported by TechCrunch, Meta CEO Mark Zuckerberg stated: “It’s not going to be until those products really hit the market and scale in a meaningful way, and this market ends up being big, that this will be a big revenue or profit contributor to the business.
“This is laying the groundwork on what I expect to be a very exciting 2030.”
However, others in the games industry were unimpressed with Meta's confidence in its continued losses. Rami Ismail noted on Twitter:
3 billion wasted on this— Rami Ismail (رامي) (@tha_rami) April 29, 2022
You could fund over 10,000 medium-size indie games with thishttps://t.co/sTrRw45LZC
The ad look
However, Meta has seen strong growth in ad impressions, with the report noting that across Q1 2022, “ad impressions delivered across our Family of Apps [Facebook, Instagram, WhatsApp, Messenger] increased by 15 per cent year-over-year and the average price per ad decreased by eight per cent year-over-year”.
Advertising revenue increased six per cent to $26.9 billion, up from $25.4 billion in Q1 2021.
However, in total, Meta’s Q1 2022 net income reached $7.46 billion – a 21 per cent decrease from Q1 2021’s $9.49 billion.
Despite the loss, Meta is extremely bullish about the role of the metaverse. Our own Steve Takle broke down April’s Quest Gaming Showcase with a chat with Resident Evil 4 VR’s Tom Ivey, a comprehensive look at every game announcement, and thoughts from Meta’s Jason Rubin on why VR won’t be replacing mobile gaming.