Meta’s metaverse not profitable yet, Reality Labs loses $2.8 Billion in Q2


  • The Reality Labs Unit is losing significant money, as reported by Meta.
  • Prediction for Q3 2022 is also unfavorable.
  • Meta could lay off its employees in the coming year.

Meta is facing a tough time in turning its latest focus into a profitable deal. Based on the latest earnings call, which covers the economic performance during Q2, the company has announced that the Reality Labs unit has suffered a loss of more than $2.8 billion dollars. Now that’s surprising because the company has registered sales of $400 million plus. 

Reality Labs looks after the metaverse strategy of Meta, which also includes VR and AR reality products development as well as research. 

Talking about the monetization of the company’s metaverse initiatives, it is being developed along with Horizon Worlds, the flagship VR app that allows monetization for users and benefits the company with an earning of 50% per sale. 

As far as the Q3 2022 outlook is concerned, even that’s on the negative side. According to the company, the reason behind this is the weak advertising demand environment faced in the second quarter, which is in turn driven by macroeconomic unpredictability.

Meta’s CEO, Mark Zuckerberg has indicated chances of layoffs in the coming year. Reason given by him is that the current period is a call for increased intensity and he looks forward to more productivity with less resources. 

An increase by 32% in the work force since the previous year has been reported by the company, thus, reaching the headcount to 83,553.

This month only, Zuckerberg discussed slowing down the hiring strategy and focus on increasing performance standards for the current employees. 

Going further, the company has estimated Reality Labs will lose more money in the coming quarter. However, Zuckerberg believes the metaverse to scale with time with billions of users carrying out transactions in the metaverse and all these transactions being monetized by the company itself.