While more than $15 billion has been invested by Meta since the beginning of last year in its metaverse initiative, the precise whereabouts of this capital are unknown.
Since the beginning of this year, Meta has invested more than $15 billion in its Meta Reality Labs endeavor. However, the company has not disclosed exactly how the money is being spent.
There is growing concern among some industry professionals that the corporation is throwing good money after bad.
Dan Ives, a tech analyst at Wedbush Securities, stated that the problem is, that they spend the money, but the openness with investors has been a nightmare.
“For now, they’re betting money on the future while they continue to have massive headwinds in their core business. “This continues to be a risky bet by Zuckerberg and the team because, for the time being, they’re betting money on the future while they continue to have massive headwinds in their core business,” he added.
The previous year, when Meta started disclosing financial statistics for Reality Labs, the business stated that it had already invested more than $10 billion into the initiative, and there was no sign of an end to the company’s losses appearing in the near future. The corporation has recorded a loss of more than $5 billion for the first six months of 2022, and some analysts anticipate that the total losses for this year will exceed those of the previous year.
While a Meta representative has declined to comment, they did say that the company does not release separate financial information for its Reality Labs division.
Ives is concerned about how much money Meta has poured into its metaverse project so far, especially in light of the “underwhelming” improvements the company has offered this week, such as a new $1,500 headgear and a version of avatars with legs.
Mark Zgutowicz, an analyst at Benchmark, speculates that the enormous costs associated with creating a brand new universe account for at least 60% of Reality Labs’ losses, though he cannot be certain of this.
“There is no actual metaverse, at least from a scaling aspect,” he stated. Here is the metaverse explained.
But did Zgutowicz point out, that Meta has good reasons to try to construct everything on its own.
According to Tigress Financial Partners’ tech analyst, Ivan Feinseth, the future is bright thanks to Mark Zuckerberg’s vision and the potential of the metaverse.