Facebook’s Meta will devote 20% of costs to metaverse next year

FACEBOOK parent company Meta Platforms will continue to devote about 20 per cent of its overall costs and expenses to Reality Labs in 2023, despite questions about the business division focused on augmented and virtual reality and the so-called metaverse.

The projection, given by CTO Andrew Bosworth in a blog post on Monday (Dec 19), is little changed from the 18 per cent of spending Meta devoted to Reality Labs in the third quarter. That means the bulk of the company’s investments will continue to go towards what Meta calls its “family of apps” – Facebook, Instagram, WhatsApp, and Messenger.

Meta stock is down nearly 65 per cent this year, and some have questioned Meta CEO Mark Zuckerberg’s expensive bet on the metaverse which comes as the company has cut other costs, including widespread layoffs.

Reality Labs reported a loss from operations of US$9.4 billion through the first nine months of the year; Meta’s family of apps, by comparison, brought in roughly US$32 billion in profit during that same period.

Bosworth said 2022 had been harder than expected.

“Economic challenges across the world, combined with pressures on Meta’s core business, created a perfect storm of scepticism about the investments we’re making,” he said. Still, he added, pulling back on future bets to focus on short-term goals alone can have “disastrous consequences.”

A 20 per cent investment in futuristic technologies is a “level of investment we believe makes sense for a company committed to staying at the leading edge of one of the most competitive and innovative industries on Earth,” he said. BLOOMBERG