Meta's Metaverse Dive Yields Losses Surpassing Industry Titans

by Nik Asti

Published: October 27, 2023 at 7:56 am Updated: October 27, 2023 at 7:57 am

by Victor Dey

Edited and fact-checked:

In Brief

Mark Zuckerberg’s Meta’s nearly $50 billion metaverse loss exceeds the market values of Ford, Hershey, and Kraft Heinz.

Meta's Metaverse Dive Yields Losses Surpassing Industry Titans

Mark Zuckerberg’s venture into the metaverse through his company, Meta, has seen staggering losses amounting to nearly $50 billion within just five years. To put this in perspective, this sum surpasses the market value of several prominent corporations.

Meta’s losses related to its metaverse ventures have reached a cumulative $47 billion since the beginning of 2019, according to an analysis of regulatory filings. When broken down year-by-year, these losses showcase a concerning trend for the company: under $5 billion in 2019, over $10 billion in 2021, close to $14 billion in 2022, and more than $11 billion in the first three-quarters of the present year.

However, Zuckerberg and his leadership team don’t seem to be deterred. In Meta’s Q3 earnings, they indicated that they anticipate this trend to persist. The investments in Reality Labs, or RL, largely cater to innovative research and development intended for metaverse products that might only see their full potential realized in the forthcoming decade.

When comparing these losses to the market capitalization of well-known corporations, their magnitude becomes clearer. The $47 billion loss exceeds the market cap of giants such as Ford, Keurig Dr. Pepper, Hershey, and Kraft Heinz. Moreover, this figure is encroaching upon the valuation of companies like Lululemon, Chipotle, Target, and Monster Beverage.

In the world of the ultra-wealthy, if this $47 billion were the net worth of an individual, they would rank among the top 25 on the Bloomberg Billionaires Index. Such a fortune would surpass that of notable names like Phil Knight of Nike, Nvidia’s Jensen Huang, and Citadel’s Ken Griffin.

A Look at the Bigger Picture

Despite these massive losses, it’s essential to remember that Meta’s metaverse venture is but a fraction of its overall operations. The primary divisions of the company, encompassing Facebook, Instagram, and WhatsApp, amassed a revenue of $94 billion and an operating profit of $42 billion in just the first nine months leading up to September. In contrast, the RL division brought in under $1 billion in revenue but incurred a loss of $11.5 billion.

Ever since Meta’s acquisition of VR front-runner Oculus in 2014, Zuckerberg has been a vocal proponent of virtual and augmented reality. He envisioned a world where experiences, whether it’s enjoying an NBA game or attending a Harvard lecture, become immersive and accessible to all.

It remains to be seen if Zuckerberg’s metaverse vision will translate into a profitable venture for Meta. The mounting losses in this realm are indeed significant and seem poised to grow in the coming years.

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Nik is an accomplished analyst and writer at Metaverse Post, specializing in delivering cutting-edge insights into the fast-paced world of technology, with a particular emphasis on AI/ML, XR, VR, on-chain analytics, and blockchain development. His articles engage and inform a diverse audience, helping them stay ahead of the technological curve. Possessing a Master’s degree in Economics and Management, Nik has a solid grasp of the nuances of the business world and its intersection with emergent technologies.

Nik Asti