Facebook Bets $10 Billion for the Metaverse

Written By:Eddie Avil

#markzuckerberg has pretty much single handedly nudged the #virtualreality industry forward by taking brave financial & strategic bets on #oculus.

From my perspective i do not see a single Virtual Reality OEM that can compete with the #oculusquest , mind you...we have got some great #virtualrealityheadsets but none that can compete with the agressive pricings & marketing done by #facebookrealitylabs.

Over the years since being acquired from #palmerluckey, Oculus has gone through various iterations both hardware plus software & they have carefully tried to steer away from the mistake of their predecessor #googleglass.

I Applaud & acknowledge Mark Zuckerberg & his teams effort but this $10 billion bet might go down the drain if #facebook does not work towards building a #decentralized #metaverse.

Mark Zuckerberg told investors during the company's Q3 earnings call Monday that the company will ramp up investment in the area, and warned that it won't see a return on that investment any time soon.

"I recognize the magnitude of this bet," Zuckerberg said. "This is not an investment that will be profitable for us any time in the near future."

Zuckerberg argued that Facebook had to build out a lot of fundamental technology first before it can rake in any meaningful returns with AR and VR. "Our goal is to help the metaverse reach a billion people," he said, adding that he hoped to reach that goal by the end of the decade. That's when it could also become "a real business story," Zuckerberg said.

"The metaverse will be a successor to the mobile internet," Zuckerberg said. "It will unlock a massively larger creative economy [...] than what exists today."

Facebook disclosed its massive spending on AR/VR hardware and related software and services in its Q3 earnings release: "We expect our investment in Facebook Reality Labs to reduce our overall operating profit in 2021 by approximately $10 billion,"

"We are committed to bringing this long-term vision to life and we expect to increase our investments for the next several years."

Starting with Q4, Facebook will break out Facebook Reality Labs as a separate reporting segment in its quarterly earnings reports.

"As we have discussed, we are dedicating significant resources toward our augmented and virtual reality products and services, which are an important part of our work to develop the next generation of online social experiences," the company wrote.

Altogether, Facebook generated $29 billion in revenue in Q3, compared to $21.5 billion during the same quarter last year. Earnings per share came in at $3.22, compared to $2.40 in Q3 of 2020. Analysts had expected earnings of $3.17 per share.