Mark Zuckerberg may be certain that the future of his company lies in the metaverse, but in the present, it is mostly costing Meta and its shareholders billions of dollars. In the final three months of 2022, the company’s Reality Labs division, i.e. all things metaverse, recorded an operating loss of $4.3 billion, bringing the total for 2022 to an eye-watering $13.7 billion. That’s on top of a $10.2 billion loss in 2021, $6.6 billion in 2020 and $4.5 billion in 2019, bringing the total wager for Zuckerberg’s big bet to $35 billion.

And that won’t be the end of it either. In its third-quarter 2022 earnings release, Meta warned that it expects Reality Labs’ operating losses to “grow significantly” in 2023, after which investments would be paced to “achieve our goal of growing overall company operating income in the long run.” In the short run, the opposite is the case as metaverse investments weigh heavily on the company’s results. In 2022, the company’s operating margin dropped from 40 to 25 percent, as total operating profit declined from $46.8 billion in 2021 to $28.9 billion last year. In fairness, it must be said that much of that decline came from the company’s profitable “Family of Apps” (i.e. Facebook, Messenger, Instagram and WhatsApp), where a broader advertising slowdown and the shift to reels have hurt the top and bottom line. That makes the $13.7 billion operating loss of the Reality Labs division stand out and sting even more, though, as it can’t be glossed over by growth in Meta’s core business.

Discussing the metaverse in a call with investors last year, Zuckerberg defended his long-term vision: “There’s still a long road ahead to build the next computing platform, but we are clearly doing leading work here. This is a massive undertaking and it’s often going to take a few versions of each product before they become mainstream. But I think our work is going to be of historic importance and create the foundation for an entirely new way that we will interact with each other and blend technology into our lives, as well as a foundation for the long term of our business.”

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