Facebook owner Meta to lift veil off its metaverse business
Since October, Facebook has renamed the company, articulated a vision of the internet where people can digitally connect through virtual-reality avatars or teleport to see places like ancient Rome, and helped trigger the metaverse investment craze.
When the company, now Meta Platforms Inc, reports fourth-quarter results on Wednesday, investors will get a new window into the financial impact of CEO Mark Zuckerberg’s current passion.
Meta plans to break out the results of its augmented and virtual-reality hardware unit, Reality Labs, for the first time, an investment the company previously warned would cause a $10 billion hit to 2021 profit and would not be profitable “any time in the near future.”
The company is hiring engineers and buying up multiple virtual reality gaming studios to build toward the metaverse, which is a broad futuristic idea of shared virtual realms that can be accessed via different devices and which Zuckerberg is betting will be the successor to the mobile internet.
Analysts said they would be keen to see indicators about the Reality Labs division’s profitability, how long it might be a drag on the advertising side, and evidence around the strength of VR headset sales.
“It’s going to be huge for me as an analyst, not having to surgically dig through Facebook earnings … and just see a lens into the Reality Labs,” said VR market analyst Stephanie Llamas of VoxPop.
Meta has said it expects non-advertising revenue to be down year-over-year in the fourth quarter as it compares unfavorably with the “strong launch” of its VR Quest 2 headsets during the previous year’s holiday shopping season.