Meta CEO, Mark Zuckerberg insists that the loss-heavy division could still turn around to be profitable.
FTC stops Meta from its planned acquisition.
Meta’s metaverse division (Facebook Reality Labs, FRL) took another hit this past quarter. An official statement by the social media firm states that FRL recorded a $2.81 billion loss in Q2 2022. That loss means that the division has posted a total of $5.77 billion loss in its year-to-date balance.
The focus of Meta’s FRL is on various aspects related to Meta’s aim to expand into the metaverse world. Such aspects include hardware and software development and content related to the metaverse. However, Meta clarifies that FRL is different from its other divisions (Messenger, Facebook, Instagram, and WhatsApp.)
FRL’s Q2 2022 report shows a revenue of $452 million which is 35 percent less than its revenue from the previous quarter. Meta CEO, Mark Zuckerberg, admitted that the FRL’s loss is hugely expensive. But he is optimistic that the company’s long-term profitability, especially as the metaverse is central to our daily lives.
Zuckerberg added that FRL will play a key role in building experiences that are best for the industry and not be restrained by competition’s demands. Meta’s overall revenue was $28.8 billion. Thus, indicating a rise of a little more than 3 percent this quarter. Despite this slight increase in revenue, Meta’s share price dropped by 4 percent in after-hours trading following the release of the earnings report. It currently trades at $169.58.
FTC sues Meta over planned acquisition
Meanwhile, the US Federal Trade Commission (FTC) today sued Meta to stop its proposed acquisition of VR app maker, Within. Within is the VR game developer of the supernatural app, a popular fitness app. Meta has made several acquisitions in recent times to expand its dominance into the metaverse space.
FTC’s actions stem from the belief that Meta is making huge moves to have complete control of the metaverse space. The filing alleges that Meta’s new purchase will make it one step closer to achieving its ultimate objective of owning the whole metaverse. It is worth noting that Meta has been planning this purchase since October 2021. Information from sources close to the matter says the deal is worth over $400 million.
Recall that Meta also acquired ownership rights to Oculus’s popular headset, Oculus Quest 2, and has rebranded it as the Quest 2 headset. The Facebook parent company has said it would extend the closing date of the Within deal to august 1 to reach an understanding with the FTC.
According to the agency’s announcement, Meta’s purchase attempt is to suppress the competition in the VR fitness sector instead of building its own VR fitness product. The agency further wrote that the purchase violates antitrust laws since it stifles innovation and industry competition.
The FTC remarked that Meta has purchased another company Within the same niche (beat games). Beat Games is the developer behind the famous VR game beat, Saber, which also serves as a fitness app for some people.
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