Meta has released its quarterly financial results, giving insight into its recent decision to increase the price of its Meta Quest 2 headset.
Reality Labs, the division of Meta which works on its virtual reality and metaverse products, posted a net $2.8bn loss over the last three months.
Revenue during this period saw a 48 percent increase to $452m, which CFO Dave Wehner attributed to sales of Meta Quest 2 during Meta’s earnings call with investors, but this was heavily outweighed by the costs and investments Meta is putting into Reality Labs.
In the earnings call, the newly announced price hike of Meta Quest 2 units was seemingly confirmed to have been put in action in an attempt to mitigate losses of Reality Labs by Wehner.
“Cost of revenue decreased 4 percent, as growth in core infrastructure investments and content-related costs were more than offset by a reduction in Reality Labs loss reserves as a result of the announced price increase of Quest 2.”
Wehner informed investors that Meta expects Reality Labs to make an even bigger loss over the next three months due to plans to increase investment in virtual reality and the metaverse.
In Meta’s follow-up call with investors, Wehner repeatedly reiterated Meta’s dedication to Reality Labs.
“This is obviously an area that is on our priority list. And so, we do plan on continuing to invest in Reality Labs… And in terms of our expense growth from 2021 to 2022, the bulk -the largest component of the expense growth is Family of Apps, but we do think that Reality Labs will continue to be an investment area for us.”
Meta previously cited rising production and shipping costs as the factor behind the £100 / $100 price increase for Quest 2 but it sounds like this will do little to offset the losses predicted as the company continues to invest in the metaverse.