Facebook plans $19.2b metaverse investment next year

Meta (Facebook) Platforms will stay the course in 2023 with investment in its metaverse division Reality Labs expected to account to 20 per cent of its overall expenses.

Reality Labs Chief Technical Officer, Andrew Bosworth, disclosed in a blog post yesterday that the company planned to spend about as much on the metaverse division next year as it did this year, despite a reported loss of $9.4 billion through the first nine months of 2022.

Metaverse is defined as a spatial computing platform that provides digital experiences as an alternative to or a replica of the real world, along with key civilisational aspects like social interactions, currency, trade, economy, and property ownership – founded on a bedrock of blockchain technology.

In a research note, Radio Free Mobile’s Dr. Richard Windsor said he recently estimated Meta’s expenses in 2023 would be around $97.3 billion, meaning that spending on the Metaverse is expected to be $19.2 billion.
“This is a vast amount of money to spend on a technology that might take off at the end of the decade leading me to think that this is also an insurance policy,” wrote Windsor. He added the move is “almost certain to hit earnings hard in 2023.”
  
According to MobileWorldLive, the Reality Labs unit posted losses of $3.7 billion in Q3, up $1.1 billion year-on-year, as the company invested 18 per cent in the metaverse division in that quarter.
“Economic challenges across the world, combined with pressures on Meta’s core business, created a perfect storm of scepticism about the investments we’re making,” Bosworth stated.

About 80 per cent of the company’s investments will go towards Meta’s “family apps” which include Facebook, Instagram, WhatsApp and Messenger. Those apps accounted for roughly $32 billion in profit during that same period.

Meta founder, Mark Zuckerberg, announced in 2021 that Facebook had changed its corporate name to Meta Platforms. But a large number of shareholders stated this year they’ve lost faith in that decision to focus resources on metaverse products and services.

He announced in November that the company would cut around 13 per cent of its global workforce, which amounted to more than 11,000 jobs.