Meta* Platforms has spent more than $15 billion since the beginning of last year on its division. Reality Labs, which deals with virtual reality and in particular creation of the metaverse. However, the company does not disclose data on what exactly such significant investments are spent on. Experts believe that lack of transparency in investor relations might hurt Mark Zuckerberg’s company in the future.
Image Source: Meta*
“The problem is that they were spending money, but the transparency in relations with investors was disastrous. This is still a risky bet for Zuckerberg and the team, because at the moment they are betting on the future, while their core business continues to experience serious difficulties.— the analyst of Wedbush Securities Dan Ives (Dan Ives) considers.
When last year Meta* released financial information regarding Reality Labs for the first time, it was said that the company has invested more than $10 billion in the development of the metaverse. To date, Zuckerberg’s company has reported more than $5 billion in losses in the first six months of 2022, and some analysts believe that at the end of the year, volume company’s losses will exceed last year’s figure.
Meta Officials* declined to comment on this issue, noting that the company does not disclose financial details related to the development of the Reality Labs division. According to Ives, the amount of money Meta* spending on the metaverse is worrisome, especially given the company’s new releases earlier this month, including a cutting-edge VR headset Quest Pro for $1500 and a digital version avatars for the metaverse with legs.
Benchmark analyst Mark Zgutowicz suggests that at least 60% of Reality Labs’ losses are due to the massive R&D costs required to create an entirely new virtual world. “There won’t be a true metaverse, at least in terms of scaling, until we can all wear headsets that don’t make us look like aliens.”– says Zgutovich.
According to the analyst, Meta* there are legitimate reasons for trying to do it yourself rather than buying other companies. “It’s hard for them to go into the market and acquire other unique software companies because they’re so regulatory bound that they have to stay where they are and build something organic. Where transparency might be better is how and when they expect to get a return on this investment.”Zgutovich said.
* It is included in the list of public associations and religious organizations in respect of which the court has made a decision that has entered into legal force to liquidate or ban activities on the grounds provided for by Federal Law No. 114-FZ of July 25, 2002 “On countering extremist activity”.
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