The Reality of Meta's Reality Labs

You have all seen the chart of Meta’s Reality Labs (RL) losses. Just as a reminder, ever since Meta started reporting RL as a separate segment, it has reported a cumulative loss of $73 Billion in the last 20 quarters. Obviously, they were incurring losses even before reporting the segment separately; so it is very conceivable that Meta’s accumulated losses tally may be $100 Billion by 2025.

Sometimes, I joke with my friends that as a Meta shareholder, I often wonder if I will receive a Christmas gift from RL employees since all the shareholders have been paying for this with eyewatering losses year after year. As the largest shareholder of Meta, Mark Zuckerberg is the Chief Generosity Officer here. Thankfully, there were recent reports that Meta intends to cut “up to 30% of Metaverse budget”. It appears much of this cut will affect VR and related investments in Metaverse whereas Meta’s investments in AR glasses is likely to remain unaffected. For context, half of Meta’s investments in RL is already in AR glasses. However, another recent news report that received lot less attention really soured my optimism even for Meta’s efforts in AR Glasses which I will discuss behind the paywall.

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