During an investor conference, Mark Zuckerberg revealed the enormous sums that Facebook spends on the development of the Metaverse.
The quarterly call with investors took place yesterday, where Facebook management discusses the latest quarterly numbers.
Despite recent revelations about Facebook and Apple’s app privacy measures, Facebook is doing well. 3.6 billion people regularly use social network services and in the third quarter of 2021 alone, the company continued $29 billion per – a 35 percent increase over the previous year.
That’s less than Facebook would earn without the current problems, but more than investors expected. The stock market reacted positively.
Oculus Quest 2 sales return to previous levels
Things are also looking good for Facebook in terms of other sales, that is, revenue outside of the advertising business. While these represent only a smaller percentage of total sales, they do reveal how Facebook’s hardware business is growing, which currently consists mostly of sales of the Oculus Quest 2 (test).
Other income increased from $497 million in the second quarter of 2021 to $734 million, an increase of 48%. This revenue was according to CFO Dave Wehner supported by “strong Quest 2 sales”.. At the end of August, the company launched a new base model of VR glasses with 128 gigabytes of memory.
After a sluggish summer and concerns about demand, interest in the device seems to be on the rise again and is returning to the level of the first quarter of 2021. Ray-Ban Stories camera glasses (info) have also “taken off”. for a good start”.
Facebook is already toning down expectations for the next quarter. Wehner assumes a drop in sales compared to the previous year. The reason: Facebook doesn’t expect it to top last year’s “Quest 2 strong launch.”
Zuckerberg Formulates Ambitious Metaverse Goal
Zuckerberg announced that the company will redouble its efforts in the coming years young people between 18 and 29 years old rather than older demographic data. “It’s going to take years, not months, to make this change, and I think it’s the right approach to building our business for the long term,” Zuckerberg said. Young people are the future of Facebook. The change of chat group is also a reaction to the strong expansion of TikTok.
The Facebook CEO did not announce a new name for his company as expected. It shouldn’t happen until Thursday on Facebook Connect. Instead, Zuckerberg laid out a concrete metaverse goal for the first time:
“Our goal is to help the Metaverse do just that, in this decade a billion people and achieve hundreds of billions of dollars in digital commerce,” says Zuckerberg.
As early as 2017, the founders of Facebook announced that one billion people would join the virtual reality want to make, but without setting a target date. According to Zuckerberg, Facebook will not be able to build the Metaverse alone, which he considers the successor to the mobile Internet. So the focus shifted from a pure Facebook VR platform brand to a metaverse spanning all platforms and companies.
Facebook wants to disclose investments
Facebook doesn’t just want to make tech glasses, it wants to create an entire ecosystem. “We are simultaneously developing and building multiple generations of our VR and AR products, a new operating system and development model, a digital trading platform, content studios, and of course a social platform,” says Zuckerberg.
Because the implementation of these ambitious objectives with huge cost are connected, Facebook wants to make investments in this area transparent from the next quarter.
In addition to individual Facebook apps, income and expenses for Facebook Reality Labs, the department that develops VR and AR technologies, are also listed. This should clearly indicate how the hardware, software, and content work.
Yearly costs in the eleven figure range
In this context, Zuckerberg revealed for the first time how much Facebook spends on research and development: According to this, the bill in 2021 alone amounts to ten billion dollars.
And there’s still no end in sight. “I expect these investments to continue to grow over the next few years,” Zuckerberg added. Facebook Reality Labs already has 10,000 employees and plans to add 10,000 more professionals in Europe over the next five years.
Zuckerberg waits for Facebook within one to three years will provide the basics of the metaverse and will continue to lose heavily during this time. “It’s not an investment that will pay off for us anytime soon,” says Zuckerberg. It wasn’t until later in the decade that the metaverse became a “real business story”.
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