Meta has released its quarterly financial results, giving insight into its recent decision to raise the price of its Meta Quest 2 headphones.
Reality Labs, the division of Meta that works on its virtual reality and metaverse products, posted a net loss of $2.8 billion over the past three months.
Revenue for the period rose 48 percent to $452 million, which CFO Dave Wehner attributed to sales of Meta Quest 2 during Meta’s earnings call with investors, but that was largely offset by for the costs and investments Meta is making in Reality Labs.
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On the earnings call, the recently announced price increase for Meta Quest 2 units appears to have been confirmed to have been put in place in an attempt to mitigate Wehner’s losses at Reality Labs.
“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 announcement of the price increase of Quest 2”.
Wehner informed investors that Meta expects Reality Labs to post 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’s on our priority list. So we plan to continue to invest in Reality Labs… And in terms of our spending growth from 2021 to 2022, the bulk, the component The biggest driver of expense growth is Family of Apps, but we believe Reality Labs will continue to be an area of investment for us.”
Meta previously cited increased production and shipping costs as the factor behind the £100/$100 price hike for Quest 2, but it looks like this will do little to offset the expected losses as the company continues to invest in the metaverse.