• Hey, guest user. Hope you're enjoying NeoGAF! Have you considered registering for an account? Come join us and add your take to the daily discourse.

META'S VR efforts cost them 10BN last year

Kerotan

Member
Facebook or META for the first time broke down their VR efforts. 2 years ago they lost 6BN and last year 10BN. So while on the outside it looks like Quest is a success it comes at a very costly price. They don't expect the VR market to be sustainable anytime soon for them.

"Net loss from Meta's Reality Labs, the company's augmented and virtual reality business, was $10.2 billion for the full year 2021, compared with a $6.6 billion loss the previous year. It was the first time the company had broken out this segment in its results."

"Zuckerberg had previously warned that the company's investment in this area would reduce 2021 operating profit by $10 billion and would not be profitable "any time in the near future." Reality Labs posted revenue of about $2.3 billion in 2021. The company has not made public the sales numbers for its virtual reality Quest headsets."

 
I heard this on the news this morning and was shocked.

I guess that's how you get a portable VR headset with the simplest tracking and setup around, that can also double as a wired / wireless PC setup, and it's only $300. Oh, and fund a bunch of games.

I'm just enjoying the Oculus while it lasts. Been fun so far.
 
Last edited:

Ezquimacore

Banned
This company controls the social aspect of humanity, they don't care about those 10b, they care about keeping the control for the next years. If VR becomes a thing for everyone, and Meta is your door to that content, then they win no matter what.
 

MikeM

Member
Its a niche market relative to the rest of gaming. Good luck getting that investment back.
 

GHG

Gold Member
Making hardware is hard and expensive. Most software companies learn this the hard way.

Certainly justifies Microsoft's decision not to enter this space.

They are already heavily involved in the space but they are focused on enterprise for now because the margins are bigger.
 

GHG

Gold Member
They're going all-in regarding metaverse, they expect to make that money back a hundredfold within the next ten years or so. I for one am very happy that they're putting so much money into developing the tech. It helps the entire industry.
 

hlm666

Member
Is that just hardware losses (or the bulk) - that's pretty darn huge
Was for the reality labs segment/division so it's everything. They are losing money on quest 2 sales (selling at a loss) but there has never been concrete numbers anywhere yet.
 
Their investment strategy is obviously for longer term gains. Being at the forefront of this kind of tech was always going to be costly. Both Quest and Quest 2 will be loss leaders to basically disrupt the market and penetrate consumer mind share.

It will be a hearts and minds battle, your average consumer will likely associate Meta with VR in years to come and that obviously doesn't come cheap, as you're throwing resources at an ever evolving technology. I'm glad someone with the capacity to actually fund this sort of research and development exists, because VR is so exciting as a platform and is a genuine game changer in terms of immersion and interaction.
 

CobraAB

Member
I think it is VR AND AR.

I have to believe its the AR that is really costing the money. Its certainly seems to present the greater challenge to get right.
 

SlimySnake

Flashless at the Golden Globes
There is no way you can lose ten billion in a year from seeing oculus at a loss. Sony was selling ps3s at a $250 per console loss and even they were only around $2 billion a year.

I am also not buying that new investments cost them $10 billion. They didn’t acquire anyone as big as bungie or Activision.

I think their business is slowing down and they are blaming it on vr.
 

GHG

Gold Member
There is no way you can lose ten billion in a year from seeing oculus at a loss. Sony was selling ps3s at a $250 per console loss and even they were only around $2 billion a year.

I am also not buying that new investments cost them $10 billion. They didn’t acquire anyone as big as bungie or Activision.

I think their business is slowing down and they are blaming it on vr.

Look at their financials, they are not saying those losses are coming from selling the hardware at a loss. It's all CapEx - R&D, business unit creation/expansion, etc.
 

Hari Seldon

Member
Look at their financials, they are not saying those losses are coming from selling the hardware at a loss. It's all CapEx - R&D, business unit creation/expansion, etc.
Yeah they have thousands and thousands of employees working on all kinds of shit unrelated to their actual headset.
 

Three

Member
Certainly justifies Microsoft's decision not to enter this space.
Does it when they just spent more than 7x that? At least John Carmack and co are building cool shit and new games with that money. A company spending $10B dollars for new hardware/games for me is absolutely fine by me.
 

brian0057

Banned
Making hardware is hard and expensive. Most software companies learn this the hard way.



They are already heavily involved in the space but they are focused on enterprise for now because the margins are bigger.
It also makes a lot more sense.
VR has immense potential when it comes to industrial, medical, and aerospace applications, as well as training. And with big lucrative contracts from both governments and private entities, it's a no-brainer why Microsoft isn't into the "VR for gaming" monetary black hole.
 
Last edited:

mckmas8808

Banned
There is no way you can lose ten billion in a year from seeing oculus at a loss. Sony was selling ps3s at a $250 per console loss and even they were only around $2 billion a year.

I am also not buying that new investments cost them $10 billion. They didn’t acquire anyone as big as bungie or Activision.

I think their business is slowing down and they are blaming it on vr.

They wouldn't lie about this in a corporate report. We just don't know how much their headsets cost them. They are probably losing over $400 a headset at this point.
 

TheMan

Member
It's a long term strategy but so far, yeah VR did not set the world on fire like many expected. That said I think Oculus had a pretty good christmas this time around so maybe things will start picking up?
 

Trogdor1123

Member
There is no way it is just consumer hardware. This must be through partnerships and the development of the infrastructure. I’d love to see you here all the money went
 

IDKFA

I am Become Bilbo Baggins
Certainly justifies Microsoft's decision not to enter this space.

Microsoft are investing a lot of money into the metaverse, which is VR and AR based. It's part of the reason why they paid 70bn for Activision.
 

kingfey

Banned
Just like cloud gaming, this tech is in its early phase.
Console were in similar position too. difference is, technology advances faster now.

VR would the main the stream in 10 years. and if you dont invest in that area right now, you will lose alot of space once it becomes a hit. There is a reason why new consoles dont last long. The big 3 have alot of the market share.
 

kingfey

Banned
There is no way it is just consumer hardware. This must be through partnerships and the development of the infrastructure. I’d love to see you here all the money went
most money goes in to that position. You dont spend money on consumers. You spend money on tools that you need, to expand your business.

Google spent alot of money on cloud infrastructure. They could have simply spent money on 3rd party games. But they made stadia stable 1st, then games later.
 

ResurrectedContrarian

Suffers with mild autism
Well I'm glad Facebook Meta spent all that cash to subsidize VR, because the Quest 2 was finally an economically sound enough option for me to jump in and use it on PC VR. I know at least a couple other people in my daily life who also are all-in on PC VR this year after waiting years to jump in, specifically because they picked up a Q2 for cheap recently.
 

CobraAB

Member
There is no way you can lose ten billion in a year from seeing oculus at a loss. Sony was selling ps3s at a $250 per console loss and even they were only around $2 billion a year.

I am also not buying that new investments cost them $10 billion. They didn’t acquire anyone as big as bungie or Activision.

I think their business is slowing down and they are blaming it on vr.
Billion is the new million now.
 

levyjl1988

Banned
They are trying to chase the dream of Ready Player One.

The problem is they don't have the ideal hardware to pull it off, everything right now is beta.
We need extremely high graphics, fidelity and latency, remove every form of hardware resistance such as wireless, weight the size of glasses, and accurate tracking.
So far everything VR produced is clunky it's like comparing a modern recent iPad to a desktop from 1995.
 

kingfey

Banned
They are trying to chase the dream of Ready Player One.

The problem is they don't have the ideal hardware to pull it off, everything right now is beta.
We need extremely high graphics, fidelity and latency, remove every form of hardware resistance such as wireless, weight the size of glasses, and accurate tracking.
So far everything VR produced is clunky it's like comparing a modern recent iPad to a desktop from 1995.
Early stages have these problems. You dont get perfect machine out of the pat. You need tons of testing and failures to achieve a working one.

Consoles went from bit games to what we have now.
 

fart town usa

Gold Member
+ Wireless PC gaming. Best device to play HL Alyx on by far.
For sure, you need a powerful rig for all that though right? I haven't looked too much into it but I'm assuming that the Quest 2 is just acting as a hub for what the PC itself is outputting. Basically, the PC is doing all the work and the Quest 2 is just allowing you to play it in VR?
 
For sure, you need a powerful rig for all that though right? I haven't looked too much into it but I'm assuming that the Quest 2 is just acting as a hub for what the PC itself is outputting. Basically, the PC is doing all the work and the Quest 2 is just allowing you to play it in VR?
Yes, like every other PC VR headset. Only this also works by itself with different games, and is also a fraction of the price.
 
Top Bottom