The Strategist

Meta spends $2.8B on virtual reality division in Q2

07/28/2022 - 10:24

American company Meta invested $2.8 billion in its virtual reality branch Reality Labs during the quarter. The company's revenues decreased year over year by over 1 percent for the first time in its history.

For the quarter that ended in June, American company Meta spent $2.81 billion on its Reality Labs virtual reality subsidiary. According to CNBC, such spending demonstrates the company's intention to bring the dominant social media platform into the so-called meta world.

Given that the business generated $8.36 billion in operating profit and $28.82 billion in sales during the reporting quarter, such virtual reality spending is significant but manageable for the business. Amid growing competition from TikTok, Meta also disclosed its first-ever year-over-year revenue decrease and provided a cautious digital advertising projection, according to the WSJ. It reported revenue that was slightly below Wall Street projections ($28.9 billion) and down almost 1% from the prior year.

Meta used the funds to acquire startups and established VR and AR headset manufacturers. The FTC has also filed a lawsuit against the business to stop it from buying the company behind the well-known VR app Supernatural. In the future, CNBC writes, these kinds of deals will be subject to intense regulatory scrutiny. According to the WSJ, Meta's stock gained more than 6% at the close then lost more than 4% in the hours following the report's release.