Facebook’s metaverse business, Facebook Reality Labs, aims to spend at least $10 billion this year on AR and VR gear, software, and content.
“We are dedicated to bringing this long-term vision to life, and we intend to raise our investments for the next few years,” the business said in a statement issued today afternoon. AR and VR, according to Facebook, are at the heart of “the next generation of online social interactions.”
The division, which already produces the Oculus Quest headgear and the Portal series of calling devices, is obviously positioning itself as Facebook’s next big thing. For one thing, CEO Mark Zuckerberg has spent the last few months talking constantly about the metaverse.
And today, Facebook said that it will begin disclosing revenues for its Reality Labs sector separately from Facebook’s core ad business, which brought in $28 billion in the most recent quarter alone. It’s a signal to investors that the Reality Labs company is important and should be valued independently from Facebook.
It’s also an attempt to divert attention away from what’s going on with Facebook’s results today. The firm missed sales forecasts by approximately $1 billion (which isn’t much at Facebook’s scale), highlighting some of the company’s current challenges. Facebook attributes this to a variety of factors: COVID-19, the economy, and Apple’s latest ad-tracking modifications — all of which were discussed last week when Snap released its profits.
In April, Apple released an update to iOS that included a new privacy feature that requires users to opt in to allow applications to monitor them across apps and websites. Initially, social media firms expressed uncertainty about how it might affect their ad operations, which rely on monitoring in part to determine ad effectiveness.
Facebook has had a difficult few weeks. The Wall Street Journal published a series of stories detailing significant missteps by the company, including moderation issues and concerns about the mental health of younger users; the whistleblower who leaked those documents then testified before Congress; and just this morning, dozens of stories were published by a consortium of news outlets, including The Verge, covering even more problems for Facebook, including concerns about declining teen usage. In the midst of it all, Facebook’s applications were down for a significant portion of a day in early October.
On a call with investors on Monday, Facebook CEO Mark Zuckerberg defended the stolen papers, saying they were part of a “coordinated attempt” to “create a false picture of our organization.” He soon shifted to discussing Facebook’s efforts to woo young people and construct the metaverse, supporting the notion that the business would prefer to drive toward something new where it would be able to avoid some of the attention.