Today during Meta’s Q1 2022 earnings call CEO Mark Zuckerberg told shareholders that they should buckle up for the long haul because the company’s steep investments in XR and metaverse technologies aren’t expected to flourish until the next decade.

Today Meta gave its shareholders a quarterly update, in which the company overviewed its latest earnings and expenses.

For Reality Labs, the company’s XR and metaverse division, revenue was up 30% year-over-year, from $534 million in Q1 2021 to $695 million in Q1 2022.

However, costs associated with running the Reality Labs division rose even more, up by 62% year-over-year, from $1.83 billion in Q1 2021 to $2.96 billion in Q2 2022.

This growth in costs wasn’t unexpected. Meta told investors last year they should expect the company’s XR investments in 2021 to total $10 billion… and to grow even more from there.

Meta CEO Mark Zuckerberg has been asking for investor patience in his vision for XR and metaverse technologies for years. Back in 2017 he was already prepping investors for a long haul, saying that in order to reach mainstream tracition, XR would need a 10 year trajectory from the year the company acquired Oculus—a timeline that pushed out to 2024.

But in Zuckerberg’s eyes that timeline may have slipped considerably.

Today during Meta’s Q1 2022 earnings call, during a lengthy, unscripted response to a shareholder question, Zuckerberg said that he didn’t expect the company’s metaverse and XR investments to really flourish until the 2030s.

So we have multiple teams in parallel that we’ve sort of now spun up [to build XR and metaverse tech]. This goes for VR as well as augmented reality and the other work that we’re doing and is sort of driven by the success that we feel like we’re seeing in the markets and the technology is starting to be ready to really ramp up.

So those [operating losses for Reality Labs], we’re experiencing today. I mean, having those teams operating is something that you see weigh on the results and is one of the reasons why I think the growth rates and expenses have been so high, and I think we’ll continue investing more over some period. But at some point, we will have all those product teams fully staffed for a few versions into the future and then the growth rates there will come down.

But it’s not going to be until those products really hit the market and scale in a meaningful way and this market ends up being big that this will be a big revenue or profit contributor to the business. So that’s why I’ve given the color on past calls that I expect [substantial revenue from Reality Labs] to be later this decade, right?

Maybe primarily, this is laying the groundwork for what I expect to be a very exciting 2030s when this is like—when this is sort of more established as the primary computing platform at that point. I think that there will be results along the way for that, too. But I do think that this is going to be a longer cycle.

To be fair, the company’s initial ’10 year trajectory’ included only a vague idea of the metaverse—something that, despite still being somewhat nebulous—has come into clearer focus in the eight years since Meta acquired Oculus and set out to build ‘the next computing platform’.

Meta arguably didn’t take its first stab at trying to figure out what the metaverse might look like until 2016 when it began seriously experimenting with social VR in what would ultimately become Facebook Spaces, the company’s first social VR app which launched in 2017.

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Even so, progress has been slow. Facebook Spaces was shut down in 2019, to be superseded by Horizon. But Horizon—which was first announced in 2019—didn’t launch until the far end 2021… and it’s still only available to a limited audience.

For shareholders seeing Meta spend $2–$3 billion on Reality Labs per quarter… it makes sense why the company is being regularly questioned about its steep spending. Zuckerberg’s suggestion that the investments won’t really flourish until the 2030s surely isn’t going to help matters.

To that end, Zuckerberg said during the earnings call that the company’s plan is to use revenue from its non-XR businesses (Facebook, Instagram, and the like) to fund its aggressive and forward-looking spending. For investors to stick around for the long haul, Zuckerberg is going to need to continue to emphatically sell his belief that XR is the next computing platform and explain why shareholders should stick around for the ride.

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Ben is the world's most senior professional analyst solely dedicated to the XR industry, having founded Road to VR in 2011—a year before the Oculus Kickstarter sparked a resurgence that led to the modern XR landscape. He has authored more than 3,000 articles chronicling the evolution of the XR industry over more than a decade. With that unique perspective, Ben has been consistently recognized as one of the most influential voices in XR, giving keynotes and joining panel and podcast discussions at key industry events. He is a self-described "journalist and analyst, not evangelist."
  • Arno van Wingerde

    And that is the power of big-tech in USA: people invest insane amounts of money and you can just keep going and going throwing money out by the bucket!
    But if it works…. the dividends are there! The bad part is that the same mechanism can be abused to push out the competition, then up the profits. Some things will fail … google is very good at killing things rather early… I think Facebook may be on the right track here!

    • jimmy

      In what galaxy capitalist businesses care about competition Amazon went out of their way to kill all of them

  • Ragbone

    I’m happy to accept money to play VR games, if anyone wants to donate for that.

  • I mean, he’s right, and I’m happy that he’s clarifying this to all the cowboys that are here for the easy money

    • Sebastian Piotrowski

      Agree! Except cowboys (at least nowadays :) ) are not after easy money … – they are after a life style! :) You are talking about fuc…ing, lazy, gready pigs… – who (I’m unfortunately afraid…) will loose their precious money bc of Zuck’s big idea….

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  • Till Eulenspiegel

    I think Elizabeth Holmes said the same thing about Theranos to the shareholders.

    • Medical is very different from AR/VR.

      I’m glad there is forward-thinking and investment risk being made on AR/VR. I prefer that than Apple holding on to $200 billion in cash that isn’t being as aggressively invested into building new tech.

      • Michael Wiebrands

        Apple spent 20 billion on R&D last year. We also know Apple is investing heavily in XR development and that they have been for at least 10 years. So it’s feasible that Apple is investing similar amounts into XR at the moment.

    • FrankB

      Here in the UK ministers said it will take 50 years to see Brexit benefits…..and a small majority of fuckwits still voted for it. 10 year wait for benefits isn’t too bad by comparison.

    • James Cobalt

      Not the same. Theranos’ technology never worked. Meta has working products in the hands of millions of people, and working proofs of concept for many more.

    • Bob

      Holmes had nothing to begin with except words and products ripped off from others and repackaged. No not even their labs were real.

      Meta/Facebook have a working R&D division with genuine scientists and internally developed prototypes. They have a real product; it’s called the Quest 2.

  • xyzs

    Yeah and killing the great Oculus brand will not help for sure. His ego costed the company several additional bilions.

    If he renamed instagram Meta Insta and WhatsApp Meta App, his company would almost go bankrupt. The only reason he did that is because nobody knows Instagram/WhatsApp founders, however everybody in VR knew Palmer Luckey, and that was bothering him.
    Just like Elon Musk who tries to erase the two real founders of Tesla from history.

    • James Cobalt

      Only enthusiasts like us know about Palmer Luckey (who is also a controversial, not universally-adored figure, even amongst fellow enthusiasts and developers). Mainstreamers have no idea who the people are behind the products, and can barely tell the brands apart or understand the different product capabilities. Oculus was a great brand for enthusiasts but means nothing to the larger world. Granted, neither does Meta, but that will eventually change as they pump billions of dollars into it.

      • Bob


        It’s almost guaranteed that the average Joe has barely any idea who or what Oculus are to begin with and if they did they couldn’t care less about its name change. Why? Because the wider general public still has absolutely no interest in VR/AR affairs.

      • Sebastian Piotrowski

        EXACTLY. Except I’m not sure if that’s ever going to change…

    • Damn

      Damn you guys still crying over this move?

    • Bob

      You’re living in a very, very small bubble of a community of VR enthusiasts. Everything you have just said is of no concern to anyone outside of your bubble i.e. people that use RoadtoVR and other VR focused media channels.

    • ViRGiN

      Stop being so nerdy. Get a life.

      • Sebastian Piotrowski

        That’d be the NERDIEST thing I’ve ever heard! :D NOBODY – in the scale Zuck talks about – cares about Palmer, Oculus brand nor even VR… :) They just a smile at me, thinking that a cool guy became a weirdo in his old years… :D

        • ViRGiN

          lmao calm down pole. stop projecting.

  • mappo

    Holy Sheet a billion dollars a month! Sure would be nice to get some new hardware for that kind of spending!

    • Guest

      A quarter trillion for 18 years tops is not bad for a trillion dollar company. Shareholders will just love that!

    • Bob

      Yes that kind of spending has led to Project Cambria slated to be launched later this year.

  • Sebastian Piotrowski

    I have dozens of friends amd MOST of them only just heard VR term… – they dont have a REMOTE idea, what’s this is all about…. A few of them who are die hard gamers so I talk to them about my experience, just SMILE… :) ONLY ONE of them, experiencing VR personally in my place, decided to get onboard – and now his hmd only gathers a dust… :) I’m afraid Zuck’s hopes might never come true… :) PS Thank god, I don’t care as long as software/mods let me play standard games in my headset :)

    • ViRGiN

      Sad state of vr, when vr native game in 2013 is the hot crap in 2022

  • *Might* not hurt if “Meta” would stop shooting itself in the foot with all of this lame rebranding. People were just getting to understand what an “Oculus” was, and now it’s name is just some nebulous, confusing “Meta” thing.

    And “Meta” already has a big understanding as a word, like meta-gaming or meta sarcasm. Trying to suddenly take over an already often used word for VR Gear is just *INSANE*. It was a HUGE mistake rebranding! It’s like building a new railroad track, right next to an old railroad track, and expecting the train to magically jump sideways. It’s a mass DERAILMENT of brand!

    And why use the name “Meta”? To chase the “Metaverse”? That “Metaverse” has NEVER WORKED OUT! It’s a dumb idea from the get go. Games without boarders? Does anyone really want Mario in their Halo? IP properties with different worlds *SHOULD* be different worlds. You might as well go to a restaurant and ask them to dump your whole meal in a blender before serving it. It’s a DUMB IDEA! It didn’t make sense in Ready Player One, it’s never worked for any company that’s tried it to date, and it WILL NEVER WORK for Facebook, Meta, Ham-And-Cheese-On-Rye, or whatever Zurkerburg decides to call his company next!

    Stick to the games, fool! Get some content out there worth playing! Luckey was already moving the company in that direction before they ousted him from Oculus. Carmack could have told you the same thing. More games, better content, AAA stuff! That’s what’s holding back “Meta” from profitability NOW.