Meta’s expensive and dangerous metaverse ambitions

The division virtual reality of the American giant Meta accumulated them losses$2.81 billion in the 2nd quarter of 2022. But the US regulator, the FTCis also concerned about risks of dominant position in the sector of metaverse.

In 2021, Facebook changed its name to Meta. The firm headed by Mark Zuckerberg thus intends to affirm its shift towards metaverse. The giant is injecting billions of dollars to develop its technologies in this emerging market.

To settle, Meta focuses in particular on its virtual reality and augmented reality solutions designed by its Facebook Reality Labs (FRL) division. And the company is not looking at the expense with 10 billion dollars in cumulative losses in 2021.

Already $5.77 billion in losses in 2022 for Meta

In 2022, Meta will maintain a sustained investment rate. During the 2nd quarter of the year alone, FRL posted losses of $2.81 billion. This is slightly less than the previous quarter (2.96 billion).

During the same period, the department released just $452 million in revenue, down from the first three months of the year ($695 million). While Meta’s ambitions are great, its activities VR and AR contribute only marginally to quarterly revenue of $28.4 billion.

The 3rd quarter of 2022 will also be marked further decline in income. On the occasion of the publication of its results, the American digital giant warned that Reality Labs would once again generate a lower CA.

The CEO and founder does not show any concern, however. Mark Zuckerberg warned: the metaverse and its revenues are above all built over the long term. In the short term, Meta is therefore ready to lose money, a lot.

“The development of these platforms [metaverse] could unlock hundreds of billions, even trillions, of revenue over time,” says Mark Zuckerberg in response to questions from analysts.

FTC opposes takeover of Within by Zuckerberg

With its branch metaverse, the firm is thus preparing “the ground for a very successful 2030s”, says the CEO. However, this future could be obscured by the initiative of competition protection authorities.

These, especially in Europe, are concerned not to see an emerging market being completely dominated, like that of social networks today. In the United States, the FTC thus intends to block Meta and the acquisition of the virtual reality company Within.

For the Commission, “Meta could have chosen to try to compete with Within on the merits” rather than opting for a takeover. However, the government considers this technological sector as being “of vital importance”.

The FTC is therefore asking the courts to oppose this external growth operation by Meta. In response, the firm denounces a decision “based on ideology and speculation, and not on evidence”.

GAFAM also believes that this legal proceeding sends “a worrying message to all those who wish to innovate in the field of VR [Réalité Virtuelle] “. However, it is thanks to a series of takeovers and the inaction of regulators that Facebook has been able to impose its domination on social networks.

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