The public got its first glimpse at how Meta Chief Executive Officer Mark Zuckerberg's proposed transition to a more immersive Internet is affecting his company's finances, and it didn't like what it saw.
Meta, the parent company of Facebook, said Wednesday its Reality Labs lost $3.3 billion last quarter. Reality Labs is the division that designs and builds the virtual reality devices, such as the Quest 2, that will be used in the metaverse.
This was the first quarterly earnings call since Zuckerberg announced his plans to focus more on the metaverse, a digital world of avatars and augmented reality.
"This fully realized vision is still a ways off," Zuckerberg said. "And although the direction is clear, our path ahead is not perfectly defined."
The company posted income of $10.3 billion for the quarter, down from the same period last year. It acknowledged headwinds that are cutting into the company's growth, such as competition for short-form videos.
"People have a lot of choices for how they want to spend their time and apps like TikTok are growing very quickly," Zuckerberg said, so the company is investing in its Reels app to compete.
Meta brought in more than $33.6 billion dollars in ad revenue for the quarter, but Zuckerberg said privacy rules in Europe and changes to Apple's iOS are forcing the company to adapt.
"We're rebuilding a lot of our ads infrastructure so we can continue to grow and deliver high-quality personalized ads," he said.
The company also announced on the call it would change its ticker symbol to Meta in the first half of 2022.
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