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Meta — formerly Facebook — reported positive news for general investors but bad news for those interested in its virtual reality (VR) division in its Feb. 1 earnings report.
The company saw substantial revenue, bringing in $32.17 billion during Q4 2022 and $116.61 billion over the entire year. Despite year-over-year losses (4% for Q4 and 1% for the entire year), Meta’s Q4 revenue was on the high end of the $30-$32.5 billion estimate that it predicted previously. The firm also announced a $40 billion buyback today.
That news has positively affected the value of META stock, up 2.79% over the day. META has risen from $148.01 to $153.12 over the past several hours.
Meta also reported that its Reality Labs division saw $4.28 billion in operating losses in the fourth quarter of 2022 and $13.72 billion in operating losses over the entire year. According to reports from CNBC, the division’s fall in revenue seems to be due to declining sales and a need for VR technology that can be used with its devices.
Reality Labs is responsible for Meta’s “metaverse” products, including services such as its Horizon Worlds game and products such as its Quest headsets. Reality Labs also became responsible for various artificial intelligence (AI) projects beginning in 2022.
However, Reality Labs’s metaverse ambitions are best known in the crypto community for spurring the trend of non-fungible tokens (NFTs) in virtual reality projects. Horizon Worlds features in-game tradable items, and although it does not use NFTs as the basis for those items, competing blockchain projects have capitalized on the similarity.
The crypto-based VR world Decentraland saw its MANA token gain about 550% over November 2021, just after Meta announced its metaverse plans at the end of October 2021. The Sandbox similarly saw its SAND token gain 850% that month. Several mainstream companies also began pursuing metaverse and NFT plans then.
Hype around the trend died down in 2022, and the tokens named above have fallen back to baseline prices. Today’s news suggests that the trend could wane further.