Meta sunk $15 billion to build the metaverse. Where did the money go ?

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Meta has invested over $15 billion in its metaverse project since the start of last year. The precise details of where this money will go remain unclear. Some experts expressed disappointment with the updates provided by Meta earlier this week and believed the technology would be more advanced. Something is loading.

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Meta has spent more than $15 billion on its Reality Labs metaverse venture since the start of last year, but so far the company hasn’t shared on precisely how much money it spent.

Some experts worry that the company is spending a lot of money after the bad.

“The problem is they’re spending the money, but transparency with investors has been a disaster,” said Dan Ives, technology analyst at Wedbush Securities.

“It continues to be a risky bet for Zuckerberg and the team as, for now, they are betting money on the future as they continue to have massive headwinds on their core business,” he added.

When Meta began disclosing financial information about Reality Labs last year, the company revealed that it had invested more than $10 billion in the business, with no end in sight to losses. So far, the company has reported a loss of more than $5 billion for the first six months of 2022, with some analysts predicting total losses for this year will eclipse last year.

Meta declined to comment for this story, but a company spokesperson said Meta does not detail financial details for its Reality Labs segment.

Ives said the amount of money Meta has spent so far on his metaverse business is concerning, especially given the updates he provided this week, including a new $1,500 headset. and a version of avatars with legs, which he called “disappointing”.

Benchmark analyst Mark Zgutowicz said, though he’s not sure, that he estimates at least 60% of Reality Labs’ losses are due to the huge research and development costs that go into building of an entirely new world.

“There’s no real metaverse, at least from an evolutionary perspective, until we can all wear glasses that don’t make us look like an alien or something,” said- he declared.

Zgutowicz, however, pointed out that Meta had legitimate reasons for trying to build everything himself.

“It’s hard for them to go out and acquire other unique software vendors because they’re so bound by regulatory constraints that they have to stay home and build something organically,” he said. .

“Where transparency could be better is how and when they expect to get a return on those expenses,” Zgutowicz added.

Granted, Meta isn’t the only company that has refused to itemize certain losses, which is standard practice in Corporate America.

Ivan Feinseth, technology analyst at Tigress Financial Partners, said he believes in Mark Zuckerberg’s long-term vision and the promise of the metaverse.

“When Facebook first bought Instagram, people laughed at him and said he was crazy. one of the best acquisitions of all time. [just] for Facebook – ever, in the world of acquisitions,” he said.

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