Complicated First Months For Meta's Metaverse

The metaverse is the future”. This phrase is often circulated in the cryptocurrency industry. Over the past few months, the metaverse has become a major topic of interest for mainstream businesses.

Governments around the world have poured their funds into this space. 
So it's no surprise that Meta [formerly Facebook] decided to tackle this space. What may seem more surprising is that its metaverse division has suffered losses for seven consecutive quarters.

Heavy losses for the metaverse division of Meta

Reality Labs, the virtual reality and metaverse division of the company run by Mark Zuckerberg, suffered losses of $2.8 billion. This was revealed during Meta's Q2 2022 earnings conference call. Reality Labs' revenue was $452 million. It should be noted that this division amassed $695 million in profits during the first quarter.

As can be seen in the image above, the total revenue for the second quarter of 2022 was $28.82 billion. In addition, the world economy is experiencing more than degraded conditions this year, which can also explain this situation.

Complicated first months for Meta's metaverse

Despite this downturn, Mark Zuckerberg, the company's CEO, has remained immensely positive about the metaverse. During the call, Zuckerberg hinted that these losses were not surprising and would continue for several years. He also assured that it would be so until the metaverse becomes more mainstream and more mature.

He added:

"This is obviously a very expensive undertaking for the next few years. I am convinced that we will be happy to have played an important role in its construction."

A battle between Apple and Meta in the metaverse?

The whole world seems to be in the race for the metaverse. South Korea, Dubai, and Japan seem to be leading this race at the moment. However, Zuckerberg thinks Apple could be an important addition to Meta. He believes the two companies are in a " very deep philosophical competition ".

Zuckerberg further told his employees

"It's a competition of philosophies and ideas, where they believe that by doing everything themselves and integrating internally, they're building a better experience for the consumer. And we think there's a lot to be done in specialization between different companies, and [that] that will allow a much larger ecosystem to exist."

Apple is said to have worked on both Virtual Reality and Augmented Reality models. Nevertheless, Zuckerberg thinks the future is not yet written here for the metaverse. Therefore, the search seems to be Meta's current priority.

A booming sector in the crypto ecosystem

This strong metaverse trend has been found in the cryptocurrency sector since the end of last year. Projects like Decentraland and The Sandbox notably saw their popularity skyrocket after Facebook's name change to Meta was announced last November. 

Decentraland and The Sandbox are respectively the 35th and 36th largest capitalization in the crypto sector. Both metaverses claim a growing number of users and are increasingly attracting international companies and brands and partners.

The Bored Ape Yacht Club's metaverse, Otherside, is also a prime example. This project has been a major success since its launch, starting with its Apecoin token, which is currently the 31st largest market capitalization according to CoinMarketCap.

If this sector, like the whole crypto market, suffers from the current conditions more than degraded, it continues to develop. Many projects are embarking on the adventure of the metaverse like Battle Infinity which we have already talked about.

This trend is likely to accelerate in the years to come with the arrival of large tech companies and giants of the global economy. The next few years could be those of the metaverse and it will be interesting to observe the evolution of the sector, particularly in the crypto ecosystem.