The "Reality Labs" responsible for Meta's Oculus VR headgear, Portal smart screens and Ray-Ban Stories smart glasses lost $2.8 billion last quarter.
From Scharon Harding's "Meta’s flailing Portal repurposed as a wireless portable monitor" posted Thursday on Ars Technica:
In June, The Information reported that Meta would stop making Portals for consumers and start pushing them as business tech as part of a hardware strategy restructuring to appease investors. At the time, the site reported that Meta sold 600,000 Portals in 2020 and 800,000 the following year, according to market analysis firm IDC.
Meta's track record in hardware hasn't been great. The Quest 2 is one of the most-used virtual reality headsets, but Meta's Reality Labs AR/VR division, which also accounts for its Portal and Ray-Ban Stories smart glasses, is an expensive endeavor that lost $2.8 billion in Q2 2022. In June, Bloomberg reported that the division's plans for a Meta smartwatch were scrapped about a month after Meta said it would be canceling and delaying projects to save money.
My take: This is the competition for Apple's unannounced AR/VR goggles?
See also: How Apple will show Mr. Market that augmented reality is real
As I said a few days ago, Zuckerberg has no freaking idea where to go with the “metaverse” and no experience whatsoever with building hardware platforms. What could go wrong?
Reminds me of the business model of selling cheap, razor thin margin smartphones. Is the Oculus part of some well thought out Meta ecosystem? Beats me!?!
The question that I have is how did they lose so much money in 1 quarter in that division? Which leads to many other questions. Did they manufacture too many devices and they are writing down inventory? Or was this partly related to expenses for downsizing personnel? If they lost that money with sales of 3 million units in the quarter, then did they get caught with supply chain issues or did they not price their devices accurately? Did sales start to drop as the rumor mill of an Apple device being debuted in first quarter of ’23?
Meta has proven that hardware is a hard business. Their transition from solely software/advertising to hardware has not gone well. Did Zuckerberg take on too much and or is it beyond his level of expertise? It will be interesting to see if we find out.
ARInsider estimate <10M total Oculus 1 and 2 units sold entirely, and based on revenue for MRL and breakdown of software and hardware, they feel the total Oculus units sold in Q2 to be <1M (973K), so that’s a slowing number and not sure how Meta will reverse that trend, if it is even important to them.
https://arinsider.co/2022/08/03/how-many-quest-2s-did-meta-sell-in-q2/
The top 3D games run on different platforms and are unlikely to let you easily leave & take that Sword of Damocles you just bought to a competitor’s world. At least not anytime soon.
Apple’s iPhone & iPad already host some version of most major game platforms, except Fortnite. If any firm could get the various 3D players to coalesce it is Apple, Inc.
The touchiest of real estate.
It’s bad enough for Meta-huh? to be up your data keister, let alone on your melon.