Mark Zuckerberg's plan to bring the metaverse to life is taking a financial toll on investors. Facebook, now known as Meta, reported a $4.28 billion operating loss in the fourth quarter of 2020 in its Reality Labs division. This division is devoted to developing virtual reality technologies and projects. The operating loss for the full year was a staggering $13.72 billion. Despite this, Meta is pushing forward with its vision, raising the price of its Quest 2 VR headset by $100 and introducing the new Quest Pro VR headset in October for $1,500. This week, Meta is running a sale on its high-end VR headset, offering a $400 discount for a limited time.
Investors may not be happy with the investments being made in the metaverse, but Meta is looking ahead to the potential of the project. The company hopes to see a billion people engaging in hundreds of dollars of commerce within the next decade. In the meantime, Meta is facing competition from TikTok and Apple's privacy update, which is limiting ad targeting, and the company reported a two-thirds drop in its stock value last year.
Despite the losses, Meta's fourth quarter results beat analyst's estimates and the company announced a $40 billion buyback, sending the stock up more than 17% in extended trading. Whether or not Meta's investments in the metaverse will start to pay off in the coming years is yet to be seen, but investors will be watching closely.