What is the multimillion dollar amount invested in MetaVase and what do experts doubt about its purpose?

What is the multimillion dollar amount invested in MetaVase and what do experts doubt about its purpose?
Just how much of a multimillion-dollar investment Meta has invested in a venture, experts have doubts about what Getty Images

Meta has invested more than $15 billion in its Metaverse company Reality Labs since early last year, but so far the company hasn’t shared what it’s spending the money on, Business Insider reported.

Because of this, “some experts worry that the company is spending good money on bad money.” In this regard, Wedbush Securities technology analyst Dan Ives said: “The problem is that they spend money, but transparency with investors is a disaster.”

“It remains a long shot for Zuckerberg and his team, because right now, they are betting money on the future while there is huge headwinds in their core business,” the expert added.

When Meta began disclosing financial information about Reality Labs last year, the company said, “There is more than $10 billion invested in the company and there is no end to the losses. So far, the company has reported a loss of more than $5 billion in the first six months of 2022, and some analysts are predicting that this year’s total loss will surpass last year’s, Business Insider said.

Meta declined to comment for this story, but a company spokeswoman said Meta does not disclose financial details of its Reality Labs division.

Zuckerberg's company has reported a loss of more than $5 billion in the first six months of 2022, REUTERS/Erin Scott/File Photo
Zuckerberg’s company has reported a loss of more than $5 billion in the first six months of 2022, REUTERS/Erin Scott/File Photo

Ives said the amount of money Meta has spent so far on his Metaverse venture is concerning, especially given the upgrades he delivered this week, including a new $1,500 headset and a version of avatars with legs. , he called it disappointing.

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Meanwhile, Mark Sgutowicz, an analyst at Benchmark, said, “Although he’s not sure, he estimates that at least 60% of Reality Labs’ losses are due to the enormous R&D costs involved in building a new. world.”

“Until we can all put on glasses that don’t make us look like an alien or something, there’s no real metaverse, at least from a measurable perspective,” he asserted. However, Zgutowicz noted that the meta has legitimate reasons for trying to build everything itself.

“It’s difficult for them to go out and acquire other unique software companies because they’re tied to regulatory burdens and they have to stay in-house and build something organically,” the analyst said.

“Transparency is going to be big on how and when they expect to get revenue from this spending,” Zgutowicz said.

Meta “is not the only company that has refused to detail certain losses, a common practice among US companies.” In this sense, Evan Feinseth, a technology analyst at Tigress Financial Partners, said he believes in Mark Zuckerberg’s long-term vision and the promise of Metaverse.

“When Facebook first bought Instagram, people laughed at him and said he was crazy. They said: ‘This guy is going to throw all this money at it’, and Instagram turned out to be one of the best acquisitions in history. “Not only for Facebook, but also for the world of acquisitions,” the specialist said.

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