Facebook’s CFO said that its operating profit might fall by $10 billion this year since they’re diverting the investments heavily into Facebook Reality Labs.
This, in turn, is used for developing Facebook Metaverse, a much ambitious project the company has been planning for so long. Facebook is reportedly hiring over 10,000 people for building the Metaverse and even thinks of changing the name to be more relevant to the new concept.
Facebook Priorities Metaverse
It’s known that Facebook is long hanging to an internal project called Metaverse – a shared virtual reality world where Zuckerberg called it the successor of mobile internet. However, bringing this ambitious project to reality needs heavy investment, so Facebook is just doing that now.
Yesterday, Facebook’s Chief Financial Officer, David Wehner, said its overall operating profit in 2021 will be reduced by approximately $10 billion since they’re diverting the funds to Facebook Reality Labs, which is working aggressively on building Metaverse.
He added that Facebook is “committed to bringing this long-term vision to life, and we expect to increase our investments for the next several years.” Facebook buying the Oculus earlier is also a strategic move, as it’s the crucial device for accessing Facebook’s Metaverse.
Aside from this investment diversion, Facebook also mentioned the impacts from the COVID-19 outburst last year, general macroeconomic issues, and Apple’s iOS 14 changes as critical factors affecting its revenue this year.
Last year, Apple introduced the App Tracking Transparency policy, which forces all app developers to ask users’ permission to track them.
As many opted out of that, targeted ads businesses like Facebook and Google were heavily impacted. And with Metaverse, Facebook is betting the whole future on it, as the founder is trying to make Metaverse a mainstream mission and even publishing Reality Labs financials as a separate unit soon.