Facebook's parent corporation, Meta, is staking its future on the metaverse, particularly on the Reality Labs augmented and virtual reality industry. According to Meta's second quarter earnings report released on Wednesday, that sector, however, reported a $2.8 billion loss as the firm saw lower-than-expected profit and its first revenue fall since becoming public a decade ago.

The segment has had a run of multi-billion dollar losses since it was first introduced in August 2020, and Reality Labs' second quarter failure was the most recent. In comparison to the $2.4 billion Reality Labs lost in the same quarter last year, the unit's second quarter loss was 15% greater.

The virtual and augmented reality segment, which generated $452 million in revenue, much beyond the $431 million experts had predicted. Although it increased by 48% from $305 million in the same period last year, the unit's Q2 sales was still down 35% from its first-quarter revenue.

While this was going on, the primary 'family of apps' business sector of Meta, which includes Facebook, Instagram, Messenger, WhatsApp, and other services, reported $28.4 billion in revenue and a $11.2 billion profit.

The metaverse is one of two 'technology waves' that the company is riding, according to Mark Zuckerberg, CEO of Meta, who also discussed artificial intelligence during the earnings call. In a clear reference to the company's spat with Apple over a privacy feature it introduced last year, Zuckerberg said the business must contribute to the metaverse's development in a way that doesn't restrict competition.

In contrast to being constrained by the restrictions that competitors set on us, he stated, 'by contributing to the development of these platforms, we'll have the ability to construct these experiences in the way that we in the general industry believe will be best.' The development of a web version of Reality Labs' metaverse social platform Horizon Worlds as well as the creation of a mixed reality device (under development under the codename 'project cambria') geared toward professional users and scheduled to go on sale later this year were all highlighted by Zuckerberg on the Wednesday earnings call.

Although the company's entry into the metaverse is a costly endeavour, the 38-year-old creator of Meta said that he is convinced that its development would eventually release hundreds of billions or trillions of cash.