I read [this article](https://kotaku.com/facebook-metaverse-vr-2022-billions-13-billion-quest-2-1850062517) this morning about how ~~Facebook~~ Meta’s VR division “Lost $13.72 Billion In 2022”. The article later says that Meta is burning through money. But if they’re spending money to generate a product, doesn’t that money go somewhere? If Meta doesn’t have the $14 billion, who does?
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The factory I work at once spent 3.1 million dollars on a machine that was supposed to revolutionize production for some of the parts we made. They spent years and even more money trying to get it to produce good parts. It never did produce good parts. A couple of years after that purchase they bought a different machine for a couple mil, for a different part. While this machine did produce some good parts, about 1/3 of what it produced were scrap and the machine broke down constantly and ran slower than the old production line.
They were spending money left and right, but they never actually made a profit from those purchases. It was costing them even more money than it cost them with the old production line that required more people to run.
This is an example of how companies burn through money. They make investments, maybe in new machines or new products. They spend thousands of hours in the hopes that what they are spending their money on will actually make them even more money than they spent to get to this point. When that doesn’t pay out in the end, say because the product they were spending all of that time(wages) and money on doesn’t earn them any money they are just throwing money away. They could have continued on as they were before, without spending that money and they would have come out ahead.
For something like VR, they spend a large amount of time and money trying to develop a brand new product in the hopes that when it’s completely developed, they’ll be able to sell it and make back all of that money they spent, plus even more.
Sure, that money goes into the pockets of the employees and any third party businesses they pay, but the company itself has lost money. They aren’t a business for the sole purpose of giving away money to people. They are a business trying to make money. And their investors expect to get a return on their investment, which they are less likely to get if they are spending money on developing a new product and not making any money on that failed product.
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