Virtual reality startup Improbable said Wednesday that it reduced losses by 85% in 2022, a year that saw the company pivot its focus to powering new “metaverse” experiences.
The British company said in a press release that its revenues more than doubled last year to £78 million ($95 million), as its work on metaverses expanded significantly.
It recorded a loss of £19 million in the 2022 fiscal year, but this compared to a £131 million loss the year prior.
Improbable CEO Herman Narula said the company had reported its “best financial year” on record which reflected how its bet on the metaverse had paid off.
Improbable has historically burned through lots of money as it attempts to make its vision for vast virtual worlds a success. Critics have raised questions about the commercial sustainability of the business.
Improbable said that part of the reason behind the company’s reduction in losses was a dramatic reduction in the cost of running mass-scale virtual events.
Whereas initially it took millions of pounds to host one event, it now takes hundreds of thousands of pounds, the company said, and it anticipates this to continue to fall.
The year also saw Improbable divest two of its games studios, Inflexion Games and Midwinter Entertainment, and sell off a business unit focused on servicing defense clients.
Improbable finished the year with £140 million cash in the bank, signaling ongoing support from shareholders, the company said.
Improbable’s backers include the likes of SoftBank, Andreessen Horowitz.
Full accounts for Improbable are yet to be released on Companies House, the U.K.’s official register of companies.
Metaverse pivot
In 2022, Improbable unveiled its ambition to become a major player in the so-called “metaverse” — the concept for a vast world, or worlds, in the digital sphere where people can work, buy and sell things, or just hang out.
The company has been working with players in the digital asset sphere, including Yuga Labs, which it worked with to build out the Otherside metaverse, where people can make their own digital avatars, attend events, and more.
The company doubled down on its metaverse strategy earlier this year with a white paper detailing its vision for MSquared, a “network of interoperable Web3 metaverses.”
The service — a complex piece of technical engineering with significant computing requirements — is intended to be accessible via cloud streaming, meaning you won’t have to download any software to jump into one of its worlds, similar to how movies and TV shows are accessed on Netflix.
It’s drawn interest from big names in sports and entertainment, like Major League Baseball (MLB).
The company struck a major deal with MLB to launch a new virtual ballpark based on Improbable’s metaverse technology. People in the MLB metaverse can choose any seat they’d like to watch a game, or pick a camera spot to focus on a particular player.
The tech industry has been betting that virtual and augmented reality will prove to be something of a “paradigm” shift in technology akin to the invention of the internet or the smartphone.
Some are calling it the technology’s “iPhone moment,” in reference to effect Apple’s now ubiquitous handset had on consumers and businesses globally.
Apple recently announced its first virtual and augmented reality headset, called the Vision Pro, while Meta unveiled its Quest 3 headset in June.
Improbable is taking a different route to companies like Apple, Meta, and Microsoft, which is behind the HoloLens mixed reality products.
For one, you won’t need a headset to enter an MSquared space, as the software will be desktop-based. The experience is also intended to be more decentralized and interoperable, with the ability to take content from one metaverse to another.
Founded in 2012, Improbable has for years been attempting to build vast, continuously rendering worlds in which thousands of people can play games and interact with each other.
The London-headquartered firm, one of Japanese tech investment giant SoftBank’s biggest bets in Britain, was founded by Cambridge computer science students Narula and Rob Whitehead with the ambition of developing large-scale computer simulations and “synthetic environments.”
Trucks travel through a flooded road while exiting from an Amazon delivery station in Carlstadt, New Jersey, U.S., on Tuesday, Oct. 13, 2020.
Bloomberg | Bloomberg | Getty Images
Amazonsaid Wednesday it plans to spend roughly $4 billion by the end of 2026 on expanding deliveries in rural towns as part of a push to bring faster shipping times to more parts of the U.S.
Once the expansion is complete, more than 200 delivery stations will be added, tripling the size of Amazon’s rural delivery network, the company said. The move will bring products closer to customers, and cut average delivery times “in half,” Amazon added.
“At a time where many logistics providers are backing away from serving rural customers because of cost to serve, we are stepping up our investment to make their lives easier and better,” Udit Madan, Amazon’s senior vice president of worldwide operations, said in a statement.
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When the new facilities are open, Amazon said it aims to create about 170 jobs at each site.
Amazon has been working to speed up deliveries for the past several years. After making two-day delivery the standard, the company has invested in shuttling packages to shoppers’ doors in one day, or in some cases, within a few hours.
It’s been able to do this by building up a massive network of warehouses across the country, as well as by bringing more of its logistics operations in house. In 2022, Amazon said it was poised to pass UPS and FedEx to become the largest U.S. package delivery service.
The company still relies on carriers, including the U.S. Postal Service, for a portion of its deliveries, but it’s handling a significant share via its delivery service partner program, which is made up of thousands of contracted third-party delivery companies, as well as legions of Flex gig workers. Amazon has also recently expanded another program, launched in 2023, that enlists mom-and-pop shops in rural towns to make deliveries on the company’s behalf.
The announcement comes as Amazon is set to report first-quarter earnings after the bell on Thursday. It’s also landing one day after Amazon drew the ire of the White House for reportedly planning to display how much of an item’s cost is due to tariffs. Amazon said the plan was “not going to happen” and it had only considered such a move for products on its discount storefront, called Haul.
Meta CEO Mark Zuckerberg tries on Orion AR glasses at the Meta Connect annual event at the company’s headquarters in Menlo Park, California, U.S., September 25, 2024. REUTERS/Manuel Orbegozo
Manuel Orbegozo | Reuters
Meta is continuing to sink billions of dollars a quarter into the metaverse.
In its first-quarter earnings report on Wednesday, Meta said its Reality Labs unit recorded an operating loss of $4.2 billion in the period while bringing in $412 million in sales. Analysts were projecting an operating loss of $4.6 billion on revenue of $492.7 million.
Meta’s Reality Labs unit is responsible for the company’s Quest-branded virtual reality headsets and Ray-Ban Meta Smart Glasses. It’s the key business unit that anchors CEO Mark Zuckerberg’s plans to build a new computing platform involving digital worlds accessible via VR and augmented reality devices.
Reality Labs has reported cumulative losses of more than $60 billion since late 2020, including a loss of $3.85 billion in the first quarter of last year. In late 2021, Zuckerberg changed the name of his company from Facebook to Meta.
Wall Street has questioned Meta’s big spending on the metaverse, which Zuckerberg has said could take many years to turn into a real business. The company must now also contend with sweeping new tariffs from President Donald Trump and the likely increase in costs that will follow, potentially leading to higher-priced devices.
Last week, Meta said that an unspecified number of Reality Labs employees were laid off. Those workers were part of the Oculus Studios unit, which creates VR and AR games and content for Quest VR headsets.
“Some teams within Oculus Studios are undergoing shifts in structure and roles that have impacted team size,” a Meta spokesperson said in a statement about the cuts. “These changes are meant to help Studios work more efficiently on future mixed reality experiences for our growing audience, while still delivering great content for people today.”
Qualcomm CEO Cristiano Amon responds to a question during a keynote conversation at CES 2024, an annual consumer electronics trade show, in Las Vegas, Nevada, on Jan. 10, 2024.
Steve Marcus | Reuters
Qualcomm reported fiscal second-quarter earnings on Wednesday that topped Wall Street expectations as the company’s chip sales showed strong year-over-year growth.
Qualcomm shares fell in extended trading as the company’s revenue forecast for the current quarter was slightly lighter than expectations.
Here’s how the chipmaker did compared to Wall Street expectations, based on a survey of analysts by LSEG:
Earnings per share: $2.85 adjusted vs. $2.82 expected
Revenue: $10.84 billion adjusted vs. $10.66 billion expected
In the current quarter, Qualcomm said it expected $2.70 at the midpoint in adjusted earnings per share on $10.3 billion in revenue at the midpoint. Analysts polled by LSEG were looking for $2.67 in adjusted earnings on $10.35 billion in sales in the current quarter.
Net income during the quarter ending in March was $2.81 billion, or $2.52 per share, compared to $2.33 billion, or $2.06 per share, in the year-ago period. Qualcomm’s adjusted results include exclusions for acquisition-related charges, interest expenses, and share compensation.
Qualcomm’s most important business is selling chips such as modems and processors for smartphones, including high-end devices made by Samsung and Apple. Its overall handset chip sales increased 12% on an annual basis to $6.93 billion. Qualcomm’s overall adjusted revenue in the quarter rose 15%.
But under CEO Cristiano Amon, the company has been working to sell more chips for cars, reported as its automotive business, and more chips for other gadgets such as Meta’s Quest virtual reality headsets, as well as Windows PCs, under its Internet of Things business. Growth in those categories signals how well the company is diversifying away from its core handset business, which expects to lose Apple as a customer in the coming years.
Qualcomm said that its automotive business grew a 59% on an annual basis, to $959 million in sales. Its internet of things business rose 27% to $1.58 billion in revenue.
All together, Qualcomm’s business selling chips, called QCT, rose 18% on an annual basis to $9.47 billion in revenue during the quarter.
Qualcomm’s other major division is QTL, which is a profitable division that collects licensing fees from technology that Qualcomm developed and patented. QTL revenue was flat year-over-year at $1.32 billion.
Qualcomm is exposed to tariffs, export controls and shifts in demand because it designs and ships physical hardware. Amon said in a statement that Qualcomm was navigating the “current macroeconomic and trade environment.”
The company said it spent $2.7 billion on capital return during the quarter, including $1.7 billion in share repurchases and $938 million in dividends.