• The Federal Trade Commission (FTC) has filed a motion for a preliminary injunction to block Meta’s proposed acquisition of Within, a virtual reality studio known for its VR fitness app, Supernatural. The deal, which was announced in October 2021, was reportedly priced at over USD 400 million and had caught the attention of the FTC due to its anti-competitive nature. This also suggests that future acquisitions will be closely monitored and scrutinized. 

• The FTC aims to restrict anti-competitive practices and fuel innovation in the VR space. This was also backed by the fact that Meta already owns the fitness-based VR game Beat Saber, among other VR apps and game studios including Big Box VR, Ready At Dawn, and Sanzaru Games. 

<ul><li> Analyst QuickTake : The lawsuit is ill-timed for Meta, as the R&D spending on VR and the metaverse are negatively affecting its bottom line. Meta Reality Labs, its VR and metaverse division, generated USD 452 million in Q2 revenue but reported an operating loss of USD 2.8 billion (vs a loss of USD 2.4 billion a year ago). Meta announced earlier this week that it would be increasing the prices of its Meta Quest 2 VR headsets by USD 100.</ul>