Earlier last week, Facebook (FB) announced its second quarter results that surpassed all market expectations. Facebook appears to want to pivot from being known as the social media powerhouse to a provider of a virtual environment over the next few years.

Facebook’s Financials

Facebook’s Q2 revenues grew 56% over the year to $29.1 billion, ahead of the market’s estimates of $23.71 billion. The increase in revenue was attributed to a 30% year increase in the average price per ad and a 12% increase in the number of ads delivered on its platform. 

Adjusted EPS surpassed the expectations and came in at $3.61 against the market’s forecast of $2.34. Advertising revenues grew 56% to $28.6 billion and other revenues grew 36% to $497 million.

Daily active user (DAU) numbers for the core Facebook app grew 7% over the year to 1.91 billion and monthly active users (MAU) grew 7% to 2.9 billion. The number of people active on any one of its family of products, that includes WhatsApp and Instagram, grew 12% to 3.51 billion people per month in the quarter. Daily active users on these applications came in at 2.76 billion.

Facebook’s Metaverse

The big news from Facebook was the announcement of its plans to create a “metaverse,” a virtual environment inhabited by multiple people at once. The metaverse will help integrate Facebook’s moonshot efforts with its core business. It is a version of the web that will feel more like an MMO (massively-multiplayer online game) than a collection of web pages.

Facebook believes that while mobile is the platform of today, there is much more in the world of tomorrow. It believes that the metaverse is the future environment, and it will allow it to leverage solutions like Oculus that will completely evolve the way people work, play, and communicate.

Metaverse is not a new concept. Gaming company Roblox (RBLX) has been building this environment for a while. Roblox is a social world where users can jump between virtual experiences while creating their own experiences inside it. Its vision has been well received by both the consumers and the stock market. Roblox is currently trading at a $45 billion market capitalization, making it one of the biggest gaming players in the West.

Facebook has already invested heavily in the tools for metaverse. Oculus was a $2 billion acquisition that it made a few years ago. More recently, Facebook acquired Unit 2 Games, the maker of Crayta, a collaborative gaming platform. Founded in 2017, Unit 2 Games is a game creation and sharing platform that allows players with little or no experience of game development to create customized versions of their games and share these games with each other.

Facebook plans to leverage the acquisition to make game creation more accessible and easy to use. It will integrate Crayta’s creation toolset into Facebook Gaming’s cloud platform to instantly deliver new experiences. Terms of the acquisition were not disclosed. Prior to the acquisition, Crayta had raised $5 million in funding from Makers Fund.

Facebook is banking on this investment in AR and VR tools to help transform it from a social media platform to a metaverse provider over the next few years. Its stock has been trading at around $354.40 with a market capitalization of $1.01 trillion. It hit a 52-week high of $377.52 in July and a 52-week low of $229.00 in September last year.