Over the past four years, Reality Labs, the division of Meta responsible for developing virtual reality (VR) and augmented reality (AR) technologies, has reported losses totaling $58 billion. Despite some success with the Orion virtual reality glasses launched in September, the social media giant Meta continues to rack up billions in losses each quarter in its metaverse ventures, a technology still in its early stages.
Recently, Meta announced its third-quarter financial results, revealing that Reality Labs reported a loss of $4.4 billion, slightly better than the $4.68 billion loss analysts had predicted. While Reality Labs’ revenue grew by 29% year-on-year, reaching $270 million, it still fell short of analysts’ expectations of $310.4 million. Initially, Reality Labs generated revenue primarily through the sale of Quest VR headsets and smart glasses developed in partnership with Ray-Ban.
Mark Zuckerberg and Meta began investing in the virtual reality market back in 2014 when the company was still called Facebook, acquiring the startup Oculus for $2 billion. Zuckerberg believes that developing VR and AR technology could help Meta become the leader in the next major personal computing platform.
This investment has proven to be costly for Meta. Since 2020, Reality Labs has accumulated over $58 billion in losses. However, Zuckerberg’s presentation of the Orion AR glasses at the company’s Connect conference in September generated excitement and raised spirits within Meta regarding their ambitious plans. Meta hopes to build on the unexpected success of the Ray-Ban Meta smart glasses and introduce the AR Orion glasses to consumers after inviting developers to create apps for the device next year.
In the same month, Meta also released its latest VR headset, the Quest 3S, priced at $299 to offer consumers a more affordable way to experience VR. This is a cheaper alternative to the Quest 3, which was launched last year with a starting price of $499. However, with substantial losses and ongoing development challenges, Zuckerberg’s “bet of the century” remains at risk of falling apart.
