Business

Meta continues to lose billions of dollars in its quest to lead AR-VR market

As Meta continues to bet big on gaming, it has on its augmented reality/virtual reality (AR-VR) division

April 27, 2024

Facebook parent Meta loses another $3.8 billion on VR/AR

The Mark Zuckerberg-run Meta‘s Reality Labs – the Facebook parent company’s business and research unit that develops virtual reality (VR) and augmented reality (AR) hardware and software, lost close to $4 billion.

The unit has been reporting billions of dollars in losses every quarter, and the first quarter of 2024 (Q1 2024) is no different – as the department recorded over $3 billion in losses.

The company is losing money at a rate of more than $1 billion per month since June 2022 on its AR/VR dream, according to GamesIndustry.biz.

According to the numbers revealed by Meta in its quarterly results, the Reality Labs division registered a $3.85 billion operating loss – down from $4.65 billion that the company lost in Q4 2023.

“We continue to expect operating losses to increase meaningfully year-over-year due to our ongoing product development efforts and our investments to further scale our ecosystem,” according to the company.

Meta CFO Susan Li said on the Q1 earnings call that “We continue to expect operating losses to increase meaningfully year-over-year”.

Meta’s Reality Labs recorded $440 million in revenue but an overall loss of $3.85 billion. Meta captured 59 percent of the Extended Reality (XR) headset market in 2023.

“The initial signs are quite positive here. But building the leading AI will also be a larger undertaking than the other experiences we’ve added to our apps, and this is likely going to take several years,” said Zuckerberg.

Notably, Meta strategically lowered the price of its existing Quest 2 throughout the year, making it an attractive option for budget-conscious consumers, especially during the holiday season, according to Counterpoint Research.

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