Meta reported a fourth-quarter operating loss of $4.65 billion for its metaverse segment, Reality Labs, exceeding the predicted $4.26 billion estimated by analysts.
The metaverse sector has been experiencing financial setbacks since 2020, accumulating a total loss exceeding $42 billion. Anticipating a substantial year-over-year rise in operating losses, Meta attributes this to sustained capital investment in AR/VR product innovation and ecosystem expansion.
On a positive note, Reality Labs recorded a Q4 revenue of over $1 billion, marking a 37% increase from the corresponding period the previous year. Surprisingly, this quarterly revenue surpassed financial analysts’ projections of $768.2 million for Q4.
In the fall, Meta introduced the Quest 3 VR headset, solidifying Reality Labs’ position as a leader in advancing virtual and augmented reality technologies, contributing significantly to the metaverse — an idea championed by Mark Zuckerberg, Meta’s founder and CEO, as the next major development and the future of mobile internet.
The current strategic focus for Meta revolves around the Quest line of VR headsets. As Meta intensifies its investment in the metaverse, Apple enters the arena with its debut headset, the Vision Pro, priced at $3,500 — noticeably more expensive than Meta’s Quest 3 VR headset, starting at $500.
In 2023, the VR and AR headsets and glasses market contracted by almost 40%, reaching $664 million by November 25. Circana Research posits that this decline may be attributed to the absence of new standalone VR headsets in the market.
