Meta announced its latest quarterly results, revealing that the company’s Reality Labs metaverse division is again reporting a loss of nearly $4 billion. The bright side? Meta’s still investing billions into XR, and it’s not showing any signs of stopping.

Meta revealed in its Q1 2023 financial results that its family of apps is now being used by over 3 billion people, an increase of 5% year-over-year, but its metaverse investments are still operating at heavy losses.

Reality Labs is responsible for R&D for its most forward-looking projects, including the Quest virtual reality headset platform, and its work in augmented reality and artificial intelligence. Meta CEO Mark Zuckerberg has warned shareholders in the past that Meta’s XR investments may not flourish until 2030.

Here’s a look at the related income losses and revenue for Reality Labs since it was formed as a distinct entity in Q4 2020:

Image created by Road to VR using data courtesy Meta

Meta reports Reality Labs generated $339 million in revenue during its first quarter of the year, a small fraction of the company’s 28.65 billion quarterly revenue. The bulk of that was generated from its family of apps—Facebook, Messenger, Instagram, and WhatsApp.

While the $3.99 billion loss may show the company is tightening its belt in contrast to Q4 2022, which was at an eye-watering $4.28 billion, Meta says we should still expect those losses to continue to increase year-over-year in 2023.

This follows the company’s second big round of layoffs, the most recent of which this month has affected VR teams at Reality Labs, Downpour Interactive (Onward) and Ready at Dawn (Lone Echo, Echo VR). The company says a third round is due to come in May, which will affect the company’s business groups.

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Dubbed by Zuckerberg as the company’s “year of efficiency,” the Meta founder and chief said this during the earning call regarding the company’s layoffs:

“This has been a difficult process. But after this is done, I think we’re going to have a much more stable environment for our employees. For the rest of the year, I expect us to focus on improving our distributed work model, delivering AI tools to improve productivity, and removing unnecessary processes across the company.”

Beyond its investment in AI, Zuckerberg says the recent characterization claiming the company has somehow moved away from focusing on the metaverse is “not accurate.”

“We’ve been focusing on both AI and the metaverse for years now, and we will continue to focus on both,” Zuckerberg says, noting that breakthroughs in both areas are essentially shared, such as computer vision, procedurally generated virtual worlds, and its work on AR glasses.

Notably, Zuckerberg says the number of titles in the Quest store with at least $25 million in revenue has doubled since last year, with more than half of Quest daily actives now spend more than an hour using their device.

The company previously confirmed a Quest 3 headset is set to release this year, which is said to be slightly pricier than the $400 Quest 2 headset with features “designed to appeal to VR enthusiasts.”

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Well before the first modern XR products hit the market, Scott recognized the potential of the technology and set out to understand and document its growth. He has been professionally reporting on the space for nearly a decade as Editor at Road to VR, authoring more than 3,500 articles on the topic. Scott brings that seasoned insight to his reporting from major industry events across the globe.
  • ViRGiN

    That’s nothing! I just found a rare vintage article from february of 2021 in Kawishana language where Valve employees were visiting local hospital and they reassured they are working on multiple VR products! How did that fly under everyones radar!?

    • LMAO

      Ignorant troll alert!

      • ViRGiN

        Anti-META basement dweller alert!

    • Ookami

      I bet you’re the kind of person who obsesses over an ex for years, looking at their Socials, gossiping about their partners, all while saying “I couldn’t care less!”
      IDK, just a random assumption. I could be wrong, or maybe not.

      • ViRGiN

        nice projecting, made me chuckle. retard.

        • Ookami

          So close. If you didn’t add “retard” at the end then it really would’ve seemed like my comment didn’t bother you. Your “I couldn’t care less” act just needs a bit more work to be convincing. But don’t worry I’m sure you can do it!

      • xyzs

        He probably spies on girls he never had the balls to talk to… He’s total loner irl.

  • Till Eulenspiegel

    At this stage, Meta is trying to save face by burning more money. They have changed their name to Meta – by dumping Metaverse it would be humiliating.

    Zucky is reported to shift focus to AI now – it’s his new toy. Soon he will tell the world that Meta means metamorphosis.

    • Yenazo

      I don’t think so. What are you saying is the same people said when Internet was born. IF you lived 80s then you know what I mean. But now Metaverse is like old BBSs.