Coming alongside the big Quest 3 info dump today at Connect 2023, Meta revealed that Quest Store games and apps have generated over $2 billion in revenue. While the store is still earning for developers, looking at revenue over time shows that things have cooled off over the last year.

Meta’s Head of Developer Relations Melissa Brown announced the figure on stage, further noting that 100+ new and upgraded titles are coming to the Quest Store before the year’s end, more than half of which will be brand new games and apps.

While $2 billion sounds like an impressive number—it certainly is for the XR industry at large—it pales in comparison to what Meta regularly spends on its Reality Labs division.

Quest 2 next to Quest 3 | Image courtesy Meta

Back in July, the company reported a quarterly loss just south of $4 billion in Q2 2023; Reality Labs’ revenue was down by 39% due to lower Quest 2 sales, making for the worst quarterly performance in the past two years.

With today’s announcement, it’s also clear at what rate content sales have cooled off since Quest 2 was launched in 2020. The company announced at Connect 2022 in October last year that it had topped $1.5 billion in Quest Store revenue, accounting for everything since the first Quest’s launch in 2019, meaning it’s only managed to generate $500 million in the past 12 months, putting a clear end to any kind of take-off ramp that might have appeared to be forming.

Moving forward, this will undoubtedly put more weight on Quest 3 to fill in where Quest 2 left off, as stockholders will no doubt expect the $500 headset to meet or beat its forebear’s relatively meteoric success. Quest 3 pack in much of the functionality of the $1,000 Quest Pro headset, including color passthrough sensors for mixed reality, and has a significantly sleeker profile and more powerful chipset than the now $300 Quest 2.

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Will that be enough for first-time VR users to jump in? Enough for Quest 2 users to upgrade? Whatever the case, Meta is undoubtedly subsidizing its XR hardware to make software sales more attractive. And if it doesn’t keep pumping out first-party titles like Asgard’s Wrath 2, they’ll need at least keep those multi-million-dollar success stories coming, like Gorilla Tag’s $26 million in revenue high-swinging success story, or the other 40 Quest games that Meta said had posted revenues over $10 million.

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Connect 2023 kicks off today, taking place September 27th and 28th at Meta’s Menlo Park headquarters. There’s been a ton of news already, so make sure to follow along by heading to our main page for all of the latest in Meta’s XR stuff.

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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 4,000 articles on the topic. Scott brings that seasoned insight to his reporting from major industry events across the globe.
  • ViRGiN

    It’s amazing achievement for just 4 years for brand new industry that can only be understood by actually using it.
    And they know they are playing the long game.

    Microsoft estimated Valve revenue in 2021 at $6.5 bln.
    It’s not hard to imagine that sooner than later, Meta will outperform all Valve sales.

    And I’m all here for it.

    • polysix

      God you’re such an embarrassing fanboy.

      • ViRGiN

        toxic psychiatric ward patient alert!!!

  • Richard R Garabedian

    have any vr games come out this year?…umm…i cant name any off the top of my head. I mean good vr games…not copies of copies of copies

    • shadow9d9

      All you have admitted is that you don’t follow vr news and reviews. I can name a handful off of the top of my head thar have gotten good reviews.

      • Richard R Garabedian

        i follow every vr news.. all of it. But if you cant name any either dont pretend you can

    • I’ll be honest Vertigo 2 was the only one that immediately jumped to mind for me. Took a gander at Steam VR releases this year just to see if anything jumped out at me and there are some notable ones (some of these are personally not my cup of tea, but were generally well received)

      -Vertigo 2 (just to reiterate, you should probs give this a go)
      -I Expect You to Die 3
      -Hellsweeper VR
      -Yupitergrad 2
      -Among Us VR
      -Tea For God (really cool experience)
      -Firmament (not well received but I liked it, lol)
      -Another Fisherman’s Tale
      -Amid Evil VR
      -Walking Dead S&S 2 (came to PC, late 2022 Quest release but it was a hot mess at launch)
      -Ghosts of Tabor
      -The Light Brigade

      Nothing earth shattering, but there was some fun to be had for sure.

    • Arno van Wingerde

      Simple… compare the top 20 games with that of a year ago… not much change, red matter2 and moss2 come to mind.

  • Christian Schildwaechter

    TL:DR: Oh shit, that is very bad news for all of VR

    This is really bad, no matter how you slice it. There haven’t been many recent large game releases that could have drawn in many new users, but we saw from the sales/review numbers of RE4 that these aren’t all that impactful anyway. With the number of Quest 2 out in the wild, we should still see a constantly growing user base and a constantly growing revenue.

    The WSJ leaked Meta internal numbers, showing 6.37mn monthly users in October 2022 for Quest 1+2. With ~17mn Quest 1/2 sold at that time, the user retention would be ≈ 37.5%. Retention should have gotten better over time, as the software improved and the number of games increased, but we also heard that newer Quest buyers were engaging less with the platform. The first wave of buyers most likely were already VR enthusiasts, buying way more apps and spending way more time with the device than those that followed later.

    So both retention and engagement may actually have dropped, the more regular users bought the Quest 2, as the core of enthusiasts doesn’t seem to grow all that much. But even if retention was only 25%, that should still lead to growing user base, not to a >30% drop in monthly revenue within a year. Within that year, we saw the Quest 2 price increase and the Quest Pro flop, so if the revenue was driven mostly by new users, a significant reduction in sales due to both price and the technology getting older would also drive down the revenue. But that would also indicate that even those 37.5% that do not stop using the Quest after a few months still stop or significantly limit buying apps for the Quest after some time, despite new releases getting better.

    A useful analysis isn’t possible based on so few data points, and there were a number of special circumstances that may both have inflated revenue at first (isolation during CoViD-19) and then reduced it (high prices in chip shortage), making conclusions even harder. But that revenue curve is just a disaster for anybody hoping for more AAA development. That would already have required an optimistic bet on the future as long as revenue seemed to only go up, and now looks more like a suicide mission.

    This is really, really bad, and I doubt that the Quest 3 will fix any of that. Offering improved specs at USD 500, it will again attract the enthusiasts, but I seriously doubt that it will be as popular as a Christmas gift for mostly US teens as the USD 300 Quest 2 was, esp. since now the PS5 and Xbox Series X are readily available at regular prices with an increasing catalogue. The Quest 2 still sold in parallel at USD 300 will have lost a lot of its attraction, and I doubt that replacing it in 2024 with a cost reduced version for USD 200 will really change that. Meaning that after the initial rush of people/enthusiasts upgrading to the Quest 3, there is quite a chance that hardware sales will not recover.

    Unless Meta all of a sudden comes up with some magic VR or MR killer app, I see no way how the Quest 3 could “meet or beat its forebear’s relatively meteoric success” at a 67% higher price. It will become even worse if the Apple Vision Pro turns out to be way too expensive, but actually very useful and usable due to the advanced UI, hinting into which direction XR should develop, with Meta’s HMD portfolio based on Quest 3/2/2lite lacking eye tracking basically being excluded from that development for several years.

    Meta not being able to establish a content market with at least slow, but consistent growth, despite spending billions on research, hardware, software, subsidies and more sends so many bad signals to other VR manufacturers, game developers and investors. It’s not going to kill VR, and Meta has the money and will to try for many more years, but it will slow VR development down even more than it already has been.

    • ApocalypseShadow

      I’ve speculated on it. Which is why they really need Quest 3 to see some growth beyond Quest 2 owners upgrading. They push out revenue numbers only showing a half picture without profit numbers. Sony also posted that PSVR 1 made over 2 billion in revenue. Difference was was that Sony made profit on the hardware day one, and made money on accessories, games and third party royalties. Facebook was losing billions just to try to control the stand alone platform. Did they ever make money or are they still taking losses?

      They can try and hide the truth with fluff and Snoop dog AI. But the reality is that no big games have come to the platform. PSVR got a lot of big games from Skyrim, Hitman, RE7, Borderlands, Batman, Iron Man, etc. PS VR 2 gets attacked for launching supposedly one game when Sony launched two with GT7 and Horizon. Facebook is launching one game and it’s not looking like a system selling game. PS VR 2 gets bashed for ports that made a lot of games a whole lot better looking and playing on PS VR 2 over PSVR. Quest 3 is getting a whole lot of ports and I hope the community is giving Facebook the same vitriol they gave Sony.

      Absolutely mediocre launch from internal and nothing released for the last year. They better do better with Quest 3 because Apple will run them over and never look back. Which is another thing. Facebook trying their best to be Apple but cheaper.

      • polysix

        Quest 3 won’t sell even half of what quest 2, mainly due to prices and also due to the focus on MR/AR over VR. People are just NOT that compelled with current tech to chase grainy AR.

        As a 7 HMD history and current quest pro user (for wireless PCVR only not standalone) I can say we’ll never have that influx again until quest 4, 5 or whatever can cut prices to the same as Q2 AND delivery compelling software with it.

        Sony had a shot with PSVR2 but blew it with bad hardware (MURA/Poor sweet spot/Price/Bad comfort.. returned mine).

        • I don’t know, I think things are going to be okay. Quest 2 got a surge from the Pandemic fallout that’s skewed perceptions.

          You wouldn’t know it based on the MR marketing BS, but the VR fundamentals are still here, better optics, higher resolution and FOV, more compact, better controllers, better processor. They’re apparently working on upper body tracking which would be big for VR gaming.

          Content across the board is still a big issue though.

        • ViRGiN

          God you’re such an embarrassing valve fanboy.

    • Completely agree on this analysis. And for me, Quest 3 won’t sell as well as Quest 2 because it costs much more and its added value is not clear for the average consumer (who has no idea of why he should need mixed reality)

  • Naruto Uzumaki

    The problem is the meta employs and leadership are very bad combine this with how super super hard vr is and its complete disaster but they will own 90 percent of the vr market for years

    • ViRGiN

      and i’m glad they will, since they are the only one shown to ever commit to anything.

  • Rogue Transfer

    For reference, in 2022, Valve is estimated to have generated around $13 billion in total. They had a big boon from the pandemic of course, like Meta did, so numbers for both are likely to receed from these historic levels for some time to come.

    For comparison, we have the Meta Quest store with $0.5 billion mentioned for 2022 in the article above. Still quite impressive for such a new platform.

    Investigating further shows that in the first four years of Valve’s Steam platform
    opening up to third party games, it is estimated to have made up to
    around $0.5 billion too – without any of their own hardware at that
    time(unlike Meta’s Quest platform).

    Though, of course, back then in 2008, the video gaming market was much, much smaller than todays!

    It will be interesting to see how the next year or two plays out for the Meta Quest store, now that its initial honeymoon period is over and it’s got a lot more competing items on it.