In its quarterly financial results today, Meta revealed that its Reality Lab division saw its best ever Q4 revenue but, as before, this coincides with equally growing costs.

Meta’s Reality Labs division houses its metaverse and XR groups, and some of its AI initiatives.

During its Q4 2024 earnings call, Meta revealed that Reality Labs reached a record $1.08 billion in quarterly revenue, but also had its biggest quarter in terms of costs at $6.05 billion, resulting in a quarterly loss of $4.97 billion. This just barely beats the division’s previous revenue record of $1.07 billion in Q4 2023, and significantly beats it’s largest quarter for costs of operation in Q4 2023 at $5.72 billion.

During the company’s Q4 2024 investor earnings call, CEO Mark Zuckerberg said that the “number of people using Quest and Horizon [Worlds] has been steadily growing,” and also that he believes 2025 is the year the company’s investments in improving the look and feel of Horizon Worlds will begin to pay off.

Regarding Q4 2024, however, Zuckerberg alluded to Meta’s Ray-Ban smartglasses as the main driver of the revenue milestone, saying that “Meta Ray-Ban are a real hit.”

But revenue is only half of the story, as Reality Labs’ growth in costs have far exceeded its growth in revenue. In Q4 2024, the division cost the company $6.05 billion to run. When offset by its revenue, that still puts the Reality Labs $4.97 billion in the red for Q4 2024.

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To date, Meta has spent a whopping $69 billion on Reality Lab since Q4 2020, but it has only brought in $9.19 billion in the same period.

While the numbers are staggering, Zuckerberg continues to insist that Reality Labs costs are long-term investments that will eventually pay off; he’s previously warned investors that Reality Labs’ costs would continue to grow, and ultimately might not flourish until the 2030s.

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Ben is the world's most senior professional analyst solely dedicated to the XR industry, having founded Road to VR in 2011—a year before the Oculus Kickstarter sparked a resurgence that led to the modern XR landscape. He has authored more than 3,000 articles chronicling the evolution of the XR industry over more than a decade. With that unique perspective, Ben has been consistently recognized as one of the most influential voices in XR, giving keynotes and joining panel and podcast discussions at key industry events. He is a self-described "journalist and analyst, not evangelist."
  • ApocalypseShadow

    It's great that they're investing in AR and VR as it pushes the medium forward. But let's be real, Sony, Valve and many other companies, aren't willing to have anywhere near 60 billion in losses. Must be nice to be able to burn that much money. This is almost Activision buying money when Microsoft purchased the publisher to try to beat Sony on console. And they are still getting their butt kicked to the point that they have to publish games on Sony's and Nintendo's platforms to recoup losses. Not related to Quest but that's a lot of money. And we still don't know how many headsets are being used consistently to spend that much money.

    Will definitely be interesting to see how much money Samsung, Google and Apple are willing to throw away to gain market share in the XR market.

    • Dragon Marble

      You would think readers of this website wouldn't need this basic fact check anymore, but here we go again. Meta's XR investments are much, much more than just games. That $60 billion loss doesn't have much to do with Quest at all — even though it is probably the biggest revenue source in Reality Labs.

      Sony and Valve are not developing AR glasses, or growing new materials in their basements, or rolling out prototypes costing $10,000 each to produce.

      People willfully ignore all of those when they try to use the losses Reality Labs post to paint a picture of a struggling Quest platform.

      • Herbert Werters

        Yes, it's not about the XR investments at all, but about the profits. They are stagnating even with rising user numbers. Something is wrong. More users = more revenues. Or does it?

        • Dragon Marble

          It appears to be stagnating due to the Covid distortion. I consider 2021 and 2022 at the tail of the Covid wave. The 2023-2024 growth is more indicative of the future.

    • Nostrildumbass

      People seem to forget that the console manufacturers you mentioned nearly always take a loss on their new consoles for some years to come, and rely on royalties from accessories and games until the consoles become cheaper to produce with time. Said consoles/games aren't these companies' only source of revenue; no different from Meta.

  • Peter vasseur

    Fake zombie company. No company would survive on its own with those numbers. Completely funded by his other companies.

    • VrSuCkErS

      Could be worse than that, could be completely funded by self-purchasing bots. The millions of users could really be Meta-zombies and they would still have lots of money left over to spend on crack-ho's. Just look at the proportion of green to red in the graph!

  • Herbert Werters

    Every year, the Quest ecosystem grows by around 8 million additional new users and generates the same revenue every year? That's anything but good. Someone explain that to me?

    • brandon9271

      Maybe most of those 8 million people are using their Meta devices for PCVR (or porn..?) Meta is in the situation where their user base can grow and it doesn't necessarily mean anyone will buy software from them. I've had a quest 2 for years and I almost exclusively use it for PCVR. The only game I bought from Meta is Beat Saber. If latency wasn't an issue I would have just played it on PCVR as well

      • Herbert Werters

        The same for me. But I think the majority only play mobile VR. But in principle, it doesn't matter if you buy from Steam. People don't buy on the Quest. Sales have stagnated at the same level for four years despite increasing Quest hardware sales. It seems that hardly anyone questions this and what is reported by Meta is simply celebrated, even though there isn't much to celebrate, just because they pretend it's great.

    • disqus_o4N8KCTF90

      I do wonder if they are going to alienate a lot of users with the number of headsets they release.

      Just before the release of quest 3 there was a big sale on quest 2 which saw a lot of new users purchase the quest.

      I can imagine many people being very disappointed when they realise the best games like Batman don’t run on their quest 2.

      Now we have the quest 3 and 3S selling very well, but next year we will have a quest 4. You can guarantee that there will be quest 4 only games as new quest 4 owners will want software that makes the most of their new tech.

      Once again quest 3 and 3S owners who may have only had their machine for a short time will find they can’t run the best games.

      Personally I think a new standalone headset nearly every two years is just too much and really Meta should be pushing developers to produce the best software to push the current devices.

      Just an opinion of course but would be interested to hear other people’s thoughts?

      • Herbert Werters

        Meta just didn't understand why a new console generation comes onto the market every 6-8 years. Console users don't want to keep buying new hardware. They spend some money once and don't have to worry about it for many years. Meta didn't understand that. Consoles are about the games, not the hardware. Meta should concentrate on bringing more high quality games to the platform rather than constantly developing new hardware and opening up the store to all the garbage.

    • Nostrildumbass

      Plenty of buyers don't continue to buy their games through Meta and instead go to Steam (myself included)

      • Herbert Werters

        I am also one of the supposedly few who do this.

    • namekuseijin

      33.8 million users

      Lol Meta is lucky if 5 million are still active… headsets long resold, forgotten and dusty, or broken is more likely…

      1 million tried Batman, only actual 300k got past the extended tutorial area… 300k is around how many gamers actually play for real in the platform, and that's a high number, most other games barely reach a tenth of those players…

      most users of Quest either play on pc or are casual gamers mostly into social playgrounds or fitness…

      • Dragon Marble

        10% of players have completed Batman. It's not bad at all considering it's new, free, and motion-sickness prone.

        For comparison, only 20% of players completed HL-Alyx.

        • namekuseijin

          yeah, sadly VR has lots of casual gamers

  • Sven Viking

    Many developers are reporting falling sales, theorised to be related to the platform’s shift to focus on free (and, in at least some cases, awful) Horizon Worlds content over paid apps.

    • Herbert Werters

      I can imagine that very well. This could really become a big problem.

      • Arno van Wingerde

        Not with the current quality of the Worlds…. unless people get turned off from VR becasue of the awful experience.

        • Nostrildumbass

          People need to stop assuming all the slop (mainly Horizon and all the low quality free crap) is all VR has to offer. If people would try some of the more notable games (Arizona Sunshine, Saints and Sinners, Lone Echo, Half Life Alyx of course) they would see the potential and support some of these companies more, encouraging further quality development).

          • Herbert Werters

            The problem is that the platform is full of garbage and the good stuff gets flushed away.

    • Nostrildumbass

      It doesn't help that some of "the good ones" sell their souls to Facebook/Meta (Downpour, Ready At Dawn, Beat Games, Sanzaru, Big Box, Twisted Pixel, Armature) and we all know how that eventually turns out. It sucks and I get it; it's a lot of money for these small "indie" developers to turn down. The thing is "business-first" mentality kills these studios. I hold the stance that these game studios need to stay modest and not sell themselves out for the money if they really love their game and have a future vision for it. If the goal is a one-off cash grab that you cna live the rest of your life with, it's understandable why so many of them sell themselves out.

  • Andrew Jakobs

    I wonder what all the costs are for a 6 billionsl losses.

    • Nostrildumbass

      A lot of marketing, a lot of development. Many six figure hardware and software engineers.

  • When you seel under cost devices, the more you sell, the more you lose…

    • Herbert Werters

      The devices are not sold below cost price. They are sold at a very low margin. The profits will be very small but Meta will not make a loss.