Facebook’s parent company, Meta, made a lot of money in its last financial quarter. However, its virtual reality and augmented reality division, Reality Labs, lost over $3 billion. That means that since June 2022, the metaverse-focused division has lost a billion dollars per month, and Meta expects to continue losing billions on VR.
As reported by MSNBC, in its first-quarter earnings report released on Wednesday, Meta disclosed that Reality Labs had lost $3.85 billion. This is the division of Meta responsible for creating the popular Quest 2 VR gaming headset and the less popular and pricier Quest 3. It also works on metaverse projects, helping create the coldest and most boring digital world I’ve ever had the misfortune to explore. Another part of Reality Labs is high-end VR, as well as augmented reality tech. And none of this stuff is turning a profit for Meta and it never has.
Since 2020, when Meta started reporting its Reality Labs losses separately, the division has never been profitable. With only one exception, every quarter since 2020 has seen Reality Labs cost Meta $2 billion. In fact, since June 2022, Meta has lost about a billion dollars every month developing, marketing, and selling VR and AR products. Add it all up and Meta has lost over $45 billion trying to make VR a thing.
In a press release announcing its Q1 2024 financial report, Meta made it clear that it not only expects to keep losing money on VR, but that these losses will grow, saying: “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.”
With all this money burned on virtual reality, you’d expect to look around and see everyone wearing VR headsets, hopping into the metaverse, and working inside it. [Looks around]. Nope. VR sales are down among consumers, companies aren’t investing in the VR workplace future that Meta pushed, and even Apple’s expensive AR headset seems to be flopping.
We can spend hours explaining various reasons why VR hasn’t taken off, even after one of the largest companies in the world invested over $40 billion into it, but there’s an easier answer: People don’t want VR.
Sure, maybe some people like it. Hell, I own a headset and have enjoyed it from time to time. But it’s clear that VR and the metaverse just aren’t a thing that your average person, working a grueling job and trying to keep food on the table, gives a shit about. Even Meta and other tech companies know this, hence their pivot to AI after the metaverse crashed and burned. Yet, Zuckerberg has large stacks of cash to burn and seems more than willing to keep tossing into the fire that is virtual reality. Maybe we’ll get one more affordable headset out of Meta before it gives up on VR. One can hope.
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