Mark Zuckerberg, CEO of Meta Platforms Inc., wears Orion augmented reality glasses during the Meta Connect event in Menlo Park, California, on Sept. 25, 2024.
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Meta continues to lose billions of Dollars developing the virtual reality and augmented reality technologies needed to underpin the nascent metaverse.
The social media giant reported fourth-quarter earnings Wednesday and said its Reality Labs unit recorded an operating loss of $4.97 billion while generating $1.1 billion in sales. Analysts were projecting that unit to log a fourth-quarter operating loss of $5.4 billion on $1.1 billion in sales.
Reality Labs is Meta’s unit that makes the Quest family of virtual-reality headsets and Ray-Ban Meta smart glasses.
Meta CEO Mark Zuckerberg kickstarted his company’s VR endeavors in 2014 when it acquired the startup Oculus for $2 billion. Since then, Zuckerberg has characterized VR and augmented reality as central to his plans to develop the futuristic digital world known as the metaverse, which he has said represent the next major computing platform.
Wall Street has questioned Zuckerberg’s metaverse investment. Reality Labs has tallied an operating loss of over $60 billion since 2020, as of Meta’s fourth-quarter earnings report.
Meta last week said it would invest between $60 billion and $65 billion in 2025 capital expenditures to expand its computing infrastructure related to artificial intelligence. Zuckerberg has previously said that AI is core to the company’s metaverse efforts, including its Ray-Ban Meta smart glasses. Meta develops that device with France-based EssilorLuxottica.
The social media company last year also unveiled its Orion prototype AR headset that is capable of overlaying digital objects on top of a person’s real field of view.
Meta released its latest VR headset, the $299 Quest 3S, during its September Connect event and pitched the device as a way for people to watch movies, play games and workout in VR.
Other tech companies are also investing in VR and AR.
Apple’s Vision Pro headset went on sale in the U.S. in Feb. 2024 with a starting price of $3,499, and in December, Google and Samsung said they were working on a VR and AR device dubbed Project Moohan that will be available to buy in 2025 for an undisclosed price.
Watch: Big tech earnings: Microsoft and Meta come into focus.
