Photo Credit: Mark Zuckerberg
Meta continues to post huge losses from its Reality Labs unit, which is focused on the metaverse and virtual reality.
The company reported its Q4 2024 earnings on Wednesday and revealed Reality Labs recorded an operating loss of $4.97 billion while generating $1.1 billion in sales. While the loss is staggering, it’s still a smaller gap than what analysts projected with a loss of $5.4 billion on $1.1 billion in sales. Reality Labs is the unit responsible for the Meta Quest headset and the Ray-Ban Meta Smart Glasses collaboration.
Facebook acquired Oculus in 2014 for $2 billion to kick-start its VR push after Oculus ran a successful Kickstarter campaign seeking backers. Zuckerberg has said that AR and VR are central to his plans to develop futuristic digital worlds—which the CEO sees as the next frontier in computing. It’s worth noting that digital worlds like Second Life have been around for more than 20 years and have not achieved widespread adoption.
The Q4 2024 loss posted by Reality Labs is the biggest yet since Meta began reporting Reality Labs as its own segment in Q4 2020. Since then, Meta has lost at least $2 billion a quarter, with losses accelerating in 2023 and 2024. Here’s a quick peek at the losses as collated by CNBC. The total losses since 2020 have amounted to more than $60 billion.
Photo Credit: CNBC
Meta informed investors it would continue to invest between $60 billion and $65 billion in 2025 capital expenditures to expand its computing infrastructure for artificial intelligence. Zuckerberg says AI is core to the company’s metaverse efforts. New rumors from Bloomberg’s Mark Gurman suggest Zuckerberg and team may be working on a follow up to the flop that was the Meta Quest Pro.
The Reality Labs team is working on a follow up Meta Quest 4, but also on a newer high-end model possibly meant to rival the Apple Vision Pro headset. Current projections put the Meta Quest 4 releasing sometime in 2026.