Meta spent $4.3 billion on its VR division in three months, and made *checks figures* $440 million in return

HardwareVR HardwareMeta spent $4.3 billion on its VR division in three months, and made checks figures $440 million in returnWhen you purchase through links on our site, we may earn an affiliate commission.Here’s how it works.

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(Image credit: Future)

Meta Quest 3 headset on my head.

VR is sometimes dismissed as a fad, with some seemingly desperate to ring the death knell on virtual reality and its associated hardware at the earliest opportunity. While we’re not so convinced, the latest financial report from Meta shows staggering expenses in regards to its VR headset and augmented reality division that are difficult to ignore.

Meta’s first quarter results of 2024reveal that Reality Labs, the company’s business and research unit that develops and produces VR headsets like theMeta Quest 3, made $440 million, a 30% increase attributed to Quest headset sales. Reality Labs' expenses, however, were an eye-watering $4.3 billion.

Still, that leaves Reality Labs with an operating loss of $3.8 billion, which is hardly the sort of small change you wouldn’t mind losing down the back of the sofa.

Those of you with a good memory will also remember that this isn’t the first time Meta’s Reality Labs has suffered financially, as last year it was reported thatit spent $4.279 billion in the last financial quarter of 2022.

Despite owning a VR division that seems to be bleeding money, Meta CEO Mark Zuckerberg has recently vowed to increase spending overall at Meta to turn it into “the leading AI company in the world” (viaThe Financial Times), which seems to have spooked investors and caused a 12% loss in share value in wake of his statements.

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Well, AI hardware is expensive after all, with those H100 GPUs estimated to cost between $20,000 to $40,000 per unit.

Still, when it comes to VR, all these heavy costs might eventually start to balance out. According to a tweet from tech investor Jack Soslow, a16z Games—a company that raises investment funds for games industry founders, so prepare your appropriate dose of salt—the Meta Quest line has sold more than you might think.

The VR market is larger than perceived:- Meta alone sells ~10m headsets annually, comparable to Xbox.- The Meta Quest 2 is the top selling console on Amazon.- Meta Quest store has generated >$2b in rev or >$500m annually, comparable to UGC payouts. pic.twitter.com/6QmB57KzCPApril 25, 2024
The VR market is larger than perceived:- Meta alone sells ~10m headsets annually, comparable to Xbox.- The Meta Quest 2 is the top selling console on Amazon.- Meta Quest store has generated >$2b in rev or >$500m annually, comparable to UGC payouts. pic.twitter.com/6QmB57KzCPApril 25, 2024

Virtual reality(Image credit: Valve)Best VR headset: which kit should you choose?Best graphics card: you need serious GPU power for VRBest gaming laptop: don’t get tied to your desktop in VR

Virtual reality

(Image credit: Valve)Best VR headset: which kit should you choose?Best graphics card: you need serious GPU power for VRBest gaming laptop: don’t get tied to your desktop in VR

(Image credit: Valve)

Best VR headset: which kit should you choose?Best graphics card: you need serious GPU power for VRBest gaming laptop: don’t get tied to your desktop in VR

Mmm, briny. Anyway, whether this proves to be an indicator of an eventual stratospheric rise of VR headsets into the heady heights of immense profitability, remains to be seen. For now, it seems to be something of an expensive bet, although time will tell whether all this immense spending eventually pays off.

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