Despite the production of one of the best VR headsets, Quest 3, Meta’s Reality Labs division is not making any money. In 2023, the division earned $2 billion in revenue, but expenses reached $18 billion. This was reported by PC Gamer.

Meta acquired virtual reality headset maker Oculus VR in 2014 for $2 billion. At the time, Oculus VR had just released its first product, the Oculus Rift.

By 2020, the company had fully integrated Oculus VR into its structures and renamed the division Reality Labs. The next headset, Oculus Quest 2 (now known as Meta Quest 2), proved to be a success, generating about $1 billion in annual revenue.

However, in the same year, Reality Labs spent about $8 billion, resulting in an operating loss of $6.6 billion. This figure was even worse in 2021 ($10 billion in losses), 2022 ($10.1 billion in losses), and 2023 ($13.6 billion in losses). According to Yahoo Finance, in 2024, Meta has already lost between $8.4 and $8.8 billion.

Last year, Meta’s CFO warned in its second-quarter financial report that the company expects Reality Labs’ expenses to grow even more due to “ongoing product development efforts in augmented reality/virtual reality and investments to further scale our ecosystem.”

According to people familiar with the processes inside Meta, Reality Labs underwent reorganizations every 3-6 months. In addition, there were frequent cases of management misunderstanding the specifics of the department’s work and conflicts because of this.

Currently, Meta has four AR/VR products on the market – Quest 2, Quest 3, Quest Pro, and Ray-Ban Meta smartphones. However, the company is said to have developed 24 products in the past 18 months.

Meta also funded the development of its own headset chips, but decided to switch to Qualcomm products in 2021. Over the years, Meta has lost some key figures in the VR field, such as Oculus co-founder Nate Mitchell and legendary Doom and Quake developer John Carmack, who left in 2019.