A decade after buying Oculus VR, Meta's Reality Labs' losses are spiralling out of control, with no end in sight

Despite producing one of the best VR headsets around, the Quest 3, Meta's Reality Labs division just isn't making any money. Nearly $2 billion of revenue in 2023 was completely swallowed by $18 billion of expenditure, leaving Mark Zuckerberg's dream of the metaverse facing a loss of $16 billion. And the CEO has said that the losses will continue to worsen for the foreseeable future.

Meta's virtual reality woes aren't a surprise, as the company routinely posts financial statements in which the revenues and operating profits (or losses) of each division are laid bare, for all to see. In a report by Yahoo Finance, the reasons for burning through almost $50 billion in four years aren't about technical development costs or cutting-edge research—the blame is laid squarely on a «lack of a clear vision and mismanagement.»

In March 2014, an almost unthinkable event happened. Facebook, the social media platform that had long passed being cool and hip with the kids, purchased a virtual reality hardware company, Oculus VR, for $2 billion. At that point, Oculus VR had barely just released its first product, the Oculus Rift headset, and the acquisition was felt by some to be contrary to the nature of Kickstarter, the crowdfunding project that paid for the hardware's development.

By the time Facebook had fully integrated Oculus VR into its folds and rebranded it all as Facebook Reality Labs in 2020, the division was burning through cash—the popularity of the Oculus Quest 2 headset (now known as the Meta Quest 2) gave rise to an annual revenue of just over $1 billion. Even by the standards of the tech world, that was an impression sum of money.

However, in the same year, Reality Labs had spent a little under $8 billion, giving the whole division an operating loss of $6,600,000,000. That figure was worse in 2021 ($10b loss), 2022 ($10.1b loss), and in 2023 ($13.6b loss). According to Yahoo Finance, Meta is estimated to have already lost between $8.4 and $8.8 billion so far in 2024.