What does Display Daily think: I am not a statistician, but I have eyes, and the trend line for Reality Labs’ losses seems to be sloping down into more negatives. But the really interesting thing about all of this is the amount of money being spent on everything but the one thing that stands to make a difference, the near-eye display.
So, the answer to the tile of this piece is, nothing much.
Sure, there’s plenty going into algorithms and computing to manage AR/VR display output, but it’s all just a giant sinkhole for money without a decent set of near-eye displays that anyone can pick up, use, and be happy with.
If you are in Apple’s good graces, or you have a loan shark business, you should get Apple’s Vision Pro because recently the company enabled ultrawide display mode. This is, for some enthusiasts, the killer app. That an a $50 Belkin head strap accessory to make it possible to use the Vision Pro’s ultrawide display for anything more than half an hour. The killer app is a virtual wraparound screen. To watch movies. By yourself. Inside a bucket on your head.
Imagine if you can, $10 billion in venture funding for display startups every year for the last four or five years. Imagine what could have been achieved.
I am not sure what a company like Samsung will do with an XR display or smart glasses, if they come up with anything in 2025, as rumored, but the folly of AR/VR, the so-called vision of the future of computing, seems to be totally disconnected from the reality of the costs and returns. But, we continue to treat it as some sort of long-term investment with a clear path to profitability. Governments can do that, but not companies.
Go back through history and find another commercial project that took so much investment with no ROI except some mirage on the distant horizon of the space-time continuum.
Meta’s Die-Hard Commitment to AR/VR
Reality Labs, Meta’s division dedicated to augmented and virtual reality (AR/VR) technologies, reported revenues of $270 million for Q3 2024, reflecting a 29% increase compared to the same quarter in 2023. This growth continues the positive YoY revenue trends observed in Q1 and Q2 of 2024. However, the division continues to grapple with significant financial challenges. Operating costs reached $4.67 billion for the quarter, resulting in a substantial loss of approximately $4.4 billion. This adds to the losses of $3.8 billion in Q1 and $4.5 billion in Q2. Meta has acknowledged that operating losses for Reality Labs are expected to widen further in 2024 due to ongoing product development and substantial investments.
Despite the financial headwinds, Meta is steadfast in advancing its AR/VR initiatives. The recent launch of the Quest 3 headset, although not reflected in Q3 results, is anticipated to contribute positively to future revenues. Additionally, the company introduced Ray-Ban Meta smart glasses and made significant strides in integrating artificial intelligence with wearable technology. Looking ahead, Meta has outlined an ambitious product roadmap that includes the release of HUD glasses next year, two Quest 4 models slated for 2026, and an ultralight headset expected in 2027.
On the organizational front, Meta has been actively restructuring operations within Reality Labs to optimize costs and improve efficiency. The company implemented layoffs affecting employees in Reality Labs and other divisions such as WhatsApp and Instagram. This move is part of a broader internal reorganization strategy aimed at refining spending priorities and reallocating resources more effectively. Earlier in the year, hardware teams were directed to reduce their budgets by 20%.
Despite the ongoing financial strain, Meta’s leadership remains deeply committed to Reality Labs as a cornerstone of the company’s long-term strategic vision. CFO Susan Li reaffirmed that the division will continue to be a significant area of investment, with a strong focus on delivering an ambitious product roadmap. CEO Mark Zuckerberg indicated that while profitability for Reality Labs may not materialize in the near term—potentially not until the 2030s—the company is prepared to sustain its investments over the long haul to achieve its strategic objectives.
