Meta’s VR division hit the billion-dollar revenue mark for the first time in Q4 2023, thanks to Quest 3.
Following a record low in the third quarter of 2023, Reality Labs reported its highest quarterly revenue to date, surpassing the billion-dollar mark for the first time. In the fourth quarter of 2023 (October-December), the division in charge of Quest headsets and Ray-Ban Meta Smart Glasses generated around $1.07 billion.
According to Meta CFO Susan Li, the record sales were driven by high sales of Quest 3 throughout the holiday season. Quest 3 debuted on October 10th. The most recent SteamVR metrics also show that Quest 3 is off to a solid start. Within three months, 14 percent of SteamVR customers have used the gadget, nearly as much as the (much cheaper) Quest 2 when it arrived in 2020.
Reality Labs investments reached a new high at the same time. Meta invested 5.7 billion US dollars on its VR/AR sector during the fourth quarter of 2023. After subtracting income, a record loss of 4.6 billion USD remains.
In a conference call with investors, CFO Susan Li predicted an increase in expenses for next year: “Finally, for Reality Labs, we expect operating losses to increase meaningfully year-over-year due to our ongoing product development efforts in AR/VR and our investments to further scale our ecosystem.”
CONTEXT
Meta emerges from deep crisis stronger than ever
Meta has recovered from its severe crisis in 2022 and is now stronger than ever before, thanks to the AI boom, the growing number of users of its family of apps (8 percent more daily users year on year), and a resurgent advertising business (Meta’s total quarterly revenue increased by 25% compared to last year). In after-hours trading, the stock climbed to $450, up roughly 15%.
With this in mind, and Apple’s entry into the XR market, criticism of Meta’s Metaverse investment is expected to lessen for the foreseeable future.
