Meta, the tech giant led by Mark Zuckerberg, is reportedly discontent with the financial drain caused by its VR/AR division. Despite efforts to reduce spending, the company is forging ahead with plans to release new VR headsets and AR glasses over the next few years. However, significant budget cuts and strategic shifts are underway within the Reality Labs division.
Financial Strain and Budget Cuts
According to a report from The Information, Meta has instructed its VR/AR teams to cut spending by 20%. This comes after the division reported a staggering $3.85 billion loss in the last quarter alone. Meta’s chief financial officer, Susan Li, highlighted the division’s total losses of $55 billion since 2019. This push for reduced expenditures follows a massive layoff in the previous year, which saw 10,000 employees lose their jobs, although it’s unclear how many of these were from Reality Labs.
Upcoming VR and AR Products
Despite the financial strain, Meta remains committed to its VR and AR ambitions. The company is planning to release a new Meta Quest 4 headset and a sequel to the Quest Pro, along with AR glasses set for 2025. Notably, these new AR glasses will not feature the Ray-Ban branding, as EssilorLuxottica, the parent company of Ray-Ban, opposed the idea of heavy glasses carrying their name. The upcoming glasses, weighing around 70 grams, will use an LCD screen in the right lens, similar to other AR products like the XReal Air 2 Ultras.
Meta is also shifting its focus towards artificial intelligence. The company is expected to release its Llama 400B semi-open source AI model by the end of this month. This move indicates a broader strategic pivot as Meta continues to invest in emerging technologies while trying to manage the high costs associated with its VR and AR projects.
The new Meta Quest 4 is slated for release in 2026, with plans for both lower-end and higher-end versions. The current Meta Quest 3, priced at $500, has seen improvements, including better integration with Xbox and Steam, as well as enhancements in user interface and hand tracking. The upcoming Quest Pro, expected in 2027, aims to compete with Apple’s Vision Pro. The initial Quest Pro, priced at $1,500, struggled to gain traction due to its high cost, similar to Apple’s $3,500 Vision Pro, which has also faced market challenges.
Balancing Wearability and Functionality
One of the critical challenges for Meta’s AR glasses will be balancing wearability with functionality. The absence of the Ray-Ban brand might provide more flexibility in design, allowing Meta to focus on integrating advanced AI imaging capabilities without the constraints of maintaining a lightweight form factor. The goal is to deliver powerful, user-friendly devices that meet consumer expectations for battery life, power, and visual quality.
The ongoing investment in VR and AR technologies by companies like Meta and Apple highlights the significant competition in this space. Both companies are striving to find a balance between performance, size, and cost to attract consumers. The market for metaverse-related products is still in its infancy, and the willingness of these tech giants to invest heavily despite financial losses underscores their long-term commitment to these emerging technologies.
Meta’s VR/AR division is under pressure to reduce costs amid significant financial losses. Despite this, the company continues to invest in developing new VR headsets and AR glasses, reflecting its commitment to leading the metaverse market. With a strategic shift towards AI and ongoing competition from Apple, Meta’s future in VR and AR hinges on its ability to innovate while managing expenditures. The coming years will be crucial as Meta and its competitors navigate the challenges of balancing advanced technology with consumer affordability and market demand.
