It looks like Meta might be running behind in the VR technology race as its virtual reality division faces more difficulties. Despite new features and the promise of a better metaverse experience, the social media company just can't get out of the slump.
Upgraded Specs Weren't Enough
The Meta Quest 3 Vr headset is set to be released this October 10th, and even though it hasn't hit the market yet, analysts already believe that the company will be shipping out significantly fewer units than it initially planned to.
Price at $500, Meta presented the features that potential buyers would expect in the latest VR headset during the Meta Connect event. "Augments" was also announced which showed an exciting new experience for people who use the mixed reality headset.
However, TF International Securities industry analyst Ming-Chi Kuo says that Meta will be sending out as low as two million units for the latter half of 2023, which was originally much higher at seven million units, as reported by Gizmodo.
Next year might even see fewer units hitting the market, as reports point to Meta only shipping out one million units, cutting the already decreased number by half. This could have something to do with the fact that Meta keeps downsizing its Reality Labs division.
For the second time, Meta fired some of its employees in its metaverse arm mostly affecting those who are creating chips for its VR technology. It's unclear how many people would be out of a job, and it might continue if Zuckerberg fails to turn things around.
Previous reports already state that Reality Labs is bleeding billions, and investors are getting harder to convince that it's a worthwhile investment. It might also be the reason why Meta has decided to bring Horizon Worlds outside of VR-exclusivity as well.
Losing Money Due to Zuckerberg's VR Hopes
The Meta CEO remains hopeful that his vision of a metaverse populated by millions of users will someday come true. Mark Zuckerberg continues to push even though Reality Labs has been racking up operating losses more than earnings.
Back in June when the company revealed its second-quarter earnings report, it showed that the Reality Labs division lost 3.7 billion. Overall, the VR arm of Meta earned $421 million in sales but had $3.5 billion worth of operating losses, as reported by CNBC.
In 2022, Meta lost $13.7 billion overall with a $2.16 billion revenue. From the first quarter of 2022 to the second quarter of 2023, the company lost a total of $21.3 billion. Meta reasoned that the losses were already expected.
The social media company said that the expected losses would "increase meaningfully year-over-year due to our ongoing product development efforts in augmented reality/virtual reality and investments," which leads to them further scaling their ecosystem.
Meta already has plans set to release full AR glasses by 2027, but if the slump persists, that might be pushed further away. Even its smart Ray-Ban glasses are only expected to ship out 1.5 million units in its entire lifecycle.
