Meta’s augmented and virtual reality division Reality Labs generated over $1 billion in revenue for the first time in the final quarter of 2023, the company’s strongest quarter yet. The boost came from sales of Quest VR headsets and Ray-Ban smart glasses developed together with EssilorLuxottica. However, Reality Labs continued to post massive losses – $4.6 billion this past quarter and over $16 billion in 2023 alone. CFO Susan Li said losses are expected to increase significantly in 2024 due to ongoing investments in product development and expanding the VR/AR ecosystem.
The holiday shopping season has typically been when Reality Labs performs best. On an analyst call, Mark Zuckerberg revealed EssilorLuxottica is planning to manufacture more smart glasses than expected due to high demand. He added that both the Quest 2 and latest Quest 3 headsets are selling well, with the Quest 3 being the most popular mixed reality device available.
Beyond Reality Labs, Meta as a whole reported a strong quarter – $40.1 billion in Q4 revenue and just under $135 billion for the whole of 2023. However, the company announced it will transition away from disclosing Facebook’s user figures, including daily and monthly active users. This shift demonstrates Facebook’s changing position within Meta’s “family of apps” as growth slows compared to Instagram and newer offerings like Threads.
Zuckerberg said Threads now has 130 million monthly active users, up from just under 100 million last fall, surpassing its initial launch peak. He also reinforced Meta’s ambition to develop artificial general intelligence, saying it will drive future products and services like reasoning, planning and programming.
Finally, Zuckerberg believes the alternative app store policies implemented by Apple in Europe are so onerous that it’s unlikely any major developer, including Meta, will choose to participate. He feels the policies contradict the intent of the EU regulations they were based on.
