Meta’s AR/VR division, Reality Labs, has achieved its strongest financial quarter to date despite ongoing multibillion-dollar losses. The division amassed over $1 billion in revenue during Q4 2023, largely owing to sales of its Quest headsets, and its collaboration with Ray-Ban on smart glasses. Although this is a significant feat for Reality Labs, it is anticipated that the division will continue to incur significant financial losses due to ongoing investment in AR/VR technology and ecosystem expansion. It was revealed that the quarter’s losses were $4.6 billion, with a total loss in 2023 exceeding $16 billion.
The holiday shopping season, which includes Q4, is traditionally a strong period for sales. Meta founder Mark Zuckerberg noted during an analysts call that their smart glasses product had strong sales, leading to Ray-Ban’s manufacturer, EssilorLuxottica, ramping up production. Zuckerberg also pointed out that the Quest 2 and Quest 3 headsets were achieving good sales, particularly the Quest 3 which he dubbed the “most popular mixed reality device”.
Despite the operational losses incurred by Reality Labs, Meta reported strong figures for Q4 2023, with revenues of $40.1 billion. This pushed the company’s total revenue for 2023 to just shy of $135 billion. The company’s main social media platform, Facebook, also grew its user base to 2.1 billion daily active users. Despite this, the company announced a shift in its reporting approach, moving away from active user metrics for Facebook.
Meta’s most recent offering, Threads, is still growing with Mark Zuckerberg announcing a jump to 130 million monthly users from under 100 million last fall. Zuckerberg noted that the number of active users of Threads is far higher today than during the app’s initial growth spike. Zuckerberg also implied that Meta’s future product development will focus on creating artificial general intelligence, which he described as the “theme” moving forward.
Zuckerberg also revealed doubts about Meta offering its apps via alternative app stores in Europe because of Apple’s stringent developer policies. He criticized these policies for being “onerous” and contrary to the spirit of EU regulation while suggesting they could deter many developers from seeking alternative store fronts for distribution.
