Meta, which operates social media platforms Instagram and Facebook, is reconsidering its investments after a range of its products failed to produce profitable results over the past few years.
Meta’s Reality Labs division produces virtual reality headsets and augmented reality smart glasses that support the company’s overall Metaverse vision. Since 2021, the sector has lost about $73 billion.
According to Meta’s latest financial report, Reality Labs faced an operating loss of US$4.43 billion in the third quarter of 2025 alone.
The latest data from market research firm IDC obtained by The Register shows that Meta shipped only 1.7 million Quest virtual reality headsets in the first three quarters of 2025, a 16% drop compared with the same period in 2024.
“All these ideas about AR (augmented reality) and VR (virtual reality) replacing smartphones are not happening,” Francisco Jeronimo, vice president of data and analysis at IDC, said in a statement to The Register. “It’s never going to happen.”
The losses come after Meta spent several years investing billions of dollars in its Metaverse concept (3D virtual worlds in which people socialize, shop, play, etc.) and innovation in virtual reality technology; however, consumer interest in Metaverses has declined in recent years.
According to Google Trends data, “Metaverse” is a search term that peaked in late 2021 to early 2022 and has declined in popularity since then.
A YouGov survey last February found that by 2024, most Americans will not be using the Metaverse.
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only 26% of Americans have used Metaverse in the past 12 months.
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About one tenth Americans say that No brand presence It will lure them into the virtual universe.
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also, 29% of non-Metaverse users stated that if Lower equipment costs.
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return, twenty three% Indicate that more metaverse activities or experiences they are interested in will encourage them to join.
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In contrast, twenty two% explain Stronger security and privacy protection may be a deciding factor 19% They would be more interested if they could use the Metaverse No VR headset.
Source: YouGov
Meta’s Reality Labs division lost billions of dollars.Colleen Michaels/Shutterstock
Bloomberg recently reported that as Meta faces declining consumer demand in the Metaverse, the company has decided to lay off more than 1,000 employees in its Reality Labs division.
The division currently has approximately 15,000 employees, so the layoffs will reduce the size of the team by approximately 10%. The layoffs come after Meta CEO Mark Zuckerberg and other company executives last month began considering cutting the budget of the company’s Metaverse business by as much as 30%.
