Meta's Reality Labs Lose $19B as VR Ambitions Falter

Less than five years after Mark Zuckerberg laid out his vision for the metaverse and a VR-centric future, that idea is officially dead. Earlier this month, Meta reportedly began laying off 1,000 people in its Reality Labs division, as it is re-focussing on AI-powered smartglasses instead of the VR headsets that were central to the initial idea of the metaverse. It was an expensive idea in the end, and one that is still costing Meta a lot of money - even as it has shifted its focus elsewhere. In 2025, the company's Reality Labs division lost $19.2 billion, bringing the total bill for Zuckerberg's big bet close to $90 billion in operating losses over the past 7 years. And while the company seems ready to move on - there was no mention of the metaverse in the company's earnings call - it is expecting another big operating loss from the division this year.

And while Meta's VR headsets remain a niche product to this day, a fate they share with other devices in the category, the company's AI powered smartglasses, made in partnership with Ray-Ban and Oakley, are showing a lot more promise, so much so that Zuckerberg likened their arrival to the rapid rise of smartphones nearly two decades ago. "Billions of people wear glasses or contacts for vision correction. I think that we're at a moment similar to when smartphones arrived, and it was clearly only a matter of time until all those flip phones became smartphones. It's hard to imagine a world in several years where most glasses that people wear aren't AI glasses," he said in the company's earnings call.

For Meta, which still relies on advertising sales to fund all of these initiatives, AI glasses will be a great tool to gather even more information about its users, which will help the company target content and ads even more accurately than it already does. "They [the glasses] are going to be able to see what you see, hear what you hear, talk to you and help you as you go about your day," Mr. Zuckerberg laid out his vision that sounds either magical or slightly menacing, depending on your perspective.