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Meta burned $19 billion on VR last year, and 2026 won’t be any better
Meta's Reality Labs, focused on VR, suffered $19.1 billion in losses in 2025 while generating only $2.2 billion in sales. Following significant layoffs and studio closures, CEO Mark Zuckerberg predicts continued losses in 2026. Despite an aggressive shift towards AI, skepticism around the VR business endures as the company aims to increase profitability through new investments in wearables and mobile platforms.
Key points
- Meta's Reality Labs experienced a loss of $19.1 billion in 2025, worsening from a $17.7 billion loss in 2024.
- In Q4 of 2025, Reality Labs posted a loss of $6.2 billion against $955 million in sales.
- CEO Mark Zuckerberg expresses optimism but anticipates similar losses in 2026, targeting wearables and mobile expansion to eventually recover costs.
- Meta has laid off approximately 10% of Reality Labs staff (around 1,000 employees) and is closing several VR studios.
- Skepticism around Meta’s VR initiatives, which were criticized as an 'international laughingstock', remains prevalent.
Why it matters
- This situation reflects the broader trend in tech where companies are shifting focus from VR to AI, highlighting a strategic pivot in future tech investments.
- Meta's previous 2021 pivot toward the metaverse faced skepticism which has persisted, drawing comparisons to current market sentiments towards emerging technologies.
- Events like TechCrunch Disrupt and initiatives within the AI space indicate a growing interest in AI technologies as VR struggles to maintain relevance.
Meta's substantial losses in its VR division and continuing staff reductions signal a critical juncture in its efforts, as the company redirects focus towards AI and seeks to redefine its technology strategy amidst ongoing skepticism and financial challenges.