Following a period of revenue losses, Meta’s XR research and development division, Reality Labs, documented record profits, as highlighted during the Menlo Park firm’s fiscal year earnings call.
The call announced that Reality Labs secured roughly $1 billion during the closing three months of 2023. While the Reality Labs division did lose $4.65 billion across the entirety of 2023, the previous months forecast a potential upward trend, which may also uptick further thanks to Apple’s splash in the XR market.
CEO Mark Zuckerberg said:
Reality Labs crossed $1 billion in revenue in Q4 for the first time, with Quest having a strong holiday season. Quest 3 is off to a strong start and I expect it to continue to be the most popular mixed reality device. With Quest 3 and Quest 2 both performing well, we saw the Quest app was actually the most downloaded app in the app store on Christmas Day.
Meta’s CEO also explained that the firm’s Ray-Ban Meta smart glasses are experiencing a “very strong start, both in sales and engagement,” Zuckerberg also said how the firm’s partner EssilorLuxottica is forecasting an increase in product production, beating both company’s expectations “due to high demand.”
Meanwhile, the firm, on the whole secured $7.8 billion during the final quarter of 2023 and a yearly gain of $32 billion.
The impressive fourth quarter greatly improved Meta’s performance as it closed the year following a tough 2022 and 2023 – with the shockwaves of financial climates, court dates, and advertising lulls all affecting the company and trickling down to its XR investments.
The firm cut jobs by 14% across the past year, laying off several workers since November 2024. However, the firm seems optimistic that its emerging technology investments and attempts at improving efficiency will prove fruitful.
More on Meta’s Year of Efficiency
During the earnings call, Mark Zuckerberg noted that 2023 was Meta’s “year of efficiency.” Moreover, the CEO stated that the direction enabled Meta to concentrate on developing the firm as a stronger technology company and establish “the stability to deliver our ambitious long-term vision for AI and the metaverse.”
Mark Zuckerberg noted that during 2023, Meta reached its efficiency goals while also returning to solid revenue growth and seeing strong engagement across its lineup of applications.
The CEO explained how the firm shipped several “exciting new products,” listing Threads, Ray-Ban Meta smart glasses, the Quest 3, and “a world-class AI effort that is going to be the foundation for many of our future products” – “I think that being a leaner company is helping us execute better and faster, and we will continue to carry these values forward as a permanent part of how we operate,” he remarked.
Interestingly, the CEO notes how products developed alongside its Reality Labs division – its Ray-Ban smart glasses and Quest 3 mixed reality headsets – are helping drive the company’s revenue alongside its mainline services.
Also, Meta will be advancing its AI capabilities following background developments across 2023. As the CEO states, AI could play a role in boosting the firm’s Metaverse ambitions that fell silent towards the end of the year.
Zuckerberg noted:
A major goal will be building the most popular and most advanced AI products and services. And if we succeed, everyone who uses our services will have a world-class AI assistant to
help get things done. – I also think everyone will want a new category of computing devices that let you frictionlessly interact with AIs that can see what you see and hear what you hear, like smart glasses.
The CEO also noted how its Metaverse platform Horizon: Worlds is growing and has become a top 10 application on the Quest app store. Meta has an “exciting roadmap ahead,” Zuckerberg remarked.
Speaking on the Metaverse, Zuckerberg also added:
We’ve invested heavily in both AI and the metaverse for a long time, and we will continue to do so. These days, there are a lot of questions, more about AI that I get, and that field is moving very quickly, but I still expect this next generation of AR, MR, and VR computing platforms to deliver a realistic sense of presence that will be the foundation for the future of social experiences and almost every other category as well.
With its investments in AI, XR devices, and the metaverse, Meta has a foundation to intertwine its emerging technology portfolio and lead in various XR markets. Mark Zuckerberg added: “I think that smart glasses are going to be a compelling form factor for this, and it’s a good example of how our AI and metaverse visions are connected.”
