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Meta's metaverse arm, Reality Labs, generated over $1 billion in revenue in Q4 of 2023, marking its best quarter yet.
CEO Mark Zuckerberg pointed towards encouraging sales of both its Quest headsets and Ray-Ban Meta smart glasses as revenue drivers.
Ray-Ban maker EssilorLuxottica was “planning on making more [smart glasses] than we'd both expected due to high demand,” Zuckerberg said on a call with analysts.
He added that the Quest 2 and 3 were “performing well,” and that the Quest 3 is the “most popular mixed reality device.”
However, as Reality Labs' revenue increases, so does its losses. The metaverse group lost $4.6 billion in the quarter, amounting to $16 billion in 2023.
Meta CFO Susan Li said that these losses are expected to “increase meaningfully year-over-year due to our ongoing product development efforts in augmented reality/virtual reality and our investments to further scale our ecosystem.”
It's a message that the firm was perpetuating throughout last year. "We continue to expect Reality Labs operating losses to increase year-over-year in 2023," Meta said in Q1 2023.
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Overall, Meta reported better-than-expected earnings with sales in Q4 jumping 25% year on year and expenses decreasing 8% year over year to $23.73 billion.
The Facebook and Instagram parent also announced its first-ever dividend and an additional $50 billion in share buybacks. A quarterly dividend of 50c per share will be payable on 26 March.
Meta's shares are up 14% in after-hours trading on Thursday.
Meta's earnings come as Apple releases its first VR headset on Friday. Costing $3,500, Apple's Vision Pro's price dwarfs that of Meta's Quest 3 VR headset, which has a starting price of $500.
However, unlike Zuckerberg's metaverse pivot, Apple has made no mention of the metaverse in any of its headset's marketing materials.
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Yat Siu, co-founder and executive chairman of Animoca Brands, recently reiterated that metaverse investments are long term plays. "It almost doesn't matter how you invested as long as you invested. If you took a hundred bets, you were fine," Siu said in a recent interview.
"For some of us, money is our end," he explained. "That's maybe a small community, and that was the community that occupied most of crypto. But the majority of us look at money as a means to an end."
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