After a period of revenue losses, Meta’s XR research and development arm, Reality Labs, has posted record profits, as highlighted in the Menlo Park company’s fiscal year earnings call.
On the call, Reality Labs announced it had secured approximately $1 billion for the three months ending 2023. The Reality Labs division lost $4.65 billion for all of 2023, but has been predicting a potential upward trend over the past few months, which could rise even further thanks to Apple. Enter the XR market
CEO Mark Zuckerberg said:
Reality Labs topped $1 billion in revenue in the fourth quarter for the first time, and Quest had a strong season. The Quest 3 is off to a strong start and we expect it to continue to be our most popular mixed reality device. Both the Quest 3 and Quest 2 performed well, confirming that the Quest app was indeed the most downloaded app in the App Store on Christmas Day.
Meta’s CEO also explained that the company’s Ray-Ban Meta smart glasses are experiencing “a very strong start in both sales and engagement.” Zuckerberg also said the company’s partner, EssilorLuxottica, is predicting increased product production that will exceed both companies’ expectations. “Demand is high.”
Meanwhile, the company overall secured $7.8 billion during the fourth quarter of 2023, with a full-year profit of $32 billion.
An impressive fourth quarter marked a significant boost to Meta’s performance as it closes the year following a difficult 2022 and 2023. Shockwaves from the financial environment, court dates, and advertising lull have all impacted the company and trickled down to its XR investments.
The company has cut jobs by 14% over the past year and will lay off several employees starting in November 2024. But the company seems optimistic that its investments in new technology and attempts to improve efficiency will bear fruit.
More about Meta’s Year of Efficiency
On the earnings call, Mark Zuckerberg noted that 2023 is Meta’s “year of efficiency.” The CEO also said this direction will allow Meta to focus on developing the company into a stronger technology company and build “the stability to achieve our ambitious long-term vision for AI and the Metaverse.”
Mark Zuckerberg noted that in 2023, Meta will achieve its efficiency goals while returning solid revenue growth and seeing strong engagement across its application lineup.
The CEO described how the company has launched several “exciting new products,” including Threads, Ray-Ban Meta smart glasses, and Quest 3, and its “world-class AI efforts that will serve as the foundation for many future products.” – “We believe that becoming a leaner company helps us execute better and faster, and we will continue to make these values a permanent part of how we operate,” he said.
Interestingly, the CEO mentioned how the products developed with the Reality Labs division (Ray-Ban smart glasses and Quest 3 mixed reality headset) help drive revenue for the company along with its core services.
Additionally, Meta will advance its AI capabilities based on background developments throughout 2023. As the CEO said, AI could play a role in strengthening the company’s Metaverse ambitions, which were put to rest at the end of the year.
Zuckerberg commented:
Our primary goal is to build the most popular and advanced AI products and services. And if we are successful, everyone who uses our services will have a world-class AI assistant.
Please help me get the job done. – I also think everyone will want a new category of computing devices that can frictionlessly interact with AI that can see what you see and hear what you hear, like smart glasses.
The CEO also mentioned how the Metaverse platform Horizon: Worlds is growing and has become a top 10 application on the Quest App Store. Zuckerberg said Meta has an “interesting roadmap.”
On the Metaverse, Zuckerberg added:
We have been investing heavily in AI and the metaverse for a long time and will continue to do so. Although there are many questions about AI these days and the field is developing very quickly, we still expect the next generation of AR, MR, and VR computing platforms to deliver a realistic sense of presence. It will be the foundation for future social experiences and almost every other category.
Through investments in AI, XR devices and Metaverse, Meta is well-positioned to weave a portfolio of emerging technologies and lead the diverse XR market. Mark Zuckerberg added: “Smart glasses would be an attractive form factor for this and are a great example of how AI and the metaverse vision are connected.”