Reality Labs has lost $80B+, but it still makes all of Meta's hardware, and reflects Mark Zuckerberg's wish to run a business without Google or Apple middlemen
Business InsiderPeter Kafka
Context & Ripple Effects
Reality Labs' losses have risen from more than $42 billion in early 2024 to more than $80 billion, despite recurring revenue growth. Meta's latest reported quarter still paired $470 million in unit revenue with a $4.4 billion operating loss in Reality Labs' Q3 results.
The significance is broader than the metaverse business: Reality Labs now makes all of Meta's hardware. That makes its spending a measure of Meta's attempt to own a customer-facing hardware route rather than depend on Apple or Google as intermediaries.
First-order effects
Meta is carrying an $80 billion-plus cumulative loss inside the unit responsible for its entire hardware operation, tying hardware execution directly to Reality Labs' financial performance.
Reality Labs' mandate gives Zuckerberg's effort to reduce reliance on Apple and Google an internal hardware owner, rather than a standalone experimental division.
Second-order effects
Meta's hardware investments will be assessed not only against Reality Labs revenue, but also against whether they create enough strategic control to justify continued losses.
Apple and Google remain the intermediaries Meta is seeking to work around; Meta's ability to establish an independent hardware route determines how much leverage that effort can realistically create.
Third-order effects
If Meta continues to fund the unit at this scale, consumer hardware may increasingly be treated by large platforms as a deployment and distribution asset, not simply a profit center.
The pattern favors companies able to absorb prolonged hardware losses in pursuit of platform control, though Reality Labs' reported revenue and losses do not yet show that this strategy can become self-sustaining.
The trend: Meta's Reality Labs spending is one data point in the broader push by platform companies to gain deployment-layer control through owned hardware.
The Metaverse never existed. On the other hand, VR as a computing platform has existed since before the “lazy takes,” & I believe it has a mass-market future, even though it's not growing. I revisited my metaverse tweets since 2022, searched: metaverse (from:diegobez) — I'm fine
CTO at Meta and head of Reality Labs after spending 80 billion dollars on VR, renaming their company Meta, then cancelling their flagship VR app Horizon Worlds that they literally called their metaverse app “Nobody ever said that VR is the Metaverse” [image]
@boztank [link to X post from May 10, 2023] The metaverse is dead. Let's organize an online wake so we 600,000,000 monthly active users in Fortnite, Minecraft, Roblox, PUBG Mobile, Sandbox, and VRChat can mourn it's passing together in real-time 3D [link]
Jesus Christ. You guys would do well to step out of the board room and actually listen to what everyone wants, what the audience thinks, and then do that. That leads to users, which leads to money. I don't know why every decision feels so contrary to the unified voices asking …
@boztank Ideally to help prevent misinformation along these lines, it feels like RL could benefit from a branding ‘noun and verb’ design reset. Clearer name hierarchy would make it so much easier for both devs and users to understand the various platform identities and core funct…
Yes, this is all about making the iPhone “the thing that gets us to the thing” when it still clearly remains the thing, which remains a problem for anyone but Apple... spyglass.org/the-iphone-i... [embedded post]