Meta CEO Mark Zuckerberg said the company plans to launch its next-generation Meta Quest headset, tentatively known as the Meta Quest 3, for consumers sometime next year.
In a comment made during Meta’s Q3 earnings call, Zuckerberg confirmed the headset’s arrival next year, as a way to set expectations for ever-increasing costs for Meta’s Reality Labs.
“We expect Reality Labs spending to increase significantly again in 2023, with the biggest drivers of that being the launch of the next generation of our Quest consumer headset and hiring that was done in 2022, but for which we will pay the first full year of salaries next year,” Zuckerberg said (via Seeking Alpha (opens in a new tab)).
The launch of the next-gen headset is also mentioned in the press release for the earnings report on Meta’s investment website. (opens in a new tab). It is quoted along with comments from the company’s CFO, Dave Wehner, about possible increased expenses due to hardware costs for the upcoming headset.
“Our growth in cost of revenue is expected to accelerate, driven by infrastructure-related expenses and, to a lesser extent, Reality Labs hardware costs driven by the launch of our next generation of our consumer Quest headset later next year,” Wehner said.
The Meta Search 2 (opens in a new tab)ever the Oculus Quest 2, is our pick for the best VR headset (opens in a new tab) for computer gaming today. The higher quality Valve Index (opens in a new tab) is a close second. Recent price increase of $100 (opens in a new tab) because the Quest 2 made it less of a must-buy, however, and the recently launched Meta Quest Pro isn’t a direct replacement due to its high cost.
The Meta Quest Pro promises a much improved mixed reality experience. Although its $1,500 price tag means it’s a much higher quality headset than the Quest 2 if you’re hoping to hook it up to your computer. That’s not its intended audience, anyway. It will be the Quest 3 that is the true successor to the budget champion of VR gaming when it arrives next year.
And Meta is pumping money into Reality Labs now for its future headsets. The VR and AR division earned $285 million in the past three months, but that was far from offsetting its total cost. In total, the division lost Meta $3.672 billion during the same time period.
That means Meta spends over a billion dollars month about Reality Labs. That is a powerful investment.
It seems that Zuckerberg and Wehner may be mollifying Meta’s shareholders with the promise of what will come from all that investment. I imagine that even a multi-billion dollar corporation like Meta will be under pressure to abandon what some might consider a metaverse pool of money and focus on their core business instead.
More generally, Meta is down in terms of cash versus this same time last year. Overall revenue is down 4% year-over-year – $27.7 billion versus $29 billion – and total costs and expenses are also up 19% – from $18.5 billion to $22 billion.