Katarzyna Petru
Meta was meant to be the future of the internet, and the Metaverse – a new platform where we would spend half our lives. Meanwhile, after four years of gigantic investments, the company has accumulated over 70 billion dollars in losses, and the Reality Labs division is preparing for one of the largest budget cuts in its history. According to the latest reports, Meta is also delaying two key releases of VR/AR headsets.
The Metaverse hasn't taken off. Meta is pulling the brakes with all its might
When Zuckerberg rebranded Facebook to Meta in 2021 and presented his vision of a "3D internet," it seemed like the beginning of a new era. Today we know that it was a very costly era.
Reality Labs, the division responsible for VR, AR, and the Metaverse, has been generating billion-dollar losses for years, and the Quest headsets – despite good performance in the gaming segment – have not attracted a mass audience nor created a real foundation for the Metaverse. The problems? Low-quality LCD panels, weak processors, average ergonomics, and a lack of strong content outside of gaming. According to Bloomberg and Business Insider, Meta plans to cut the department's budget by up to 30 percent starting in January, with the cuts hitting projects related to the virtual world the hardest.
Two new headsets… but later. Much later
Internal notes from Maher Saba, one of the leaders of Reality Labs, have just leaked to the media. From them, we learn that Meta is delaying its next two devices:
1. Phoenix (formerly Puffin) – the answer to Apple Vision Pro, but not until 2027 - This was supposed to be a breakthrough headset with OLEDs instead of outdated LCDs. Nevertheless, earlier reports from The Information suggested that the device would still be weaker than the Vision Pro – with lower resolution and a less powerful chipset. The premiere has been pushed to 2027.
2. Meta Quest 4 – 2027 or 2028 - The successor to Quest 3 is also on the “let's wait” shelf. Meta plans a complete overhaul of its strategy in the VR segment, which means significant delays for the entire line of equipment.
The competition is awake: Apple, Samsung, Valve
Meta finds itself in a situation that Zuckerberg surely did not anticipate. The XR segment is growing, but it is not Meta that sets the direction.
Apple Vision Pro – micro-OLED, ultra-high resolution, powerful M-series chip, native 3D films (MV-HEVC).
Samsung Galaxy XR + Android XR – a joint project by Samsung and Google, also with micro-OLED.
Valve Steam Frame – launching in 2025; LCD panel, but a strongly gaming-focused ecosystem.
Importantly: Meta is the only one that does not support 3D films, as its hardware does not support MV-HEVC – the codec necessary for playing spatial materials. As a result, Quest falls behind not only in image quality but also in multimedia features.
Is Meta abandoning the Metaverse?
No. But it's clear that the company is moving out of "Zuckerberg's dream" mode and into "cost-cutting" mode. VR remains part of the strategy, but it will be developed more slowly, cautiously, and with greater focus on real technologies rather than promises that have not translated into any mass product since 2021.
Meta now has to catch up with rivals who have switched to micro-OLED and powerful computing systems – precisely those elements that Zuckerberg has downplayed for years, opting for cheap, technically light goggles. Therefore, 2025 is shaping up to be the biggest VR reset in Meta's history. The question is: can the company still make up for lost ground.
