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In fiscal year 2025, Meta’s Reality Labs division reported $2.2 billion in revenue but faced a substantial $19.2 billion in operational losses. This marks an 8.3% increase in losses compared to the previous year, accumulating $83.6 billion in total losses against $11.8 billion in revenue since the division’s inception in 2020.
Despite these financial setbacks, Meta remains optimistic about the future of mixed reality. CEO Mark Zuckerberg announced a strategic pivot, with the company reallocating its resources toward the development of augmented reality (AR) glasses and wearables. Meta plans to allocate 70% of its investment into these new technologies, reducing its focus on virtual reality (VR) and Quest headsets to 30%.
As part of this restructuring, Reality Labs has closed three VR studios—Sanzaru Games, Twisted Pixel, and Armature Studio—and laid off around 1,000 employees, equivalent to 10% of its staff. The strategic shift also includes efforts to bring Meta’s Horizon platform to mobile devices, aligning with the company’s broader goals in artificial intelligence integration.
Zuckerberg remains optimistic, suggesting that 2025 may represent the peak in losses, with expectations of gradual reductions in the coming years. While acknowledging the slower-than-anticipated adoption of VR, Meta is committed to creating a profitable ecosystem with the Horizon platform and advancing its innovative wearables for future success.

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Meta's Reality Labs division lost $19.2 billion in fiscal 2025 despite $2.2 billion in revenue, bringing total losses to $83.6 billion since 2020. The company is pivoting strategy by allocating 70% of investment to AR glasses and wearables while reducing VR focus to 30%. This shift includes closing three VR studios, laying off 1,000 employees (10% of staff), and expanding the Horizon platform to mobile. Zuckerberg expects 2025 to mark peak losses with gradual reductions ahead.

Meta's Reality Labs Faces Another Year of Heavy Losses, Shifts Focus to Wearables and AI