Meta's VR bets continue to drain cash, $19B in 2025
29 Jan 2026

Meta's virtual reality (VR) dreams are costing the company a fortune.

The tech giant has reported that its Reality Labs division, which oversees its VR and metaverse projects, lost $19.1 billion in 2025.

This is a significant increase from the $17.7 billion loss it suffered in 2024.

In Q4 alone, Reality Labs posted a staggering loss of $6.2 billion on revenues of just $955 million for the quarter and about $2.2 billion for all of 2025.

Workforce reduction and future plans
Strategic moves

Earlier this month, Meta laid off around 10% of its Reality Labs staff, impacting nearly 1,000 employees.

The company's CEO Mark Zuckerberg has said that most of their investment will now go toward glasses and wearables.

He also said they are focusing on making Horizon a major success on mobile while turning VR into a profitable ecosystem over the coming years.

Reality Labs's losses expected to continue in 2026
Continued challenges

Despite the strategic shift, Zuckerberg has admitted that Reality Labs will remain unprofitable for some time.

"I expect Reality Labs losses this year to be similar to last year," he said during Meta's earnings call.

However, he added that this year would likely be the peak before losses start gradually declining.

Meta's shift from VR to AI
Strategic pivot

Meta's aggressive push into the metaverse in 2021 was met with skepticism. Nearly five years later, that skepticism hasn't faded.

Reality Labs continues to lose billions annually while Meta increasingly focuses on artificial intelligence (AI) as its main growth driver.

Last week, CNBC reported that the company plans to close several VR studios in addition to job cuts.

Retirement of Workrooms app
App closure

Meta has also announced the retirement of its standalone Workrooms app, which was marketed as a VR meeting space for office workers.

The move highlights the company's struggle to find mainstream applications for VR beyond gaming and experimentation.

Despite continued investment in wearables and mixed reality, Reality Labs's path to profitability remains uncertain amid mounting losses and a shift toward AI.