Meta, formerly known as Facebook, disclosed an operating loss of $3.85 billion in the first quarter for its Reality Labs unit. Despite an increase in revenue for the metaverse division, which reached $440 million, the losses continue to mount. This figure represents a substantial shortfall in projections, as analysts were anticipating a smaller operating loss of $4.31 billion and higher sales of $512.5 million according to StreetAccount.

Since Meta began reporting this business segment separately at the end of 2020, Reality Labs has accumulated losses exceeding $45 billion. The competition in the virtual reality market is intensifying, particularly with Apple making strides with its own offerings.

Meta’s CEO Mark Zuckerberg has emphasized the importance of the metaverse, positioning it as the next frontier in digital innovation. The company’s strategic shift from Facebook to Meta in 2021 was a symbolic move to align with Zuckerberg’s vision for the future of computing. Despite this ambitious vision, the development of metaverse technology remains a challenging and expensive endeavor.

Recently, Meta unveiled the Quest 3 VR headset as the latest addition to its mixed reality hardware lineup, priced at $499. Apple, on the other hand, introduced its Vision Pro headset at $3,499 in February, focusing on providing a unique “spatial computing” experience.

Additionally, Meta has announced plans to collaborate with third-party hardware manufacturers to produce new VR headsets utilizing the Meta Horizon operating system. Zuckerberg emphasized the importance of maintaining an open ecosystem to drive the future of computing, in contrast to Apple’s closed model.