2025 could become a decisive year for Reality Labs
The stakes are rising: In a leaked memo to his team, the head of Reality Labs says 2025 will be a critical year.
A few days ago, Meta announced its financial results for the fourth quarter of 2024. Reality Labs, Meta's division for VR and AR products, posted record revenues, but also a record loss.
In total, Meta has invested around 70 billion in the metaverse over the past four years, without coming close to making a profit. More than half of this has been spent on a product that is not even on the market yet: AR glasses, the first commercial version of which may come to market in 2027, and which will take many more years to become a hit with consumers. That is, if people accept the technology at all.
VR and AR are a huge bet that will require investment over the next decade and beyond. At the same time, the pressure is on to turn the long-held vision into reality and make a profit from the technologies and products that Reality Labs has developed over the past decade.
Leaked memo points to growing pressure
An internal memo that Meta's CTO and head of Reality Labs Andrew Bosworth sent to his team last November, and which Business Insider published yesterday, shows that the pressure on the division is mounting. Bosworth writes:
"Next year is going to be the most critical year in my 8 years at Reality Labs. We have the best portfolio of products we've ever had in market and are pushing our advantage by launching half a dozen more AI powered wearables. We need to drive sales, retention, and engagement across the board but especially in MR. And Horizon Worlds on mobile absolutely has to break out for our long term plans to have a chance. If you don't feel the weight of history on you then you aren't paying attention. This year likely determines whether this entire effort will go down as the work of visionaries or a legendary misadventure."
Later in the memo, Bosworth adds: "On paper 2024 was our most successful year to date but we aren't sitting around celebrating because know it isn't enough. We haven't actually made a dent in the world yet."
A turning point for Reality Labs?
This way of speaking is no coincidence: Mark Zuckerberg also recently talked about how 2025 will be a pivotal year for the metaverse.
"This will be a defining year that determines if we're on a path towards many hundreds of millions and eventually billions of AI glasses -- and glasses being the next computing platform like we've been talking about for some time -- or if this is just going to be a longer grind."
Of course, this rhetoric could just be an attempt to motivate Reality Labs employees to do their best. CFO Susan Li confirmed in the investor conference that Reality Labs' spending will continue to increase in 2025 and that the goal is to develop the next computing platforms, which will take a lot of time.
At the same time, however, it is also clear that after ten years, Reality Labs has not yet succeeded in changing the world, and that in 2025 and beyond, the stakes may be higher than in previous years.
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