Meta Quest 3 carries the burden of breathing new life into the VR market
The Meta Quest ecosystem is not growing as fast as it used to. Now it's up to Meta Quest 3 to give it a new boost.
At Meta Connect 2023, Meta announced a new milestone: Users have spent $2 billion on the Meta Quest Store to date. The ecosystem, which launched in May 2019 with the Oculus Quest, is the largest marketplace for VR apps and a bellwether for the health of the entire industry.
A comparison with previous milestone announcements suggests that consumer spending has slowed over the past year. In February 2022, Meta announced that users had spent $1 billion in the Quest Store. By October 2022, that number had reached $1.5 billion. Now it took a year to reach $2 billion.
Meta also noted that one in twelve titles earned ten million US dollars or more. In previous ecosystem updates, such as in the spring, the company was more permissive with new numbers.
All eyes on Meta Quest 3
Reality Labs' revenue, published each quarter, also shows a downward trend. In the first and second quarters of 2023, revenue decreased around 40 and 50 percent year-over-year. At the same time, operating losses increased by about 33 percent. In the second quarter of 2023 alone, Meta spent $3.7 billion on the division, with more than half of the investments going toward AR research.
There are many reasons for the slowdown in consumer spending: A long drought of high-profile first- and second-party titles, the fact that Quest 2 is nearing the end of its lifecycle, and the (rather early) announcement of its successor in June.
What's clear is that the ecosystem is in dire need of a boost, and that's a task the more expensive Meta Quest 3 will have to take on. Can the 50 new titles that Meta has announced for Quest 2 and 3 later this year, as well as mixed reality, pique the interest of buyers? The holiday season and quarterly results will show.