Meta shifts focus from consumer VR hardware to AI and wearables
Meta is reallocating resources from its consumer VR hardware division to artificial intelligence and wearable technology, following a decline in Quest headset sales.
Meta reported a 6% revenue decline in its Reality Labs division during the third quarter of 2026, totaling $443 million. Chief Financial Officer Susan Li attributed the drop to lower sales of the Quest headset line, noting that growth in AI-powered smart glasses only partially mitigated the losses.
The company is now pivoting its strategic focus toward AI and wearable devices, effectively lowering the priority of its mass-market VR offerings. While CEO Mark Zuckerberg stated that Meta remains committed to the long-term potential of virtual reality as a foundation for future AR-integrated holographic experiences, he emphasized that immediate investment will prioritize AI development.
Meta plans to launch a new VR-AR hybrid device in the spring of 2027 targeting high-end and professional users. This shift coincides with a broader reduction in funding for large-scale VR gaming titles, leaving the future trajectory of the consumer-focused Quest platform uncertain.