Meta is reportedly planning to cut spending on its metaverse group by up to 30% in 2026, including its Horizon Worlds social VR platform and the Quest virtual reality headset business, according to a report by Bloomberg. The move comes as the company continues to incur heavy losses at Reality Labs, the AR/VR division behind Meta’s metaverse push.
Back in 2021, Meta renamed itself from Facebook to signal to the world that the metaverse was its next big platform shift. But user growth and revenue from VR and virtual worlds have lagged far behind expectations. Quest headsets continue to be a niche category, and Horizon Worlds has struggled to break into the mainstream despite aggressive marketing and content deals.
Since the AI boom, Meta has also shifted massive resources, including poaching AI talent from competitors, and building its AI infrastructure and products, with more than 70 billion dollars in spending in 2025 alone. Every dollar that was earlier funneled into experimental VR now competes with generative AI models that could boost engagement and ad revenue on Meta’s consumer apps like Facebook, Instagram, and WhatsApp far more directly and quickly.
For AR and VR enthusiasts, this doesn’t mean that Meta is going for an exit. Rather, the company is leaning harder into its family of apps and AI, while allowing Zuck’s metaverse vision to become a slower burn, with a more disciplined R&D effort.
This isn’t the first time Meta’s metaverse has faced hurdles, as Reality Labs has already seen several waves of restructuring, including layoffs, hitting Oculus Studios’ game team and the Supernatural VR fitness app group.
For Meta’s competitors in this space, like Apple’s Vision Pro ecosystem and Microsoft’s enterprise‑focused mixed‑reality tools, the move could put competitive pressure as Meta becomes more ROI-driven with clearer paths to profitability, such as higher‑margin headsets, enterprise use cases, or integrations where AI can meaningfully improve immersion and usability.
Via Bloomberg (paywall)