The metaverse could be a 'legendary misadventure,' Meta executive says, if Reality Labs doesn't turn things around in 2025

Meta chief technology officer Andrew "Boz" Bosworth said in an internal memo shared with Business Insider that the company's Reality Labs division needs to turn things around in a big way in 2025, or else its whole venture into mixed and virtual reality could go down as a "legendary misadventure."

Reality Labs has sunk tens of billions of dollars into VR development, but the technology has never broken through to "next big thing" status as once predicted. As we said in August 2024, the losses for Meta "are spiralling out of control, with no end in sight." The division suffered nearly $50 billion in losses over 2020-2024, and the news has not gotten any better since: In its fourth-quarter earnings report released last week, Meta said Reality Labs recorded yet another operating loss of $5 billion.

Meta has access to virtually unlimited resources, but even it can't keep taking those kinds of body shots forever, a point Bosworth made in his memo. "We need to drive sales, retention, and engagement across the board but especially in MR [mixed reality]," he wrote. "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."

Nothing's out of the question—Bosworth said in a memo last week reported by Business Insider that Reality Labs sales had grown by 40% in 2024, which "positioned [it] for greatness in 2025." In this more recent memo, he said the achievement marked Reality Labs' "most successful year to date," but added that "it isn't enough," and that "we haven't actually made a dent in the world yet."

It's tough to nail down the real scale of the AR/VR marketplace. It seems tiny, but in April 2024 tech investor Jack Soslow said "the VR market is larger than perceived"—although as we noted at the time, Soslow was employed by a16z Games, a company that raises investment funds for games industry founders, so the assessment should probably be taken with a grain or two of salt. VR headset ownership among Steam users remains minuscule, according to the most recent Steam Hardware and Software survey. Reality Labs plans to launch "half a dozen more AI-powered wearables," Bosworth said in the memo, although a timeline for their releases wasn't shared.

It's possible that Meta's priorities are shifting. Like everyone else, Meta is all-in on generative AI these days, and that's not cheap either. Perhaps the whole initiative was doomed the moment Zuckerberg published the worst promotional selfie of all time. Bosworth may have obliquely suggested that the metaverse money trucks may be slowing down, writing in his memo that he's observed over the last couple years that "our smaller teams often go faster and achieve better results than our more generously funded teams. Not only that, they are much happier!"

Separate from everything else, the simple fact that a top executive at Meta is acknowledging that the company's at-all-costs pursuit of VR may have been a spectacular fumble strikes me as remarkable—it's not the sort of admission of uncertainty you see every day. If 2025 doesn't see the turnaround Meta wants, 2026 could be a very interesting year indeed.