Horizon Worlds, Meta's social VR app in which users interact as avatars in shared digital spaces, was once the company's poster child for the metaverse. However, it has struggled to gain mainstream traction.
Over the 2024 holidays, Meta's Horizon app briefly topped app store charts — not because of surging interest in the metaverse, but because it's required to set up a new Quest headset. It signaled that the devices were a popular gift.
That momentum didn't stick. On this week's earnings call, Meta said Quest sales underperformed, dragging Reality Labs' revenue down 6% year-over-year.
On the call, Evercore analyst Mark Mahaney asked what might finally shrink those multibillion-dollar losses.
"There are more investments that I think make sense to make," Meta CEO Mark Zuckerberg responded, citing the growth of Meta's AI glasses and a vision to eventually sell tens of millions of units.
Internally, the stakes are high. Meta CTO Andrew Bosworth has said 2025 is the "most critical" year for the company's metaverse effort, warning staff that without real traction, the whole thing could go down as a "legendary misadventure."
Reality Labs, which includes the Quest headsets, Horizon Worlds, and Meta's Ray-Ban smart glasses, is structured into two units: Metaverse and Wearables. In January, Meta quietly reshuffled the division, moving top sales and marketing leads under broader company leadership to align more tightly with its AI push.
For now, Meta is still in the fight, though its momentum has clearly moved elsewhere: to its Llama AI models, Meta AI, and those Ray-Bans. The metaverse may not be dead yet, but it's no longer center stage.
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