The outlook is getting more complicated for Meta’s virtual reality dreams

For an industry that rarely has major news anymore, this was an awfully big week for virtual reality. Unsurprisingly, all of the important data points are related to the industry’s sole benefactor these days, Meta, which managed to raise the cost of entry to its VR ecosystem, find itself in a new battle with the US government over VR, and announce that it had, again, burnt an awful lot of money on its Reality Lab efforts this quarter.

The strangest bit of news was definitely the seemingly unprecedented move for Meta to jack up the prices of the Quest 2 by $100. This is, again, a one-year-old headset that Meta has purportedly been selling at a loss in order to coax more consumers into the market. This hefty increase takes the entry price from $299 to $399 and signals that the company’s willingness to subsidize headsets into relevancy has its limits.

This price hike accompanies record inflation levels and a hostile stock market which has taken a particularly strong hatchet to Meta’s stock price. The company’s stock is now trading below where it was 5 years ago and the spending at Reality Labs has become a more pertinent concern for investors as the company’s revenue growth starts to fade.

VR and the metaverse are getting to be very expensive efforts for Meta. The company announced Wednesday that they had spent $2.8 billion on Reality Labs in Q2 alone, a number showcasing that the company’s metaverse dreams are more than just hokey marketing speak and remain a substantial financial bet with little near-term upside in an arena where plenty of big tech giants have seemed to pull back their R&D spend in recent years.