Meta’s Reality Labs loses $3.7 billion in third quarter as Zuckerberg’s big bet keeps bleeding cash

Meta continues to push the metaverse as the future. In the present, it keeps racking up losses.

In its third-quarter earnings report Wednesday, Meta revealed that its Reality Labs unit, which develops metaverse-related technologies, recorded a $3.74 billion operating loss.

Revenue in the virtual reality and augmented reality division dropped 26% from $285 million a year earlier to $210 million. Analysts were expecting sales of $299.3 million and a $3.9 billion operating loss, according to StreetAccount.

Facebook founder and CEO Mark Zuckerberg changed the company’s name to Meta two years ago, declaring the metaverse “the next frontier.”

While Meta is pouring billions of dollars a quarter into VR and AR to try and turn Zuckerberg’s dream into a reality, the market remains nascent. Developers who attended Meta’s recent Connect conference for mixed reality told CNBC that Apple’s upcoming entry into the VR market could catalyze the industry and push it into the mainstream.

Meta debuted its Quest 3 VR headset in September, pitching it as a technically superior version of the older Quest 2 device. The new product contains an improved “passthrough” feature that creates more of a mixed reality experience.

The Quest 3 has a starting cost of $499, which is $200 more than the Quest 2 but $500 cheaper than the high-end Quest Pro VR headset.

The company is positioning its Quest headsets as a more affordable way for people to experience VR compared to Apple’s upcoming Vision Pro mixed reality headset, which will cost $3,499 when it debuts next year.

In June, Meta debuted the Meta Quest+ VR subscription service for users who want to access two new games each month. The subscription service costs $7.99 a month and works with the Quest 2, Quest Pro and Quest 3 VR headsets.

WATCH: Meta whistleblower Francis Haugen gives her take on states suing Meta

Don’t miss these CNBC PRO stories: