Meta Platforms has reportedly been investing billions of dollars each quarter in developing the metaverse, which CEO Mark Zuckerberg has described as the future of the company. Although sales of VR headsets and AR glasses dropped nearly 40 percent in the U.S. (according to research firm Circana), Meta continues to tout the intersection between AI and the metaverse. “The progress we made in 2023 means generative AI is making its way into the heart of the world’s most popular apps, mixed reality is now at the core of a mass market headset, and Ray-Ban Meta smart glasses will let AI see the world from our perspective for the first time,” explained Andrew Bosworth, CTO and head of Meta’s Reality Labs.

“We believe one of the most powerful manifestations of cutting edge AI will be assistants like Meta AI that can understand the world around you and help you throughout your day, eventually without needing to be prompted,” Bosworth wrote in a post titled “Living in the Future.”

Meta introduced its $499 Quest 3 VR headset in October, which helped to buoy the VR market during the recent holiday shopping season, yet the business still struggled overall in 2023.

“Sales of VR headsets and augmented reality glasses in the U.S. plummeted nearly 40 percent to $664 million in 2023, as of November 25,” reports CNBC (based on research from Circana). “That’s a much steeper drop than last year, when sales of AR and VR devices slid 2 percent to $1.1 billion.”

These numbers suggest Meta may have a challenge transitioning its immersive tech from gaming to the mainstream, especially with the lack of a killer app. However, Zuckerberg announced in late 2021 that he anticipated it would take about 10 years to reach 100 billion users.

“If there’s a challenge there, it’s how do you get great content for this hardware, how do pull some of those levers that enable a developer to put more resources into building a game or some kind of experience,” said Ben Arnold, Circana’s consumer tech analyst. “That’s a little bit about the economics, and it’s about how many people are gravitating towards this platform or this particular device, and if I’m a developer, is that worth my while.”

“Meta is hoping the Quest 3 will inspire developers to create compelling apps and games that utilize the device’s so-called passthrough feature, which allows for augmented reality experiences that mix digital graphics with real-world experiences,” notes CNBC.

“Within months of the Meta Quest 3 launch, seven of the top 20 apps are mixed reality apps. We’re seeing strong signals that people really value these experiences,” Bosworth wrote. “We’ll see this progress accelerate in 2024 as more people access mixed reality and developers learn to harness its power. Whether it’s immersive NBA viewing on Xtadium or a totally new approach to learning music on Pianovision, we’re already seeing MR deliver experiences that would be impossible on any other kind of device.”

Competition in the space will come from players such as Sony, which released its second-generation PlayStation VR2 headset in 2023, and Apple, that plans to launch its Vision Pro mixed-reality headset by June.

Related:
Where Meta Is Going Next with AI and AR, The Verge, 12/21/23
Research Shows VR Market Declined 40% This Year, Increasing Doubts About the Metaverse, ExtremeTech, 12/20/23
You Don’t Love VR and That’s a Huge Problem for Meta and Virtual Reality, TechRadar, 12/19/23
Microsoft’s VR Vision Lives On Thanks to a Surprising Savior in Meta Quest, Windows Central, 12/21/23