In 2021, Mark Zuckerberg announced that Facebook would cease to exist. The company would be renamed Meta. The future, he claimed, belonged to the metaverse, a virtual world where we would work, have fun, and meet friends. He promised a billion users and hundreds of billions in commerce. Four and a half years later, that grand dream has resulted in a bill exceeding $80 billion in net losses.
A black hole costing tens of billions
Horizon Worlds launched in late 2021 and was supposed to be the flagship of the entire project. But the reality was brutally different. The platform never surpassed a few hundred thousand monthly active users. For a project into which billions were being poured, that was a catastrophic figure. Moreover, Horizon Worlds became a target of ridicule. Zuckerberg’s avatar in the virtual world had no legs. This became a viral meme that perfectly symbolized the entire problem: the metaverse looked cheap and empty, and no one wanted to spend time there.
The Reality Labs division is responsible for the entire VR project. Since 2020, the division has accumulated losses approaching $80 billion. In 2025 alone, it was $19.2 billion in the red. Sales of Quest headsets meanwhile fell 16% year over year in 2025. And Meta is not alone. Apple had to scale back production of its $3,500 Vision Pro due to weak demand. People simply are not interested in wearing heavy headsets and spending time in a virtual world.
The end—or not?
In January 2026, Meta laid off approximately 1,500 Reality Labs employees, closed gaming studios, and also discontinued the popular fitness app Supernatural, which Meta had acquired for $400 million. And in March, Meta confirmed that Horizon Worlds would be available only as a mobile app starting June 15. The end on Quest headsets. The end of the VR metaverse.
But then something unexpected happened. Just two days after the announcement, Chief Technology Officer Andrew Bosworth appeared on Instagram with a message that surprised everyone: “Today, we made the direct decision to keep Horizon Worlds in VR." One devastated fan managed to reverse the decision of a billion-dollar company. Meta made a 180-degree turn. Existing VR games will remain operational. But make no mistake: Meta does not plan to develop any new VR games. The mobile version remains the priority because it has a larger audience.
The Horizon Worlds mobile app recorded 45 million total downloads, including 1.5 million in 2026 alone, representing 53% year-over-year growth. That sounds great. But total user revenue amounted to just $1.1 million over the app’s entire lifetime. That is pocket change compared with what Meta invested in the metaverse.
The metaverse is dead, long live AI
What changed the entire equation? Artificial intelligence. When ChatGPT arrived in late 2022, Meta quickly shifted its strategy. Advertising revenue improved, the stock recovered, and by 2024 the company had nearly tripled in value compared with its 2022 lows. Meanwhile, the metaverse continued to bleed money.
Zuckerberg made it clear: investment is going into glasses, wearable electronics, and artificial intelligence. And the numbers back that up. Meta plans capital expenditures of $115 billion to $135 billion in 2026, up from $69.7 billion in 2025. The company signed a $27 billion contract with Nebius to deploy NVIDIA GPUs and a $6 billion partnership with Corning for fiber-optic cables for AI data centers.
Meanwhile, Meta AI reached nearly one billion monthly active users in the first quarter of 2025.
While Meta is closing the virtual world, it is opening up the physical one. It signed a 10-year lease on Fifth Avenue in New York, where it will open a store selling AI glasses and VR headsets. And the Ray-Ban AI glasses are precisely what is actually working for Meta. Sales tripled in 2025. These glasses do not run on virtual worlds, but on artificial intelligence. They are devices for the real world, not a replacement for reality. And that appears to be what people want.
Sources: finance.yahoo.com techcrunch.com and qz.com
