Meta CEO Mark Zuckerberg said that the next generation Meta Quest headset, tentatively named Meta Quest 3, will be available to consumers within the next year.

In comments during Meta's Q3 earnings call, Zuckerberg confirmed that the headset will be available next year as a way to raise expectations about the ever-increasing costs for Meta's Reality Labs.

"We expect Reality Labs expenses to increase significantly again in 2023, and the biggest driver of that will be the launch of the next generation consumer Quest headset and the hiring that took place in 2022, but next year we will pay the first year's salary for that." Zuckerberg said (via Seeking Alpha (opens in new tab)).

The launch of the next-generation headset is also mentioned in an earnings press release on Meta's investor website (opens in new tab). It is quoted along with comments by the company's CFO, Dave Wehner, regarding potential cost increases due to the hardware costs of the next headset.

"We expect revenue cost growth to accelerate due to infrastructure-related costs and Reality Labs' hardware costs from the launch of the next generation consumer Quest headset later next year," Wehner said.

The Meta Quest 2 (opens in new tab), formerly the Oculus Quest 2, is our pick for the best VR headset for PC gaming today (opens in new tab). The more premium Valve Index (opens in new tab) is a close second. However, the recent $100 price increase for Quest 2 (opens in new tab) makes it no longer a must-buy, and the newly released Meta Quest Pro is not a direct replacement due to its higher cost.

Meta Quest Pro promises a much improved mixed reality experience. However, its $1,500 price tag means that it is a much more premium headset than the Quest 2, if one wishes to connect it to a PC. In any case, that is not the intended target. The Quest 3, coming next year, will be the true successor to the budget champion of VR gaming.

And Meta is putting money into Reality Labs for future headsets; the VR and AR division earned $285 million in the past three months, far from offsetting its total costs. During the same period, the division lost a total of $3.672 billion to Meta.

That means Meta spends more than $1 billion a month on Reality Labs. That is a huge investment.

Zuckerberg and Wehner may be promising what will happen with that investment to soften Meta's shareholders. Even a multi-billion dollar company like Meta may be under pressure to abandon what some might consider the funding source of the Metaverse and instead focus on its core business.

More generally, metas are down in terms of cash versus the same period last year. Overall sales are down 4% y/y, $27 billion vs. $29 billion, and total costs and expenses are also up 19%, from $18.5 billion to $22 billion.