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Meta's Hardware Reality Check: Higher Prices, Slower Releases, and a Metaverse Retreat

MarketDash Editorial Team
7 hours ago
Meta is hiking VR headset prices and pumping the brakes on new hardware releases as it redirects resources from metaverse dreams to AI glasses, all while navigating tariff pressures and internal turmoil at Reality Labs.

Meta Platforms Inc. (META) is about to make its virtual reality headsets more expensive, which is an interesting move for a company that's been trying to convince everyone VR is the future.

Executives Gabriel Aul and Ryan Cairns told employees the company is shifting toward "premium" device pricing, according to Business Insider reporting on an internal memo. The culprit? Tariffs that have been squeezing U.S. tech hardware costs across the board.

Right now, Meta's Quest 3 flagship headset runs $499.99, while the entry-level model costs $299.99. Those numbers are about to climb.

But the memo revealed more than just price hikes. Meta is also planning to slow down its cadence of new hardware releases, choosing instead to focus on delivering better software that actually takes advantage of what its devices can do. MarketDash reached out to Meta's investor relations team for comment and is awaiting response.

The Bigger Picture: Meta's Strategic Pivot

This pricing shift isn't happening in isolation. Meta is in full corporate restructuring mode, implementing budget cuts of up to 30% at Reality Labs while pulling resources away from metaverse-focused projects to fund AI glasses and wearable technology.

It's quite the turnaround from 2021, when Mark Zuckerberg was all-in on the metaverse and CNBC declared that the "metaverse won Christmas." Four years later, the reality looks considerably less rosy. Quest product sales declined year-over-year in the first half of 2025, with only a modest Q3 rebound driven by retailers stocking inventory for the holidays.

The company has also delayed its mixed reality glasses project, internally called "Phoenix," pushing it from the second half of 2026 to the first half of 2027.

AI Ambitions Hit Speed Bumps

Zuckerberg spent last year promoting Meta's Llama models as open-source AI champions. Then Llama 4 underperformed and Chinese labs like DeepSeek started breathing down Meta's neck with competitive offerings.

The response? Meta is now developing a new proprietary frontier model called Avocado, though training challenges have already pushed its launch from late 2025 to early 2026.

Meanwhile, Meta acquired AI-wearable startup Limitless to accelerate what it calls "personal superintelligence." But it's also retiring non-core apps and ending commercial sales of the Limitless Pendant, though existing users will get free premium features.

Leadership Shake-Up and Market Competition

Perhaps nothing signals Meta's strategic shift more clearly than its leadership changes. Zuckerberg replaced longtime Chief Product Officer Chris Cox with 28-year-old Scale AI founder Alexandr Wang as chief AI officer. Chief AI Scientist Yann LeCun also departed to launch his own startup.

Meta has already spent $14.3 billion to acquire Wang's team and raised its 2025 capital expenditure outlook to over $70 billion. That's serious money backing a serious bet on AI.

In the hardware space, Meta faces stiff competition from Apple Inc. (AAPL) in the premium market, along with Sony Group Corp (SONY), which makes the PlayStation VR2.

META Price Action: Meta shares were down 1.21% at $648.99 on Wednesday at publication, according to market data. As of Wednesday, the stock had gained over 8.5% year-to-date.

Back to News

Meta's Hardware Reality Check: Higher Prices, Slower Releases, and a Metaverse Retreat

MarketDash Editorial Team
7 hours ago
Meta is hiking VR headset prices and pumping the brakes on new hardware releases as it redirects resources from metaverse dreams to AI glasses, all while navigating tariff pressures and internal turmoil at Reality Labs.

Meta Platforms Inc. (META) is about to make its virtual reality headsets more expensive, which is an interesting move for a company that's been trying to convince everyone VR is the future.

Executives Gabriel Aul and Ryan Cairns told employees the company is shifting toward "premium" device pricing, according to Business Insider reporting on an internal memo. The culprit? Tariffs that have been squeezing U.S. tech hardware costs across the board.

Right now, Meta's Quest 3 flagship headset runs $499.99, while the entry-level model costs $299.99. Those numbers are about to climb.

But the memo revealed more than just price hikes. Meta is also planning to slow down its cadence of new hardware releases, choosing instead to focus on delivering better software that actually takes advantage of what its devices can do. MarketDash reached out to Meta's investor relations team for comment and is awaiting response.

The Bigger Picture: Meta's Strategic Pivot

This pricing shift isn't happening in isolation. Meta is in full corporate restructuring mode, implementing budget cuts of up to 30% at Reality Labs while pulling resources away from metaverse-focused projects to fund AI glasses and wearable technology.

It's quite the turnaround from 2021, when Mark Zuckerberg was all-in on the metaverse and CNBC declared that the "metaverse won Christmas." Four years later, the reality looks considerably less rosy. Quest product sales declined year-over-year in the first half of 2025, with only a modest Q3 rebound driven by retailers stocking inventory for the holidays.

The company has also delayed its mixed reality glasses project, internally called "Phoenix," pushing it from the second half of 2026 to the first half of 2027.

AI Ambitions Hit Speed Bumps

Zuckerberg spent last year promoting Meta's Llama models as open-source AI champions. Then Llama 4 underperformed and Chinese labs like DeepSeek started breathing down Meta's neck with competitive offerings.

The response? Meta is now developing a new proprietary frontier model called Avocado, though training challenges have already pushed its launch from late 2025 to early 2026.

Meanwhile, Meta acquired AI-wearable startup Limitless to accelerate what it calls "personal superintelligence." But it's also retiring non-core apps and ending commercial sales of the Limitless Pendant, though existing users will get free premium features.

Leadership Shake-Up and Market Competition

Perhaps nothing signals Meta's strategic shift more clearly than its leadership changes. Zuckerberg replaced longtime Chief Product Officer Chris Cox with 28-year-old Scale AI founder Alexandr Wang as chief AI officer. Chief AI Scientist Yann LeCun also departed to launch his own startup.

Meta has already spent $14.3 billion to acquire Wang's team and raised its 2025 capital expenditure outlook to over $70 billion. That's serious money backing a serious bet on AI.

In the hardware space, Meta faces stiff competition from Apple Inc. (AAPL) in the premium market, along with Sony Group Corp (SONY), which makes the PlayStation VR2.

META Price Action: Meta shares were down 1.21% at $648.99 on Wednesday at publication, according to market data. As of Wednesday, the stock had gained over 8.5% year-to-date.