Meta reported $353 million Reality Labs quarterly revenue for Q2 2024, a 28% increase compared to Q2 2023. Revenue for Q1 had also been higher than in 2023, by 30%. Meta CFO Susan Li told investors this growth is driven by Quest 3. The first three quarters of 2023 all saw lower Reality Labs revenue than previous years. Quest 2 was approaching three years old, Quest Pro had failed to appeal to consumers, and Quest 3 had been leaked and then officially announced. Quest 3 has reversed this trend, leading Reality Labs to a return to year-over-year quarterly revenue growth in 2024. However, while revenue for the first half of 2024 was higher than 2023, it was still lower than the first halves of 2022 and 2021, when sales of Quest 2 were at their peak. That’s almost certainly because Quest 3 is priced $200 higher than Quest 2 was. Even adjusted for inflation, the difference is still $150, putting Quest 3 in a different price segment than its predecessor. To grow Reality Labs beyond its Quest 2 era, Meta plans to release a Quest 3S at somewhere around $300 which could sell significantly higher volume than Quest 3. A wide range of sources suggest Quest 3S has the Snapdragon XR2 Gen 2 chipset and color passthrough mixed reality capabilities, but uses the old fresnel lenses from Quest 1 and 2 to achieve the lower price. But even Quest 3S won’t bring Reality Labs anywhere near making a profit. That $353 million Q2 revenue came alongside a whopping $4.84 billion in costs, resulting in a quarterly “loss” of around $4.5 billion.