• Meta's Reality Labs unit, which develops augmented and virtual reality technologies, logged an operating loss of $4.4 billion in the third quarter.
• Reality Labs revenue rose 29% year over year to $270 million in the third quarter, below analysts' expectations of $310.4 million.
• Facebook co-founder and Meta CEO Mark Zuckerberg believes developing VR and AR technology could position the company to become a leader in what could become the next major personal computing platform.

Despite Meta's successful showcase of its Orion prototype AR glasses in September, the social media giant continues to lose billions of dollars a quarter developing the still nascent metaverse.

Meta reported third-quarter earnings on Wednesday, in which it said its Reality Labs unit, which develops augmented and virtual reality technologies, logged an operating loss of $4.4 billion. Analysts polled by StreetAccount were expecting that unit to post an operating loss of $4.68 billion.

Reality Labs revenue rose 29% year over year to $270 million in the third quarter, below analysts' expectations of $310.4 million. Reality Labs primarily makes money through selling Meta's Quest VR headsets and the Ray-Ban Meta smart glasses.

Meta first entered the VR market in 2014 when it was still named Facebook and bought the VR startup Oculus for $2 billion.

Facebook co-founder and Meta CEO Mark Zuckerberg believes developing VR and AR technology could position the company to become a leader in what could become the next major personal computing platform.

The investment has been costly for Meta. After the company's Wednesday earnings report, Reality Labs has an operating loss of more than $58 billion since 2020.

All that spending culminated in Zuckerberg's demonstration of the Orion device at the company's annual Connect conference in September.

Orion has generated excitement and helped lift spirits within Meta about Zuckerberg's ambitious plans. Meta hopes to capitalize off the unexpected success of its Ray-Ban Meta smart glasses, which it develops with eyewear giant EssilorLuxottica, and pitch consumers on future Orion AR glasses after it courts developers to build apps for the device next year, CNBC reported.

Also in September, Meta released its newest VR headset, the Quest 3S, pitching it as a more affordable way for consumers to experience VR at a starting price of $299. Last year, Meta released the more powerful Quest 3 VR headset, which has a starting price of $499.

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