Meta began 2022 with a new name and a new vision for the future, and at Reality Labs it’s our job to bring that vision to life. We never thought it would be easy or straightforward, but this year was even harder than we expected. Economic challenges across the world, combined with pressures on Meta’s core business, created a perfect storm of skepticism about the investments we’re making.
These are the moments that truly test people’s belief in the future. During boom times, it’s easy to make big, ambitious investments in what’s coming next. But when economic conditions turn, it’s just as easy to turn the other way: cut back on your ambitions, stick to what’s safest and most profitable today, and squeeze as much as you can from it.
We’ve all seen the disastrous consequences of this kind of short-term thinking: hollowed out companies that gave up on innovating long ago, content to just turn the crank on an existing business until it stops working. I grew up here and in my experience Silicon Valley tends to reject this kind of short-termism, which is one of many reasons why America has led the world in building new technologies. That isn’t to say we aren’t adapting — we’ve made tough calls this year to stop doing some work so we can maintain focus on those things we feel are most important. But I can say with confidence that after one of the hardest years in the history of the company, Meta remains as committed to our vision for the future as we were on the day we announced it.
Our convictions here are supported by a few factors that we think are misunderstood by many of our biggest skeptics. As we reported in our Q3 results this October, daily active users on Facebook were at an all-time high, with positive engagement trends. Instagram has more than 2 billion monthly actives, while WhatsApp has 2 billion daily actives. We continue to direct the majority of our investments toward our family of apps as we believe strength in the core can support an ambitious agenda for the future. As also reflected in our Q3 results, about 80% of Meta’s overall investments support the core business, with the other 20% going toward Reality Labs. It’s a level of investment we believe makes sense for a company committed to staying at the leading edge of one of the most competitive and innovative industries on earth.
The good news is that in the long run, we think 2022 will be remembered as a year when foundational pieces of technology enabling our vision for the future made their way into the hands of developers and users for the first time. This October Meta shipped two of them in Meta Quest Pro: Mixed reality is a key part of the journey toward full augmented reality devices, and eye and face tracking is an essential piece of the technology stack needed for AR and VR devices to reach their full potential.
In both cases, the long-term value of these technologies will come from how they’re adopted by the ecosystem of developers, creators, and builders that has formed around these devices. That’s why I’m especially proud that we shipped Quest Pro when we did, because the sooner people can begin working with new technology like this, the sooner its full value and potential can be unlocked. We’ll be living with the benefits of this work for decades to come.
The immediate potential of mixed reality — to see your physical environment blended with digital objects — is already being demonstrated by developers like Overlay, who built Figmin XR, an amazing app for creating virtual objects and spaces in mixed reality, giving you a glimpse of the future AR vision we’re building for.
Mixed reality is about much more than just displaying a live video feed of your surroundings inside the headset. For it to work properly, the headset needs to understand your room as a 3D space, recognizing the surfaces and objects around you and how they can interact with digital objects. It requires technologies like Spatial Anchors, which allow virtual things to occupy fixed spaces in the physical world, as well as Scene Understanding for reconstructing physical spaces virtually, as well as stereoscopic color Passthrough, for capturing the physical world and representing it accurately in the headset with a sense of depth for greater comfort. Meta Reality, our system for mixed reality, combines all these technologies and more into a single system for developers to build with.
Over time it’s clear that mixed reality will help VR devices become increasingly compelling alternatives to laptops and desktop computers, placing virtual screens and interfaces on your desk or in your hands. It won’t be long before a VR headset is capable of emulating a powerful home computer setup, from a device that fits in a backpack and can be used anywhere. The journey toward that type of device took a big step forward with Quest Pro this year.
Eye and face tracking has a similar combination of possibilities, both today and long into the future. Right now, it’s delivering more expressive avatars on Meta Quest Pro, allowing people’s digital selves to more closely match their real-world facial expressions. This is one of many steps we’re taking to create an avatar system that can improve the quality of communication, expression, and connection in virtual spaces — and we’ll have plenty more to share on this in 2023.
But the longer-term possibilities unlocked by eye and face tracking technology go far beyond avatars. Our vision for true AR glasses will require years of progress making our devices slimmer, lighter, faster, and more powerful, all while consuming way less battery power and generating much less heat. One major efficiency gain will come when devices are smart enough to only render the highest-resolution graphics in the small area where a user is actually looking. This October we demonstrated this capability for the first time thanks to the eye tracking technology on Quest Pro, and it’s going to be driving progress in VR and AR for many years to come.
We’ve also learned that the visual quality of a VR device depends on a range of technologies that go beyond the typical metrics we’ve used when describing the displays on a computer, TV, or phone. Along with display resolution, factors like system resolution, sharpness, contrast, and color range each play an important part. So does the optical stack itself, where lenses, coatings, and films each make a huge difference. We recently shared more detail on how each of these come together in Meta’s Infinite Display system for VR optics, the product of years of investment in research and development for VR and AR technologies. That R&D will continue paying off long into the future, and earlier this year we showcased some of the research prototypes we’ve built to demonstrate these next-generation display technologies.
While these early glimpses of the future of VR are important, what’s even more important is the thriving community of VR developers, creators, and users that already exists today. It’s this community, more than any technical breakthrough or hardware advance, that makes us so confident in the things we’re building.
And 2022 was a great year for VR developers. We saw game developers continue their incredible streak of innovation that is shaping the future of their industry. Social experiences became the most popular apps on the Quest Store, validating a belief we held from the moment we began investing in VR: that this is a fundamentally social technology. And fitness apps continued their amazing rise, bringing whole new communities into VR for the first time and showing that this is a platform whose full potential is still in the earliest stages of being understood.
We also saw the beginnings of a new community of creators on our platforms: the virtual world builders. It’s not often you get to witness a whole new form of self-expression and community building emerge on a platform, and the ways creators worked their magic on Horizon Worlds this year was a thing to behold. We’re going to spend 2023 focused on helping this community flourish.
VR is now at a very special moment — fundamental new pieces of the hardware and technology stack are hitting the market for the first time, and a community of developers and users is unlocking its potential in new ways, from scrappy software startups to top-tier game studios, creators, and artists.
We think it’s only going to get better in 2023. The machine learning revolution that has been playing out over the last decade reached a boiling point this year, and it’s still accelerating. At Meta, our biggest priorities as a company are currently benefiting from more than a decade of investment in AI. There are big advances in research, such as our Make-A-Video and Make-A-Scene work, not to mention Cicero, our agent capable of beating humans at a strategy game played mostly through human language negotiations. Our investments are also paying particularly high dividends in ranking and recommendations-powered products like Reels or our core ads systems, where we’re seeing impressive gains as we deploy increasingly powerful AI models. And that’s just as true in Reality Labs, where technologies like Meta Reality or Presence Platform depend heavily on advanced AI to function.
Meta is far from the only company working on pushing the boundaries here, and we expect to see new competitors joining us in building for AR and VR next year. As new devices hit the market, we believe our industry will enter a new era of growth and competition that will bring enormous benefits to users and the developer community. And Meta will have new devices of its own to share, including the successor to Meta Quest 2, our all-time best selling VR device. You’re going to love it. And you’re definitely going to love the Meta Quest Gaming Showcase in Spring, where we’ll once again show off some of the awesome new games coming in the next year.
While we will continue to find ways to work more efficiently, what won’t change in 2023 is our vision and the long-term research effort we’re undertaking to get there. Building true AR glasses will require a massive set of breakthroughs and inventions across all sorts of areas, from lenses and miniature displays to lightweight materials and AI-powered interfaces. While our VR devices and software get most of the public attention, we are directing about half of our Reality Labs operating expenses towards our AR initiatives.. This involves one of the most ambitious R&D operations in the world today, focused on building a truly revolutionary new kind of computing platform.
Whenever I visit our research labs and get to demo the early versions of these technologies, it blows my mind, and I can’t wait for the world to see the results of the things we’re building there. The VR hardware and software we’ve released so far is just the tip of the iceberg, and the best days are still ahead of us.