• Meta's Horizon app topped Apple's App Store on Christmas Day, signaling strong VR headset demand.
• Quest headsets, starting at $299, are gaining mainstream traction in virtual reality.
• Despite strong demand, Meta's Reality Labs faces significant financial losses.

Meta's virtual reality ambitions got a Christmas boost this year.

On Christmas Day, the company's Meta Horizon app, which users must download to set up the Quest virtual reality headsets developed by Meta, was the top free app in Apple's App Store in the US and the UK, indicating strong holiday demand.

Meta has never disclosed how many Quest headsets it has sold. The surge in app downloads suggests that the Quest is solidifying its status as one of the most mainstream VR headsets. The devices, which start at $299 and are developed by Meta's Reality Labs division, are a relatively affordable gateway to virtual and mixed-reality experiences. They let people watch movies on giant virtual screens, play immersive games, and even work out.

Meta did not respond to a request for comment about Quest sales from Business Insider.

Quest competes with VR headsets from other companies, including Sony, HTC, and Apple, although Apple's Vision Pro headset costs much more, at $3,500.

Meta has been working to make VR more accessible to a broader audience. In October, the company launched the Quest 3S, a less expensive version of the more advanced Quest 3, priced at $299 — $200 less than the standard model. Like the Quest 3, the 3S lets people experience mixed reality in full color, making it a compelling entry point for VR newcomers.

Meta's quarterly revenue from Reality Labs, which includes $299 Ray-Ban glasses that let people take pictures and talk to Meta's AI chatbot, was $270 million — an increase of 29% compared to the same quarter the year before, the company announced in October.

Still, Reality Labs continues to bleed money. In the third quarter of 2024, Meta reported that Reality Labs lost $4.4 billion, up from $3.7 billion in the same quarter of 2023. For the first nine months of 2024, Reality Labs lost nearly $13 billion, Meta's earnings report said, and the company has warned investors that it expects the division to lose even more money.

"Overall, I'd say Reality Labs is clearly one of our strategic long-term priorities," said Susan Li, Meta's chief financial officer, responding to a question about Reality Labs' losses on the earnings call. She added that Meta expects it to "be an area of significant investment as we build out towards the very ambitious product road map that we have there."

Meta CEO Mark Zuckerberg has remained bullish on the company's VR strategy. On the call, Zuckerberg highlighted the company's strong demand for its Ray-Ban glasses and expressed optimism about Orion, an early prototype of its glasses that superimpose digital elements onto the real world.

"We're not too far off from being able to deliver great-looking glasses that let you seamlessly blend the physical and digital worlds," Zuckerberg said on the earnings call.

Unlike the Meta Horizon app for Quest headsets, Meta View, the app for setting up the Ray-Ban glasses, however, isn't on the App Store's top charts.