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Meta today announced its third quarter earnings, revealing that revenue of its Reality Labs XR division dropped to its lowest point on record, just ahead of the launch of Quest 3. All eyes are now on the holiday season to see if Meta’s new hardware will move the needle.

Meta announced the latest Reality Labs revenue figures today during its Q3 earnings call. While the division had shown strong performance when Quest 2 was the company’s hot new product, revenue has fallen on average as the headset has aged. That led Reality Labs’ Q3 2023 revenue to drop to $210 million, and a loss of 27% year-over-year. That’s the lowest point on record since Meta began divulging Reality Labs revenue in Q4 2020.

Due to Meta’s significant ongoing investments in Reality Labs, the division overall lost a whopping $3.74 billion in Q3 2023, continuing the trend of significant losses over the last 12 quarters. Meta has previously warned investors that these major investment expenses may not pay off until the 2030s.

Next quarter ought to see a significant revenue boost for Reality Labs thanks to a combination of new hardware and the holiday shopping season.

Quest 3 and Meta’s new Ray-Ban smartglasses launched just after the end of Q3. That means we won’t begin to see the impact of those new products on revenue until the company’s Q4 earnings announcement.

Historically, the Q4 holiday quarter has been the best performer for Reality Labs, and it’ll be interesting to see if Q4 2023 can top the division’s revenue record of $877 million in Q4 2022.

As for comments on the call, Meta executives didn’t have much to share at this point about the performance of the launch of Quest 3 or the Ray-Ban smartglasses. They didn’t offer much more than saying only that initial reviews were positive and they are happy with the launch of the new products, and excited to have them on the market on the leadup to the holidays.