Meta is reportedly planning to slash as much as 30% of its metaverse budget — a major blow to the grand vision of digital realms built during the early-2020s boom.

From Virtual Worlds to Reality Check

• Meta, which rebranded from Facebook in 2021 to underscore its metaverse ambitions, poured billions into augmented- and virtual-reality via its division Reality Labs — investing heavily in hardware, software, and immersive experiences like Horizon Worlds, its VR social world, and the Meta Quest line of headsets. The Economic Times+2www.ndtv.com+2

• The results, however, have repeatedly fallen short of expectations. Despite more than US$60 billion reportedly spent since 2020, uptake has been limited and consumer excitement waned. Investing.com+2Business Standard+2

The decision to cut the metaverse budget sharply appears to signal an acknowledgment that the early optimism may have been misguided.

What the Budget Cuts Mean

• A Shift in Strategic Priorities

The cuts reflect a pivot: Meta reportedly plans to reallocate resources towards AI-driven wearables and smart glasses — areas within Reality Labs perceived to have stronger growth potential. Fortune+2India Today+2

• Reality Labs (VR/AR Hardware & Software) To Bear the Brunt

Most reductions are expected to impact VR hardware and software — including Horizon Worlds, Meta Quest, and similar metaverse-centric products. www.ndtv.com+2Fortune+2

• Job Cuts Possible as Early as January 2026

The budget review reportedly includes layoffs in early 2026 for teams working on metaverse projects. Investing.com+2www.ndtv.com+2

• Investor Reaction: Some Approval, Mixed Outlook

Meta’s stock rose ~4% on the news, indicating some investor optimism that Meta might finally show discipline and refocus on more promising, revenue-driving initiatives.

Bigger Picture: Is the “Metaverse” Over?

The move may mark the end of the first wave of metaverse hype — where virtual reality, avatars, and immersive worlds were sold as the “next frontier.” The lukewarm reception, weak adoption for social VR, and the steep cost of developing the ecosystem without matching returns likely forced Meta to reconsider.

Meta’s strategic realignment suggests that the future may not lie in fully immersive virtual worlds, but rather in AI-powered wearables, AR glasses, and hybrid devices that more subtly integrate the digital and physical — rather than replace one with the other. TechCrunch+2mint+2

Still, this does not necessarily mean the “metaverse” is dead. Rather, we may see a scaled-down, more pragmatic version — focused on what delivers value to users and revenue to companies.

The Road Ahead: What to Watch

• Will Meta truly reallocate the saved capital into AI-driven wearables and smart glasses — and will that pay off better than VR/AR?

• How will competitors react? Might other companies double down on metaverse hardware/software if Meta pulls back — or follow suit and refocus?

• For creators and developers: is this the end of big-budget, big-studio VR games and social worlds — or will indie and niche development rise to fill the gap?

• For users: will the next phase of “digital living” be less about immersive worlds and more about seamless integrations via AR, AI, and wearable devices?

Conclusion

The reported 30% metaverse budget cut by Meta — as part of its 2026 planning — reflects a sober reevaluation of the company’s VR/AR ambitions. For many, it marks a turning point: not necessarily the end of immersive tech, but a shift toward realism, pragmatism, and — above all — sustainable technology combining artificial intelligence, wearables, and augmented reality.