Pixel P&L: Meta Keeps Losing Billions on VR

Welcome to another Pixel P&L edition. This issue takes 4 minutes to read.

If you only have one, here are the 5 most important things:

• Meta's Reality Labs hemorrhages another $4.5 billion as the metaverse dream continues burning cash.

• Working professionals now represent a large portion of India's gaming audience.

• China plans to field a national esports football team for FIFA tournaments.

• Linux quietly steals market share from Windows among PC gamers, thanks to Steam Deck's surprising impact.

• Valve publicly contradicts Mastercard's denial about pressuring platforms over adult content.

Let's get into it.

Meta's Metaverse Division Reality Labs Loses $4.5 Billion in Q2

Meta Platforms’ Reality Labs division, the company's metaverse and virtual reality unit, posted a $4.5 billion operating loss in the second quarter, a slight increase from the $4.4 billion loss in the same period last year, as the ambitious project continues burning through cash.

Reality Labs, which develops Meta's Quest VR headsets and AI glasses, generated $370 million in revenue, a 5% year-over-year increase driven by AI glasses sales that partially offset declining Quest headset demand. Operating expenses rose 1% to $4.9 billion, primarily due to higher technology development costs.

Reality Labs has now lost $8.7 billion in the first half of fiscal 2025, adding to cumulative losses exceeding $47 billion since 2022. The division lost $17.7 billion in 2024 alone.

Chief Executive Mark Zuckerberg has framed Reality Labs as a long-term investment requiring improved distribution and efficiency, though Chief Financial Officer Susan Li warned losses will increase in 2025 as Meta accelerates AI glasses adoption. The company recently laid off over 100 Reality Labs employees amid broader workforce reductions.

Working Professionals Drive India's Gaming Growth as Demographics Shift

India's gaming landscape is undergoing a demographic transformation as working professionals increasingly dominate the player base, challenging traditional perceptions of gaming as a student pastime.

More than 35% of Indian gamers are now working professionals, including engineers, marketers and entrepreneurs, according to a survey of nearly 6,000 players by gaming electronics brand Kreo. The shift reflects gaming's evolution from recreational activity to mainstream entertainment across age groups.

Women over 35 represent one of the fastest-growing segments, though female participation faces obstacles. While men comprise 94% of players historically, women's engagement is rising after age 35. However, 73% of female gamers report hiding their gender online due to harassment experiences.

Gaming ambitions are expanding beyond entertainment. Over half of surveyed players expressed interest in building careers in content creation or esports, with 53% actively pursuing content creation. Nearly one in five have participated in competitive esports tournaments.

Mobile devices remain the primary gaming platform, with 88% of players using smartphones, often alongside other devices.

⚡️Quick Bytes

China Plans National Esports Football Team

The Chinese Football Association announced plans to establish a national esports football team to compete in FIFA and Asian Football Confederation tournaments. The association sought cooperation zones to provide training venues, event management capabilities and funding, with applications due by July 29th. The move reflects China's push to expand its presence in competitive gaming.

Linux Gains Ground Against Windows in PC Gaming

Linux is slowly gaining market share among PC gamers as Windows' dominance shows signs of erosion, according to Valve's July Steam survey. Linux captured 2.89% of Steam's user base, representing roughly 4 million gamers, while Windows dropped 0.44 percentage points. The shift is partly driven by Valve's Steam Deck handheld and upcoming SteamOS desktop releases.

Valve Disputes Mastercard's Adult Content Claims

Valve contradicted Mastercard's denial that it pressured gaming platforms over adult content. The Steam operator said Mastercard communicated concerns through payment processors, citing rules against "brand-damaging transactions." Mastercard had claimed it only restricts illegal content, not lawful purchases on its network.

⚔️Side Quest

📺 Watch: This analysis of video game comic book collectibles reveals an emerging investment market worth watching. The video demonstrates how scarcity and passionate fanbases drive significant value for first appearances and rare variants, with examples reaching thousands of dollars. As more gaming IPs transition to film/TV, this "untapped" collectibles market offers valuable insights into franchise monetization beyond traditional media.

🎮 Play: Against the Storm at 50% off. A polished city management game where you build temporary settlements in an endless forest. Matches last 30-60 minutes, blending exploration through chopping trees with supply chain building. While RNG can frustrate and repetition sets in after seeing all content, its distinctive gameplay loop and lack of long-term commitment make it refreshingly different from traditional city builders.

📚 Read: Graham Smith's farewell essay from Rock Paper Shotgun. After twelve years, he distills his editorial philosophy into essential principles for games criticism: prioritize games you can play now over future promises, treat all games equally regardless of budget, focus on persuasion over discovery, and trust readers with honest feelings rather than false objectivity. Sharp insights on avoiding marketing stenography and maintaining critical independence.

💡Did You Know

Australian serial killer Ivan Milat staged a nine-day hunger strike in 2011 after being denied a PlayStation console in his maximum security cell. The 66-year-old claimed he needed it to "exercise his mind." He lost 25kg (55lbs) before abandoning his protest, with the prison commissioner noting he "likes his food too much" to sustain it.

📜 Quote of the Day

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