Meta is shutting down the virtual reality version of Horizon Worlds, the social platform that was once the centerpiece of the company’s costly and ultimately unsuccessful pivot to the metaverse, the company announced Tuesday.

The Horizon Worlds app will be removed from the Quest VR headset store at the end of March and fully discontinued on the platform on June 15. After that date, the experience will be available only through a standalone mobile app.

“We are separating the two platforms so each can grow with greater focus, and the Horizon Worlds platform will become a mobile-only experience,” the company said.

The decision marks a significant retreat from an ambition that Mark Zuckerberg, Meta’s chief executive, once described as the defining bet of the company’s next decade. When Meta changed its name from Facebook in October 2021 to signal its commitment to virtual reality, Zuckerberg wrote that he expected the metaverse to reach a billion people within ten years, host hundreds of billions of dollars in digital commerce and support millions of creators and developers. Horizon Worlds never drew more than a few hundred thousand active monthly users.

The shutdown comes weeks after Meta cut more than 1,000 employees from Reality Labs, the division responsible for its metaverse and virtual reality efforts. Among those affected were studios working on virtual reality titles, including Ouro Interactive, an in-house studio created in 2023 specifically to build first-party content for Horizon Worlds.

Reality Labs has posted billions of dollars in operating losses every quarter since its launch. In the fourth quarter of 2025, the unit reported an operating loss of $6.02 billion.

Horizon Worlds officially launched in late 2021 as a virtual, three-dimensional social network where users could interact and play games through avatars, operating exclusively on Quest headsets. Meta introduced a mobile app version in September 2023, designed to lower the barrier to entry for users without VR hardware — functioning, in concept, similarly to Roblox. That expansion failed to meaningfully grow the platform’s audience.

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In a February blog post, Samantha Ryan, vice president of content at Reality Labs, said Meta would shift Horizon Worlds’ focus to “almost exclusively mobile” while doubling down on its broader VR developer ecosystem. “By breaking things down into two distinct platforms, we’ll be better able to clearly focus on each,” Ryan said.

Meta has since redirected its strategic and financial attention toward artificial intelligence, which has become the company’s organizing priority under Zuckerberg — displacing the metaverse vision that defined and ultimately strained the company’s public identity for much of the past four years.

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Meta has signed a 10-year lease for a five-story building at 697 Fifth Avenue in Midtown Manhattan, the company announced, marking its first flagship retail location in New York City and its second Meta Lab experiential store in the United States.

The space, a 15,000-square-foot townhouse adjacent to the St. Regis Hotel, was leased from real estate firm Vornado Realty Trust. It will serve as a hands-on environment where visitors can test the company’s latest hardware — including its Ray-Ban smart glasses and virtual reality headsets — in a setting the company describes as co-created with local artists to reflect the culture of its neighborhood.

The New York store follows Meta Lab in Los Angeles, which opened last year, and recent pop-up activations in Las Vegas and Honolulu. The company said it plans to open between eight and ten additional locations in the coming year, suggesting that physical retail has moved from experiment to strategy for a company that built its identity entirely online.

The push into experiential retail coincides with Meta’s growing focus on wearable technology. The company is planning to release a new smartwatch this year and has been expanding the capabilities of its Ray-Ban smart glasses, which have become one of the more commercially successful early consumer AI hardware products. A flagship store on one of the world’s most expensive and heavily trafficked shopping corridors gives Meta a prominent platform to put those products directly in consumers’ hands.

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Meta already has a significant physical presence in New York — its existing headquarters occupies 730,000 square feet at the Farley Building in the Penn District. The Fifth Avenue flagship is a different kind of footprint: not operational infrastructure, but a public statement about where the company believes consumer technology is headed.

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Meta Platforms reported a 24 percent year-over-year increase in advertising revenue to $58.1 billion in the fourth quarter, fueled by record holiday demand and continued investment in artificial intelligence. Company executives described 2026 as a pivotal year of organizational change, shaped by AI-driven innovation and internal restructuring.

“We are now seeing a major AI acceleration,” Chief Executive Mark Zuckerberg said in prepared remarks. “I expect 2026 to be a year where this wave accelerates even further on several fronts.”

For the quarter ended Dec. 31, overall ad impressions across Meta’s platforms rose 18 percent, while the average price per ad increased 6 percent, reflecting stronger advertiser demand, the company said in its earnings statement.

By the Numbers

• $58.1 billion – Advertising revenue generated in Q4 2025
• $10 billion – Combined revenue run rate from Meta’s AI video generator tools
• 6 percent – Increase in average price per ad during the quarter

Zuckerberg used the earnings call to outline his longer-term AI ambitions, describing possibilities such as generating personalized video games through Meta’s Horizon Worlds platform and sharing them across social networks. But he acknowledged that advertising will remain the company’s dominant growth engine for the foreseeable future.

“We are focused on things beyond ads,” Zuckerberg told investors. “But for the next couple of years, ads are going to be, by far, the most important driver of growth in our business. Even if new initiatives scale quickly, they will take time to be meaningful at the scale of the ads business.”

Behind the scenes, Meta is deploying AI to refine its ad-ranking systems and models that predict user behavior. During the quarter, the company doubled the number of graphics processing units dedicated to training its Generative Ads Recommendation Model. Those improvements contributed to a 3 percent increase in clicks on Facebook and a 1 percent lift in conversions on Instagram, said Chief Financial Officer Susan Li.

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Advertisers are also increasing their use of Meta’s generative AI tools for campaign creation. The company’s AI-powered video generation products reached a combined revenue run rate of $10 billion in the quarter. Growth in those tools outpaced overall advertising revenue growth by nearly threefold on a quarter-over-quarter basis, Li said.

Looking ahead, Meta plans to integrate AI more deeply into commerce through shopping agents that deliver personalized product recommendations.

“Our ads today help businesses find just the right, very specific people who are interested in their products,” Zuckerberg said. “New agentic shopping tools will allow people to find just the right, very specific set of products from the businesses in our catalog.”

Despite the efficiency gains AI promises, the technology remains expensive. Meta reported $22.14 billion in capital expenditures for the fourth quarter and $72.22 billion for the full year. Spending is set to accelerate sharply in 2026, with the company forecasting capital expenditures between $115 billion and $135 billion, largely to support AI development.

At the same time, Zuckerberg suggested that AI could enable leaner operations. “We’re starting to see projects that used to require big teams now be accomplished by a single very talented person,” he said.

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Meta has faced internal growing pains as it reorganizes around AI, including the departure of several senior AI leaders and reported tensions between newer AI-focused units and the rest of the company.

Still, the fourth-quarter results underscored the continued strength of Meta’s core advertising business—even as it bets heavily on an AI-powered future.

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Meta is developing a new generation of artificial intelligence models designed for image, video, and text applications, with plans to release them in the first half of 2026, according to a report by The Wall Street Journal.

The effort is being led by Meta’s recently formed Superintelligence Lab, overseen by Alexandr Wang, the co-founder of Scale AI, whom Meta recruited to help accelerate its AI ambitions. Internally, the company is working on an image-and-video model codenamed Mango, alongside a text-based system known as Avocado, the report said.

The roadmap was outlined during an internal question-and-answer session at Meta this week, where Wang appeared alongside Chris Cox, the company’s chief product officer. According to the report, Meta intends to improve its text models’ coding capabilities while also developing so-called world models—systems designed to understand visual information and reason, plan, and act without being explicitly trained on every possible scenario.

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The push comes as Meta attempts to reassert itself in an AI race increasingly dominated by rivals such as OpenAI, Anthropic, and Google. While Meta was once seen as a leader in open research, it has struggled to translate that work into widely recognized AI products.

The company’s AI organization has undergone repeated restructurings over the past year, including leadership changes and aggressive recruitment from competing labs. Some of those hires, however, have already departed Meta’s Superintelligence Lab, underscoring the difficulty of stabilizing a top-tier research team.

Adding to the uncertainty, Yann LeCun, Meta’s longtime chief AI scientist, announced last month that he plans to leave the company to start his own venture—raising further questions about continuity at a critical moment.

So far, Meta has yet to produce a breakout AI product. Its Meta AI assistant reaches a massive audience largely because it is embedded directly into the company’s social platforms, rather than through independent demand. That distribution advantage masks a more basic challenge: proving that Meta can deliver AI systems that compete on capability, not just reach.

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As a result, the first models to emerge from the Superintelligence Lab will carry unusually high expectations. For Meta, they are not just another product cycle—they are a test of whether the company can still shape the direction of artificial intelligence, rather than merely follow it.

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