Meta CEO Mark Zuckerberg wearing Quest 3.

Meta Platforms CEO Mark Zuckerberg, on Thursday, revealed the company's next-generation mixed reality headset, the Quest 3, as it braces for Apple to potentially reshape the nascent market that Meta has dominated so far.

Priced starting at $499, the device will be 40% thinner than the company's previous headset and feature colour mixed reality, which combines augmented and virtual reality (AR/VR) elements, Zuckerberg said in an Instagram post.

The Quest 3 also will have a new Qualcomm chipset with twice the graphics performance, Zuckerberg said. He said the device would launch in the autumn and promised more details at the company's annual AR/VR conference on Sept. 27.

Zuckerberg's announcement came less than a week before tech rival Apple was expected to unveil its first mixed reality device.

Meta's devices comprised nearly 80% of the 8.8 million virtual reality headsets sold in 2022, according to an estimate by market research firm, IDC.

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Far behind in second place at 10% market share was the Pico device by Chinese-owned ByteDance, which also owns social media competitor, TikTok.

Still, despite its dominance, Meta has struggled to sell its vision of an immersive "metaverse" of interconnected virtual worlds and expand the market for its devices beyond the niche of the gaming community.

In March, Meta cut the prices of most of its existing Quest headsets in hopes of stirring demand, after raising the price of its entry-level Quest 2 128 GB version in July 2022.

Its high-end Meta Quest Pro now retails for about $1,000, down from a launch price of $1,500, and the Quest 2's 256 GB version now starts at about $430, down from $500.

The company said, on Thursday, that it would lower the Quest 2 prices once again starting June 4, with the entry-level device dropping back to its original price tag of $300 and the 256-GB version falling to $350.

Revenue from its Reality Labs segments, which includes headset sales, declined 50% in the most recent quarter compared to the year prior.

Published on June 2, 2023