According to The Verge, Meta may cut its Reality Labs budget by up to 30% and has delayed future headsets, leading to proclamations that VR is dead. However, in November 2024 alone, Meta sold at least 120,000 Quest headsets on Amazon, outselling major consoles, thanks partly to a $250 Black Friday price. The free-to-play game Gorilla Tag hit over 10 million total players and $100 million in revenue by June 2024, with 1 million daily active users. Venture Reality Fund’s Tipatat Chennavasin says the core audience is now “mostly Gen Alpha,” or kids 15 and younger, a shift Meta’s Chris Pruett confirmed after seeing a 6x activation spike at Christmas 2024. This new demographic fueled games like Animal Company to quadruple its user base to 1 million monthly users by March 2025 after the holiday.
The real VR audience isn’t who you think
Here’s the thing: the entire tech industry has been building for an audience that doesn’t really exist at scale. They imagined hip professionals collaborating in Spatial’s virtual offices or affluent early adopters dropping $3,500 on an Apple Vision Pro. But that market? It’s tiny. The real action is with kids who just want to mess around in Gorilla Tag or Animal Company. These aren’t the users buying $60 premium games; they’re playing free-to-play titles where the monetization is subtle and social.
Why the panic is understandable but misguided
Look, the doom headlines aren’t coming from nowhere. When you see Meta cutting budgets and studios like Phaser Lock Interactive shutting down, it paints a grim picture. And for the high-end, “metaverse-for-work” vision? It basically is dead. That’s why the reported cuts to Horizon Worlds make sense. But conflating the failure of that specific, adult-oriented, productivity-focused dream with the death of the entire VR medium is a huge mistake. It’s like saying “gaming is dead” because a few AAA studios closed, while ignoring the billions being made in mobile games.
The risks of a kid-dominated market
So VR is saved, right? It’s just the kids’ domain now. Well, not so fast. Relying on a young, fickle audience that has little disposable income is incredibly risky. These users demand cheap hardware—hence the success of the $300 Quest 3s—and free software. Can you build a sustainable hardware business on that? Meta has been subsidizing headsets for years, and if those reports about stopping subsidies are true, the entire price equation changes. Furthermore, designing for kids brings a whole host of challenges around safety, moderation, and privacy that the industry is still woefully unprepared for.
Where do we go from here?
The path forward is a split one. The high-end, immersive computing future for professionals will continue to creep along with devices like the Vision Pro. But the volume play, the real growth engine, is with this young audience. The companies that win will be the ones that stop fighting this reality. They need to build affordable, durable hardware and cultivate platforms for social, free-to-play experiences. Ignoring this shift, as the article warns, is done at their own peril. VR isn’t the metaverse we were sold. It’s a playground. And maybe that’s okay.
