Meta debuts $299 Meta Quest 3S mixed-reality headset

Meta (META) is rolling out a new, less expensive version of its pricey Meta Quest 3 mixed-reality headset. Unveiled during the company’s annual Meta Connect event, the Meta Quest 3S offers the same functionality as the Meta Quest 3 with a starting price of $299. Meta is also dropping the price of the Quest 3 from a whopping $649 to $499.

The Quest 3S sports the same full-color mixed-reality capabilities as the Quest 3, albeit with a narrower field of view and a different overall design. Meta says the Quest 3S also runs on the same Qualcomm (QCOM) Snapdragon XR2 gen. 2 chip found in the Quest 3.

As the company rolls out the Quest 3S, it’s also doing away with its older Quest 2 and pricier Quest Pro headsets.

Meta is positioning the Quest 3S as its entry-level headset for consumers who are just getting into mixed-reality apps and those looking to upgrade from older Quest models. The Quest 3, then, is geared toward consumers who are already mixed-reality fans and are willing to shell out the cash for Meta’s top-of-the-line features.

Meta says the Quest 3S is compatible with the company’s entire library of apps and games and will support upcoming titles like “Batman: Arkham Shadow.”

Meta, however, isn’t the only name in the headset business. Apple (AAPL) also sells its Vision Pro mixed-reality device, though, at $3,499, it’s far more expensive than Meta’s offerings. Apple hasn’t provided insights into the device’s sales performance.

Mixed-reality headset sales have faced a tough road as of late. According to IDC, worldwide shipments of augmented and virtual reality headsets fell as much as 28% year over year in the second quarter to 1.1 million units.

“In recent quarters, mixed reality (MR) headsets took a leap forward in fidelity, first with the launch of the Quest 3 and later the Vision Pro,” Jitesh Ubrani, research manager for IDC’s Worldwide Mobile Device Trackers, wrote in a release.

“However, the lack of affordable options has meant that few consumers have experienced this new technology.”

But the Meta Quest 3S could start to turn the tide thanks to its relatively low price point. IDC said headset shipments are expected to increase from 6.7 million units in 2024 to 22.9 million in 2028.

While that’s a solid improvement for the headset business, it’s still a far cry from the hundreds of millions of smartphones sold each year. Headsets also have to contend with strong competition from the gaming industry, including from console makers like Nintendo (NTDOY), which is expected to launch its next-generation console in 2025, and Sony (SONY), which is preparing to ship a high-powered version of its PlayStation 5 this fall.

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Meta is also struggling to make a profit from its vast augmented reality investments. The company recorded a $16 billion loss in the segment for 2023, up from $13.7 billion in 2022, and expects that to increase in 2024.

Still, as the leader in the mixed-reality space, Meta could be the company to truly push the industry forward. It’ll just take time.

Email Daniel Howley at dhowley@yahoofinance.com. Follow him on Twitter at @DanielHowley.

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