Facebook’s parent company has unveiled its latest virtual reality device, signalling a continued commitment to building an avatar-filled “metaverse” while seeking to grab attention ahead of rival Apple’s anticipated headset launch next week. 

In a video posted on his Instagram account on Thursday, Meta chief executive Mark Zuckerberg teased the new Quest 3 product, which will go on sale in the autumn. It features both virtual and augmented reality technologies — known as “mixed reality” — allowing users to interact in fully digital environments, as well as graphics overlaid on to the real world.

Zuckerberg called it Meta’s “most powerful headset yet”, with 40 per cent slimmer hardware and double the graphics performance.

Meta’s reveal represents an effort to offer consumers an affordable device before Apple unveils its latest product next Monday at the iPhone maker’s annual developer conference.

While Apple’s headset is expected to cost about $3,000, the Quest 3 will be sold for $499. The price of the Quest 2 model will be lowered $100 to $299.

“Speculation about Apple’s expected entry into the VR market [is] dominating tech discourse, and Meta is clearly keen to remind everyone about its credentials in the space,” said Leo Gebbie, an analyst at CCS Insight, a tech consultancy. “[Meta] will be keen to stamp its authority in the face of new competition.”

The latest iteration of its Quest headset reinforces the company’s desire to lead on the so-called metaverse — virtual worlds where users interact with each other online.

But Meta has also sought to allay shareholder frustration over the more than $10bn a year it is spending to develop its metaverse ambitions. It has initiated widespread lay-offs as part of a cost-cutting drive that Zuckerberg has described as its “year of efficiency”.

Meta’s share price jumped 2 per cent in early trading.

The tech group sells nearly 80 per cent of all VR and AR headsets, but the market itself is relatively small compared to smartphones, PCs or games consoles, with fewer than 9mn units sold last year, according to IDC. 

The company’s Reality Labs unit, which includes sales of headsets, accounts for just under 2 per cent of Meta’s total revenue of $117bn last year.

Meta’s new device is lighter with improved resolution and performance, driven by a new Qualcomm computer chip dedicated to mixed reality. Apple is expected to use its own custom chips to power its device. 

The Quest 3 will offer improved “pass-through” features — the ability to switch between the real world and virtual space while wearing the headset, seamlessly and in colour. The Quest 2 only offers blurry footage of the real world in black and white.

However, the Quest 3 does not appear to contain the ability to track eye movements, a feature that is in Sony’s latest VR headset, which adjusts the screen based on where a player is looking.

Meta has been exploring ways to build out its augmented reality experiences, including through a multiyear agreement with start-up Magic Leap. 

Additional reporting by Tim Bradshaw

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