Meta and Qualcomm are extending their metaverse chip partnership

The two companies will work together to develop new customized processors for Meta's Quest virtual reality headsets, they said in a news release. The new multi-year deal extends a relationship that dates back seven years, according to the companies.

"These (new) chipsets will help us keep pushing virtual reality to its limits and deliver awesome experiences," Mark Zuckerberg, CEO of Menlo Park-based Meta, said in the announcement.

The new chips will be based on Qualcomm's (Nasdaq:QCOM) Snapdragon extended reality processors. Meta's Quest and Quest 2 virtual reality headsets are both powered by the San Diego company's Snapdragon chips.

The companies didn't disclose the financial terms of their agreement.

Meta's Quest devices are made by what was previously known as its Oculus division. The then-Facebook Inc. acquired Oculus, a pioneer in virtual reality devices, in 2014 for $2 billion.

The deal with Qualcomm comes as Meta (Nasdaq:META) increasingly focuses on virtual- and augmented-reality technologies — the so-called metaverse. Last year, Zuckerberg changed his company's name from Facebook Inc. to emphasize the direction in which he wanted to take it. He chose its new name, Meta Platforms, to show its intent to go beyond traditional social media and create virtual spaces for people and businesses to interact with each other using avatars.

So far though, the company's metaverse effort has been something of a boondoggle. In the second quarter, for example, the company's Reality Labs division, which includes all of its virtual reality hardware and software products and operations, posted an operating loss of $2.8 billion on just $452 million worth of sales. So far this year, the division has lost $5.8 billion on $1.1 billion in revenue.

Last year, Reality Labs lost $10.2 billion on $2.3 billion in sales.