I announced the acquisition of Oculus ten years ago, through Facebook.
Ten years ago, a substantial undertaking was initiated by Facebook. Presently, we have only scratched the surface of VR and AR after a decade of progress. Let’s reflect on the journey so far.
Facebook announced on March 25, 2014, that it had purchased Oculus, a startup that specializes in virtual reality (VR) technology. The purchase price for Facebook was three billion US dollars.
A great deal of events has occurred since that time. The initial endeavor to become widely accepted did not succeed: in 2020, Meta mostly gave up on its PC VR business and Oculus Rift brand, and instead concentrated on standalone VR headsets. Looking back, it was the correct choice: Meta Quest has been purchased in almost 20 million units (as of February 2023) and, for the first time, established a VR system that various studios and developers can depend on for sustenance. It is difficult to envision where virtual reality would be currently if it weren’t for the impact of Facebook.
Oculus is (mostly) history
The company made a strong commitment, even changing its name to Meta in 2021 to emphasize its metaverse vision. At the same time, it discontinued the use of the Oculus brand, which is still widely associated with virtual reality. The product Oculus Quest is now called Meta Quest. Today, the Oculus brand only exists in Meta’s software initiatives, such as Oculus Studios (Meta’s VR studios) and Oculus Publishing (Meta’s VR publisher). The last of the founders of Oculus left Facebook in 2019.
Reality Labs, which is Meta’s VR and AR division, is still losing money after ten years. Although Meta broke the $1 billion revenue mark for the first time in the fourth quarter of 2023, the losses are many times greater. In total, Mark Zuckerberg has invested well over $50 billion in his Metaverse vision over the past decade. More than half of that has gone into developing AR technology. This fall, Meta may finally unveil what it has been working on all these years.
Apple enters the ring
Meta now has a quasi-monopoly on the VR market. This is the dark side of the VR success story of the past few years. Meta has created unrealistic price expectations through aggressive subsidization and driven competitors out of the market. Because the Meta Quest ecosystem is the lifeblood of the industry, the majority of studios are dependent on Meta’s goodwill, a power that can be abused by Meta.
A few weeks prior to the Oculus acquisition’s tenth anniversary, an event occurred that, upon reflection, could be seen as equally significant: Apple made its entry into the VR market. The company has a significant amount of ground to cover, and it is uncertain to what extent it truly intends to invest in this category, especially if it encounters significant challenges. There is a possibility that virtual reality could continue to be a financially unprofitable industry for both Meta and Apple for the next ten years.
The important thing is that Meta gets a serious competitor with a strong vision of its own, and from what we’ve seen of Vision Pro so far, Apple could fill that role perfectly.
