Ten years later, Facebook’s acquisition of Oculus hasn’t changed the world as expected | TechCrunch

every year, time The magazine has published a list of the 200 best inventions of the past 12 months. Frankly, I don’t know how editors do it. The dirty secret of the job is that real, game-changing inventions rarely cross your desk. In fact, if you average once a year, you’re very lucky.

When Oculus’ Rift prototype first came into view more than a decade ago, it felt like such a device to me. Most importantly, the system resembles a hastily taped-on ski mask. In hindsight, it was a remarkable display—a fantastic one. – A rare glimpse into the brave entrepreneurial tech spirit. It conjures up romantic images of homebrew computer club nerds soldering circuit boards in South Bay garages.

So much time has passed since Meta (formerly known as Facebook) announced plans Acquired the startup for $2 billion. Ten years after the deal was announced, it’s safe to say that VR headsets haven’t changed the world we live in. But there is always a little-discussed middle ground between changing the human condition and merely changing the human condition. So, where does the Facebook-Oculus deal rank as of April 2024?

Mark Zuckerberg wrote at the time: “Immersive gaming will be a top priority, Oculus has big plans that won’t change, and we want to move faster. After gaming, we’ll make Oculus a platform for many people.” Other experiences. Imagine sitting in a courtside seat at a game, studying in a classroom with students and teachers around the world, or consulting with a doctor face-to-face—just by wearing goggles at home.”

Image Source: David Fitzgerald/Sportsfile/Getty Images

Facebook’s founder calls Oculus Rift a “new communications platform” and compares it to computers, the internet and smartphones before it. He said the “science fiction dream” was now a reality, and Facebook was suddenly cornering it. It’s hard to overstate how transformative Zuckerberg believes this technology is. After all, it is a portal to a virtual universe.

If anyone doubted the company’s commitment to the concept, at the end of 2021, Renamed himself “Meta” strangle Oculus brand The same afternoon. Of course, social media platforms won’t dominate online discussions forever. They will eventually be replaced by something entirely new. despite this, A $500 billion rebrandZuckerberg and company have never done a particularly good job of defining Metaverse. They just insist that this is an exciting thing and you should be excited about it.

Mark Zuckerberg avatar

Image Source: Facebook

I suspect that if you took a blind poll, most people familiar with the word “meta” would describe something like Second Life, the virtual world now in its fifth or sixth life. Mark Zuckerberg is probably just as culpable as anyone who perpetuates this notion, happily doing his best to make the company’s Horizon Worlds platform synonymous with the Metaverse concept.Remember what a big deal this is when its incarnation finally appears Have legs?

So where are we now? Obviously, the situation is complicated. From a purely financial perspective (the only language shareholders speak), the picture is bleak. From the end of 2020 to the first quarter of 2024, the company’s Metaverse unit lost $42 billion. That’s about 21 times the price of an Oculus (not accounting for inflation) and just over a quarter of Zuckerberg’s price (not accounting for inflation, the BJJ-related bloat).

Why did Meta lose so much money? The simple and cynical answer is, because it can. The company had revenue of $134 billion last year and net profit of $39.1 billion. That’s not to say that having a division that lost $42 billion for four years won’t hurt its bottom line. But Facebook believes it is playing a long game.

Meta Quest 3 and Apple Vision Pro headphones

Image Source: Brian Hitt

It is generally believed that Meta Selling Quest headphones at a lossAlthough the company easily has the best manufacturing scale in the industry, it doesn’t take an MBA to understand that this is a poor short-term strategy, but Meta again believes it is playing the long-term game. It’s about getting enough of these devices into people’s hands to achieve critical mass of adoption, word-of-mouth, and developer content. If you can’t do that while making a profit, then you have to spend money to make money, right?

It’s still a huge bet. However, how long the company is willing to play the long game here depends largely on how patient Meta’s shareholders are. If it can truly saturate the market and monopolize content, it will be better positioned to take advantage of mixed reality’s supposed exponential growth.

It has pushed competitors out of business and generally sucked the air out of the room.As an HTC Vive executive tell me Back at MWC in February, “I think Meta has adjusted the market’s view on the cost of this technology.” Other companies can’t compete on price and content in the customer space, so the smartest companies have turned to enterprise, customers with deep pockets The place.

If you judge the company’s history by the share of the VR headset market it controls, you’ll see that it’s been a huge, unprecedented success. According to IDC, Meta has been a huge success. 50.2% share As of Q2 2023. Of course, we’re not talking about smartphone data here. As of early 2023, Meta estimates that it has sold 20 million headphones. By the end of the year, Quest 2 still outsold Quest 3. Part of the meta-thesis has been fully realized: people are looking for a cheap entry into technology.

Image Source: Brian Hitt

When Apple announced the Vision Pro at WWDC 2024, I received a ton of unsolicited comments from VR headset makers, all of whom said they saw the iPhone maker’s headset as validation for the field. You could ironically (and rightly) point out that everyone said some version of Apple when it entered their vertical, and many of them never came out intact on the other side.

But I agree that Apple jumping into the competition after decades of failed VR attempts does constitute validation. This is definitely the case for Meta. Zuckerberg happily used the opportunity to point out that his headphones are (1) significantly cheaper and (2) require no external batteries. Meta also has a big lead in VR-specific content. Of course, Zuckerberg also insists that his product is far superior, despite its significantly lower price tag.

“There seemed to be a lot of people who just thought the Vision Pro would be of higher quality because it’s Apple and costs $3,000 more,” he noted in February. “But honestly, I’m surprised that the quality of the Quest is so much better. For most of the things people use these headphones for, there’s that price difference.”

Sorry Zach, Vision Pro is the more impressive technology. Whether $3,000 is more impressive is another matter. What I can tell you right now is that there is a pricing divide that separates these products into different categories. Apple is targeting business customers at this price point, while Meta is more focused on democratizing access through loss per unit.

It’s still early days for Vision Pro and, really, early days for mixed reality in general. If it does become ubiquitous, it will be the result of countless hard battles. As we mark the 10th anniversary of the Oculus acquisition, I find myself returning to Zuckerberg’s comments above: “Imagine sitting courtside at a game, learning in classrooms with students and teachers around the world, or face-to-face Talk to your doctor – just wear goggles at home.”

Re-reading the article from the perspective of 2024, I see that he is right about the content, but not necessarily the delivery mechanism. The past four years have dramatically impacted the way we interact with each other, the world, and on a daily basis. Daytime activities. The pandemic has de-stigmatized many virtual events. But no headphones are needed at this time.

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