Ten years later, Facebook's Oculus acquisition hasn't changed the world as expected | TechSwitch

Every 12 months, Time Magazine points an inventory of the 200 finest innovations of the previous 12 months. Frankly, I don’t know the way the editors do it. The soiled secret of this job is that true, game-changing innovations hardly ever cross your desk. In truth, you’re terribly fortunate in the event you common one a 12 months.
Oculus’ Rift prototype felt like simply such a tool when it first crossed my radar greater than a decade in the past. More than something, the system resembled a swiftly duct-taped ski masks. It was a outstanding presentation, in hindsight — an all-too-rare glimpse right into a plucky entrepreneurial tech spirit. It evokes a flood of romanticized photographs of Homebrew Computer Club nerds soldering collectively circuit boards in South Bay garages.
A decade has now handed since Meta (née Facebook) introduced plans to accumulate the startup for $2 billion. A decade after the deal was introduced, it’s secure to say that the VR headset hasn’t modified the world we stay in. But there’s at all times that little-discussed center floor between remodeling the human situation and simply being an abject dumpster fireplace of failure. So, the place, as of April 2024, does the Facebook/Oculus deal rank?
“Immersive gaming will be the first, and Oculus already has big plans here that won’t be changing and we hope to accelerate,” Mark Zuckerberg wrote on the time. “After games, we’re going to make Oculus a platform for many other experiences. Imagine enjoying a court side seat at a game, studying in a classroom of students and teachers all over the world or consulting with a doctor face-to-face — just by putting on goggles in your home.”
Image Credits: David Fitzgerald/Sportsfile / Getty Images
Facebook’s founder referred to the Oculus Rift as a “new communication platform,” evaluating it to computer systems, the web and smartphones earlier than it. He prompt that the “dream of science fiction” was now a actuality — one which Facebook had instantly cornered. It’s arduous to overstate how transformative Zuckerberg believed the expertise to be. It was, in any case, the gateway to the metaverse.
Should anybody doubt the corporate’s dedication to the idea, in late 2021, it rebranded itself as “Meta,” killing off the Oculus model the identical afternoon. Surely social media platforms wouldn’t dominate on-line discourse perpetually. They would finally give approach to one thing wholly new. Except that regardless of that $500 billion rebrand, Zuckerberg and firm by no means did a very good job of defining the metaverse. They merely insisted that it was an thrilling factor that you need to be enthusiastic about.
Image Credits: Facebook
I think that had been you to carry out a blind ballot, the vast majority of people who find themselves acquainted with the time period meta would describe one thing like Second Life, the digital world that to be on its fifth or sixth life by now. Mark Zuckerberg might be as responsible as any single particular person for perpetuating that notion, fortunately working his hardest to make the corporate’s Horizon Worlds platform synonymous with conceptions of the metaverse. Remember what an enormous deal it was when its avatars lastly bought legs?
So the place are we now? It’s sophisticated, clearly. From a purely monetary standpoint (the one language shareholders converse), issues are bleak. Between the top of 2020 and the primary quarter of 2024, the corporate’s metaverse division misplaced $42 billion. That’s roughly 21x the value it paid for Oculus, not adjusting for inflation. That’s a little bit over one-fourth a Zuckerberg (not adjusted for inflation — i.e., BJJ-related bulking).
Why is Meta hemorrhaging that a lot cash? The easy and cynical reply is, as a result of it may possibly. The company made $134 billion in income and $39.1 billion in web revenue final 12 months. That’s to not say that having a division that’s $42 billion within the pink over 4 years doesn’t influence its backside line, after all. But Facebook believes it’s enjoying the lengthy sport right here.
Image Credits: Brian Heater
It’s broadly believed that Meta sells its Quest headsets at a loss. This is even supposing the corporate has simply the most effective manufacturing scale within the business. It doesn’t take an MBA to grasp that this can be a horrible short-term technique, however once more, Meta believes it’s enjoying the lengthy sport. The finish sport is getting sufficient of those gadgets into individuals’s arms to achieve a essential mass of adoption, phrase of mouth and developer content material. If you possibly can’t try this whereas turning a revenue, nicely, you gotta spend cash to earn cash, proper?
It continues to be an enormous wager. How lengthy the corporate is prepared to play the lengthy sport right here, nevertheless, largely comes all the way down to how a lot endurance Meta’s shareholders have. If it may possibly really saturate the market and nook content material, it will likely be higher positioned to capitalize on combined actuality’s hypothetical exponential development.
It has already edged the competitors out of the market and usually sucked the air out of the room. As an HTC Vive exec informed me again in February at MWC, “I think Meta has adjusted the market perception of what this technology should cost.” Other firms can’t compete on worth and content material within the buyer area, so the savviest of the bunch have moved over to enterprise, the place shoppers have a lot deeper pockets.
If you decide the corporate’s journey in phrases how a lot of the VR headset promote it controls, it’s been a wild and unprecedented success. According to IDC, Meta had a 50.2% share as of Q2 2023. Of course, we’re not speaking about smartphone figures right here. As of early 2023, Meta was estimated to have offered 20 million headsets. At the top of the 12 months, the Quest 2 was nonetheless outselling the Quest 3. One a part of the Meta thesis has completely performed out: People are on the lookout for a cheap on-ramp to the expertise.
Image Credits: Brian Heater
When Apple introduced the Vision Pro at WWDC 2024, I obtained a flood of unsolicited feedback from VR headset producers all stating they noticed the iPhone maker’s headset as validation for the area. You can cynically (and accurately) level out that everybody says some model of that when Apple enters their vertical, and plenty of of them don’t make it out the opposite facet in a single piece.
But I concur that Apple throwing its hat within the ring after a long time of failed VR makes an attempt does represent validation. That’s completely the case for Meta. Zuckerberg fortunately used the chance to level out that his headsets had been (1) considerably cheaper and (2) didn’t require an exterior battery. Meta additionally had a big head begin when it comes to VR-specific content material. Naturally, Zuckerberg additionally insisted that his product was vastly superior despite the considerably cheaper price level.
“It seems like there are a lot of people who just assumed that Vision Pro would be higher quality because it’s Apple and it costs $3,000 more,” he famous in February, “but honestly, I’m pretty surprised that Quest is so much better for the vast majority of things that people use these headsets for, with that price differential.”
Sorry, Zuck, the Vision Pro is the extra spectacular piece of expertise. Whether it’s $3,000 extra spectacular is a unique dialog. What I can inform you proper now’s that the pricing gulf places these merchandise into totally different classes. Apple is concentrating on enterprise clients at that worth level, whereas Meta is way extra dedicated to democratizing entry by — once more — shedding cash on a per-unit foundation.
It’s nonetheless early days for Vision Pro — and, actually, combined actuality normally. If it ever does really turn into ubiquitous, it will likely be the results of numerous hard-fought battles. As we mark a decade for the reason that Oculus acquisition, I discover myself returning to the above Zuckerberg remark: “Imagine enjoying a courtside seat at a game, studying in a classroom of students and teachers all over the world or consulting with a doctor face-to-face — just by putting on goggles in your home.”
Re-reading this from the vantage level of 2024, it strikes me that he was proper concerning the content material, however not essentially the supply mechanism. The previous 4 years have dramatically impacted how we work together with one another, the world and day-to-day actions. The pandemic de-stigmatized so many digital actions. But in the interim, no headsets are required.