Facebook has consistently remained one of the most popular social media platforms. The latest earnings reports from Facebook have highlighted a focus on VR (Virtual Reality) and AR (Augmented Reality), with predictions stating that these technologies will unlock substantial value in both people’s lives and the overall economy.
According to various sources, the company has been exclusively focused on virtual reality and augmented reality. Additionally, Facebook has been acquiring small virtual reality workshops over the years. This acquisition strategy suggests Facebook’s long-term commitment to establishing dominance in the field of virtual reality. It also reflects the company’s preparation to assert its value in the evolving landscape of both VR and AR.
Facebook’s Threshold in VR World
Over time, Facebook has built a solid foundation and a robust structure in modern technology and design skills by acquiring existing virtual reality software and hardware businesses, following Facebook’s traditional approach. After acquiring Oculus Virtual Reality for $2 billion in 2014, Facebook has made substantial advancements in upgrading its virtual reality equipment to better meet the demands and expectations of its customers.
The Oculus Quest 2 stands out as a standalone headset, providing a wire-free experience during gameplay without the need for an external device like a console or PC. In contrast, Sony’s PlayStation Virtual Reality headset is wired and requires a PlayStation console. The Quest 2’s wireless convenience and compatibility with lower hardware, along with its competitive pricing compared to other major headsets on the market, give Facebook a distinct advantage in the hardware segment.
By acquiring several small yet high-performing studios, Facebook is securing revenue from pre-established and renowned Virtual Reality video games on Oculus. Simultaneously, the company is retaining leading software developers to create exclusive content within the Oculus platform.
Just the beginning for Facebook in VR
Oculus’s next step is a high-end stand-alone headset called Santa Cruz, expected to be available within the next year. This headset won’t require a computer or gaming console but will allow users to move through a virtual space, similar to Vive or Rift. It could be a game-changer in VR’s adoption in the mass market.
The stand-alone VR market will be key because it expands the universe of customers beyond those with gaming consoles or high-end gaming computers. This is when VR could go truly mainstream and become the $19 billion industry that tech companies hope it can be. Facebook certainly looks like it’s in a leadership position today.
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Strategized Business Model
If one is familiar with Facebook’s business model, one might ponder when ads come into play. The company has announced that it will begin testing ads in selected games on the Oculus platform. However, it is still up for discussion as to how the ad experience will look like once the testing commences and how exactly will the VR gamers react to it
If Facebook manages to incorporate ads without disrupting the comprehensive gaming experience. The concept can help developers generate more revenue, attracting more developers to the Oculus platform and potentially enhancing the gaming experience. For instance, real ads appearing on in-game TV screens and billboards would not break players’ immersion in their gaming world while still driving revenue for developers and Facebook.
In addition to attracting developers for top-tier content, Facebook has a unique edge in attracting consumers as well—its massive social networking user base. No other VR headset can offer such easy accessibility (low price point with no required console purchase) and such a high potential for network effects.
Future Dominance in the VR World
Facebook’s 2.8 billion monthly active users uphold much more potential to enhance the value of the Oculus platform using the sheer volume of players, especially when it comes to popular social VR games like Population: One, Craya, and Beat Saber Multiplayer (developed by yet another Facebook-acquired studio, Beat Games). Social gaming experiences are inherently more valuable with more players. While some VR multiplayer games are cross-platform (i.e., an Oculus player can game with a PS VR player). Facebook will likely tighten up its exclusive content offerings to attract and retain players. As long as the company rolls out ad content in a way that feels relatively organic to Oculus players. Facebook is set up for success in rapidly gaining market share in VR gaming.
