The State Of VR Industry In 2021 And Facebook’s Role In It

mark zuckerberg oculus

Facebook has been completely dominating the VR market since the release of the Oculus Quest 2. Now, this is in part due to making the platform much more accessible to people. Previous reports even suggested that shipments of VR headsets grew 52.4% year over year in the first quarter of 2021. Standalone headsets that can function even without a PC make up 82.7% of the total shipments.

Another important point is that the Oculus Quest 2 is way cheaper than any other VR headset in the market. This shows that the Facebook Oculus Quest 2 is making the industry bloom with its low price and accessibility to newcomers.

VR advertising model backlash

facebook oculus quest

This all comes with a caveat: as you can see, Oculus is owned by Facebook, which is in the advertising business. Shortly after Facebook bought Oculus, creator Palmer Luckey stated, “We are not going to track you, flash ads at you, or do anything invasive.”

However, after his departure and most of the Oculus executives, such promises were broken without much thought. Now Facebook is trying to put ads even in VR.

“We’re exploring new ways for developers to generate revenue – this is a key part of ensuring we’re creating a self-sustaining platform that can support a variety of business models that unlock new types of content and audiences.”

Oculus blog

Of course, the backlash to this decision was so severe that Resolution Games, the only developer willing to test this out, had to pull out of this trial.

Facebook doesn’t understand that the Oculus userbase is full of early adopters of VR. Early adopters are willing to pay for content. They were willing to pay for unproven hardware, but they also have a right to participate in the platform’s development. These people have placed their trust and money in this technology from early on and are very much concerned about the future of this platform.

Revenue for VR

Nowadays, it is a well-established fact that gamers don’t want their games to be plagued with ads and microtransactions. Despite that, companies such as Facebook and EA continue to try and monetize these games wherever they can.

While this monetization might seem a bit excessive, you have to consider that Oculus Quest 2 ($299/$399) is way cheaper than other VR headsets. This is because Facebook is willing to take a loss to get people into their ecosystem.

However, even if they sold more than 2 million headsets so far, they still paid $1,000 per headset sold for just the Oculus acquisition price ($2 billion). This is not even accounting for the money Facebook spent on countless research on computer vision, sensors, eye and hand tracking, hardware development, developing first-party experiences and tools for game devs, marketing, supply chain, and manufacturing.

One thing is for sure; the whole VR industry owes a lot to Facebook for spending that many resources on an unprofitable medium. Despite that, people haven’t yet completely accepted VR. They have shown interest in it, but they are yet to make the jump. Facebook has definitely made VR more accessible with the Oculus Quest 2, but it’s still not much popular among the general public.

More content needed in VR

There are limits to monetization on these VR platforms as compared to consoles. Modern consoles have all the major and most popular AAA games and a vast library of indie titles.

On the other hand, even the most popular games on VR don’t even come close to the quality of these AAA games (The only exception being Half-Life: Alyx). Consoles also have their own subscription services where they provide free games and additional features at a monthly cost. In the mind of gamers, this makes VR seem lackluster despite having the same price as consoles.

VR development companies have to realize that they are not just fighting for recognition, but they are also competing with Sony and Xbox. They have to start treating VR as a platform rather than an additional accessory. Offering services to make up for the lack of games and support for third-party titles might be what the VR industry needs right now.

The future of Facebook VR

Looking at the specs of Oculus Quest 2, it is not much different from a high-end smartphone. So there is a brief possibility of being able to run high-end VR games on your smartphones. However, smartphones like those can cost a fortune themselves. But just the idea alone is enough for people to get excited about innovations in smartphone technology.

Thinking back when VR just came out, everyone was excited to see the future potential of this new technology. But that excitement soon died down. What Facebook needs to do is renew the public interest in VR. Seeing as they are in the marketing business, it shouldn’t be so hard for them. What they do need to do is strike at the right time.

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