By Making Facebook ID Mandatory, Oculus is Taking a High Risk Gamble on VR’s Entire Future as a Consumer Product

I’ve been thinking a lot about Robert Scoble’s guest post last week, in which he argues that Facebook and Apple are the only companies that can take VR mass market -- and therefore, that Oculus’ upcoming requirement of Facebook ID for log-in is a necessary evil to make it mainstream. (Or to soften the blow with corporate speak, a “strategy tax”.)

I don’t dispute Scoble’s analysis; in fact, insiders tell me it’s more or less what Facebook has in mind. But there’s a small problem with Facebook’s plan:

Oculus Quest -- by far its bestselling HMD -- has a tiny install base. Just barely one million. I don’t know if I can fully convey how small that is, but here’s one data point: While it took the Quest over a year just to sell one million units, the Nintendo Switch sold nearly 11 million units during the last holiday shopping season

There’s no evidence that the Quest/Quest 2 market can be expanded much further any time soon. And by insisting on Facebook ID log-in now, when the consumer base is so minuscule, the company runs the risk of totally alienating VR enthusiasts and the development community, further hurting its chances at mass growth.

And for VR developers, there’s really nowhere else to go. Because of the Quest’s small market, VR developers stand little chance of making money from their games -- unless they get funding and promotional help from Facebook: 

“If you want to develop in VR, you have to kiss Oculus or get out,” as a well-known game designer and passionate VR advocate told me recently. “I saw that coming and bailed. Facebook is giving [some developers] money but in the long run that just makes it harder for those not getting the cash. It is the problem when the sales don't cover development -- so quality is propped up by funding, which then makes those not getting funding compete against those hyped up games with no chance of making money.”

What about Vive and Steam VR? Or Sony’s PSVR, which actually has the largest install base for a premium HMD, with over 5 million sold? 

Steam VR has definitely carved out a sustainable niche for core gamers willing to pay extra for an HMD, but again, its headset install base is likely not to grow much more. It only grew by a few hundred thousand with Half-Life Alyx, and that game was it’s best chance at a spike in major growth.

PSVR has its own issues. For one, its features are not as robust as the other HMDs, a deal breaker for many enthusiasts and developers.  (As a longtime XR developer tells me,“VR as a dev scene is full of purists rather than business-minded folk who will straight-facedly say things like they'd rather go bankrupt than compromise their vision.”) For another, I’m told PSVR usage and sales are small, in comparison with Oculus, while support from Sony for PSVR games (both funding and promotion) is mixed at best.

What about Apple? Inside word is we won’t be able to buy whatever HMD that Apple is creating until 2022, 2023 -- and if Oculus sales continue to be slow, I wouldn’t be surprised if they push back a release date indefinitely, or come out with a very minimal product released as a third party peripheral, giving Apple some face saving distance, if it fails. 

So this is where we’re at. Facebook is now gambling that its Facebook ID log-in requirement doesn’t alienate and erode its existing (and now very angry) consumer/developer community, and must still spend many billions more in an attempt to grow the Oculus user base. 

If Facebook fails at either of these interconnected goals, VR’s fate as a consumer product is almost certainly doomed.

Note that I say “consumer”. VR’s future as a niche for a small subset of hardcore gamers seems pretty solid. Its future as a tool for enterprise -- for real world training and prototyping, therapy and so on -- is very much assured. 

And that’s really not a bad future at all. If it plays out that way, the only irony will be that VR remained a niche because the world’s largest social network tried too soon and too aggressively to bring it into the fold.

Comments

[Bighead Todd & the Monsters]

Ok with Faceflop who is part of the censoring big tech companies who work together to silence/deplatform millions of people from having a voice, you should consider how long it will be before they use AI to silence peoples VR Experiences with headsets by filtering out in real time users experiences in the environment and how they socialize and who they are allowed to socialize with .

I predict Facebook will get a backdoor into most game engines, manipulating the user experiences outside of the game developers narrative storyline with injected messaging & manipulation.

At somepoint the AI implants created by Elon Musk will bring faceless and inhuman companies directly into peoples minds.

Congressional term limits is a 1st step to help end companies like FB from having government officials in its pocket while FB & Alphabet both need dismantled and the headset divisions spun off as independent companies.

[Adeon Writer]

Facebook has now announced they are removing the Oculus label and will now be known as Facebook Reality Labs.

Which is a shape because Oculus was had a lot of name recognition. Guess they are throwing that out the window, too.