New World Notes

Since Only 5% of Gen Z Uses VR Every Day, is Meta Wrong to Promote Virtual Reality Like a Mainstream Technology? (Comment of the Week)

Responding to our question on how many active users on the Quest VR headset there are, a reader points us to a recent market survey which suggests that use is quite tiny, especially among Gen Z:

Piper Sandler completes 43rd semi-annual Generation Z survey of 7,100 U.S. teens...

While 26% of teens own a VR device, just 5% use it daily. 48% of teens are either unsure or not interested in the Metaverse

This prompts reader "lieisacake" (LOL) to observe:

Forget the Quest 2's Install Base -- How Many Quest 2 Owners Are Active? (Comments of the Week)

Above: Most popular games in the Quest store as of today

I spent much of last week pondering the mystery of why Meta hasn't announced that the Quest 2 has crossed a 10 million unit install base (as it almost certainly has by now, based on earnings reports). Reader Zack makes an even better point:

Consider Meta might actually experience terrible numbers of ACTIVE users... I personally worked in VR since DK2 days, 2015 or so. I own a Quest 1, and although I believe in this tech's future, I still have to fight my way into my next VR session, every not so often time I decide to wear it.

So only guessing here... if say 50%+ of Quest2 owners don't even use their headsets past the first 30 hours of "novelty and excitement" phase... THAT would be really embarrassing for them... and I feel that's the reason why 10M units is not enough to have a self-sustaining ecosystem.

While Zuckerberg did say 10 million was Meta's magic install base milestone, Zack's point helped remind me to double check Zuck's specific wording in 2020:

We had this milestone in our mind that first we needed to get the technology to the place where you could have a standalone headset, it could be portable, it could be high quality — do the tracking and all that. And Quest was the big milestone on that. Then, from an ecosystem perspective, we believed that if we get to 10 million units active, then that’s kind of a critical magic number.

Emphasis mine! That could really solve the mystery: Maybe 10 million Quest 2 units are sold, but that doesn't mean 10 million are being actively used. 

Martin K. chimes in on that tip:

Mystery: Quest 2 Install Base Must Have Passed Zuckerberg's 10 Million Target By Now - So Why No Meta Announcement?

With Meta's Q2 2022 earnings report out now, it's once again time to engage in some Quest 2 install base tea leaf reading. I've written about this multiple times (most recently here), but the basic gist is: Most or nearly all the revenue from Meta's Reality Labs division comes from sales of its Quest 2 hardware device, with an MSRP of $299. So doing the back-of-envelope math:

• Back in April, I calculated the Quest 2 install base as about 11-13 million.
• According to the latest revenue report, Q2 revenue for Reality Labs was $452,000,000 million.
• Which suggests up to 1.5 million more Quest 2 units were sold between April and June 2022.
• Giving us a grand total Quest 2 estimated install base of 12-14.5 million units maximum.

Even at a very conservative estimate, Quest 2's install base crossed over 10 million months ago.

Which brings up a new mystery: Why hasn't Meta announced Quest 2 hitting a 10 million milestone?

10 million is, after all, Mark Zuckerberg's (somewhat arbitrary) target goal for the Quest 2. As he put it in 2020:

Don't Expect Apple to Announce an AR/VR Headset -- It's Been Working on an Unannounced HMD Since at Least 2015!

To the disappointment of many XR/Metaverse fans, Apple's slew of announcements at this year's Worldwide Developers Conference did not include anything about its much-rumored, long-awaited VR/AR headset. I'm not surprised, even though the New York Times just reported one is coming out next year. 

Because the thing is, I've been following such dubiously sourced predictions and rumors since at least 2015. Seven years! To wit:

Watch: What Social VR / Metaverse Platforms Can Learn About User Safety from 2D Virtual Worlds

Here's the latest talk from Linden Lab veteran Jim "Babbage" Purbrick, who applied what he learned from Second Life and other pioneering virtual worlds in his work for Eve Online and Meta, with the focus here on user safety, i.e. keeping annoyances from trolls and other bad actors in the virtual world down to a dull roar.  

These are lessons, as he tells me, "from older, 2D and text-based virtual worlds [that] are often ignored by VR developers. This talk shows how we applied those lessons to Oculus Venues.

"Technologies change, people stay the same."

This is true. One key lesson Jim and his team applied was real time responses to active harassment. (Starting at around 29 minutes in.) If a troll is scurrying about causing problems during a live event, they need to be dealt with in real time, not after abuse reports have been filed by users and processed the next day: 

Watch: How BONELAB Could Become the Garry's Mod for VR

Via VR scout Adeon, here's a very good case from YouTuber ThrillSeeker to keep an eye (and a haptic finger in the wind) out for BONELAB, from indie studio Stress Level Zero, creator of the unexpected VR hit BONEWORKS from 2019. Like that game, BONELAB has highly responsive physics and avatar customization, with this new version compatible with the Quest 2 and its install base of some 11-12 million consumers. Even more intriguing, BONELAB's teaser trailer strongly suggests that player modding will be a major feature to the game after it rolls out. Or to put it another way: BONELAB could become the Garry's Mod for VR.

Teaser trailer and feature description below from the Steam page:

Quest 2 Install Base Estimate: Now 11-12 million, Based on Q1 Meta Report

With Meta's Q1 2022 earnings report now out, it's once again time to engage in some Meta-ology. (You know, like Kremlinology, except with a publicly traded company.) The core question for us XR/metaverse obsessives being: What's the install base of the Quest 2, which is central to Meta's  metaverse strategy?

Short answer: From what we can tell based on this earnings report, about 11-12  million.

Why? If you want to walk with me in the weeds, read on:

Why Meta's Retail Stores Miss Where the Metaverse is Most Powerful

What's our evidence that Meta's Metaverse strategy is helplessly muddled? Well, there's Business Insider confirming what I reported, citing an insider last year. But even more evident is Meta trying to market its metaverse platform in the real world:

Meta said Monday that its first physical retail space will open on May 9 in Burlingame, California. The store will be at Meta’s Reality Labs complex, the office where its engineers work on technologies like virtual and augmented reality... Although Meta will sell its video chatting device Portal and Ray-Ban Stories glasses on site, most of the store’s real estate will be dedicated to showcasing the Oculus headset, a Meta spokesman said. That makes sense given Zuckerberg’s reportedly obsessive focus on the metaverse lately.    

The practical difficulties are many. As I discussed with Bloomberg's Parmy Olson:

Wagner James Au, author of “The Making of Second Life,” who blogs regularly about metaverse platforms, says Meta can’t underestimate the psychological barriers to introducing people to VR. “I’ve worked for metaverse platforms and you really have to wrap your arms around someone and manipulate their head and their face while you put this headset on them.” 

And that was a challenge requiring "VR condoms" even before there was, you know, a deadly global pandemic. But even beyond those issues, the fundamental problem is this:

XR Headset Controlling Giant Humanoid Robot to Construct a Railway is Peak Japan Moment of 2022

This is the mixed reality application of the month and is probably the Peak Japan moment of the year: A giant construction robot.. controlled through an XR headset. According to this Japanese news site (and Google's so-so translation), it is very much in production:

[Railway company] JR West announced on the 15th that it is developing a multifunctional railway heavy equipment that combines a humanoid heavy equipment robot and a railway construction vehicle in collaboration with the human-machine integrated and Nippon Signal. The company aims to improve productivity and safety by developing highly versatile heavy railway equipment that can be used for various equipment installed in high places and mechanizing work that previously required human intervention.

According to VR expert Adeon (who tipped me on this ), the HMD we see pictured here is an HP Reverb G2. ("Very good headset, better than Index.") New World Notes' Japanese translator Sanny found this video of the robot in action, watch below:

BREAKING: Rec Room Has Over 3 Million Monthly Active VR Users, Most on Meta's Quest 2; That's 10x More Users Than Meta's Horizon Worlds & Venues!

Just got this pretty amazing breaking news note from Shawn Whiting, Head of Influencers & Partners at Rec Room:

"Shortly after the holidays, Rec Room crested 3 million VR monthly active users... A majority of those VR monthly active users are Quest 2. [Emph mine - WJA]

"We're very happy with the VR growth but at this point VR is a pretty low percentage of our monthly players. Rec Room is seeing much more growth on iOS, Android, PlayStation, and Xbox due to there being billions of those devices out there collectively." 

So that's something! Last December I estimated Rec Room had 4-5 million monthly active users across all devices, but based on Shawn's wording, total Rec Room numbers is likely to be well over 10-12 million MAU.

This is quite an impressive milestone for metaverse platform growth -- and more key, for usage of the Quest 2 headset on metaverse platforms. Quest 2 has an install base over 10 million, so at least 15% of that (i.e. 1.5 million) are active on Rec Room.

This is also a sharp wake-up call for Meta: