Ten years ago, Facebook announced the acquisition of Oculus
UPDATEMeta is also celebrating the tenth anniversary of its VR efforts. In the Quest Blog, the company looks back at past milestones and products, and also takes a look into the future, without revealing anything new. An interesting read for anyone interested in the history of VR.
A decade ago, Facebook launched a massive project. Ten years later, we're still in the early stages of VR and AR. A look back.
On March 25, 2014, Facebook announced the acquisition of Oculus, a startup specializing in VR technology. The acquisition cost Facebook three billion US dollars.
A lot has happened since then. The first attempt to enter the mainstream failed: in 2020, Meta largely abandoned its PC VR business and Oculus Rift brand and instead focused on standalone VR headsets. In retrospect, it was the right decision: Meta Quest has been sold nearly 20 million units (as of February 2023) and, for the first time, created a VR ecosystem that many studios and developers can make a living from. It's hard to imagine where virtual reality would be today without Facebook's influence.
Oculus is (mostly) history
The company went all in, even renaming itself Meta in 2021 to double down on its metaverse vision. At the same time, it dropped the Oculus brand, which for many people is still synonymous with virtual reality. Oculus Quest has since become Meta Quest. The Oculus brand lives on today only in Meta's software efforts: Oculus Studios (Meta's VR studios) and Oculus Publishing (Meta's VR publisher). The last of the Oculus founders left Facebook back in 2019.
Reality Labs, which is Meta's VR and AR division, is still losing money after ten years. Although Meta broke the $1 billion revenue mark for the first time in the fourth quarter of 2023, the losses are many times greater. In total, Mark Zuckerberg has invested well over $50 billion in his Metaverse vision over the past decade. More than half of that has gone into developing AR technology. This fall, Meta may finally unveil what it has been working on all these years.
Apple enters the ring
Meta now has a quasi monopoly on the VR market. This is the dark side of the VR success story of the past few years. Meta has created unrealistic price expectations through aggressive subsidization and driven competitors out of the market. Because the Meta Quest ecosystem is the lifeblood of the industry, the majority of studios are dependent on Meta's goodwill, a power that can be abused by Meta.
A few weeks before the tenth anniversary of the Oculus acquisition, something happened that, in retrospect, may be at least as important: Apple entered the VR market. The company has a lot of catching up to do, and it remains to be seen how much it really wants to invest in the category if it faces serious headwinds. Virtual reality could remain a money-losing business for the next decade, for Meta and for Apple.
The important thing is that Meta gets a serious competitor with a strong vision of its own, and from what we've seen of Vision Pro so far, Apple could fill that role perfectly.
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