Meta Quest is dominant, so who can challenge Meta's monopoly?
MIXED reader Simon Unterhuber wanted to know if Meta will continue to dominate the VR market or if there is serious competition on the horizon.
Every Monday, we answer a question from our readers. Send your question to tomislav@mixed.de with "Question" in the subject line, and with any luck, we'll answer it the following Monday.
This week's question comes from Simon Unterhuber
Will Meta continue to lead the VR market or do you see competition coming?
"Dear Simon
This question has been on my mind for some time, and is more relevant and urgent than ever given Meta's current market dominance.
In 2018, before the release of the first Quest headset, I wrote an article titled "Virtual Reality in five years: Will Oculus Be Unrivaled?" (German-only). I argued that no other company was working as aggressively on hardware R&D and building a VR ecosystem as Meta. If no other company countered, I wrote, Meta would be hard to catch up with in five years.
Six years later, this prediction has come true. Meta Quest has penetrated the VR market to such an extent that we can speak of a monopoly. What about the competition?
Can Apple beat Meta?
The most promising competitor is Apple, but the Vision Pro flopped as I predicted in 2023. Hopes are now pinned on a cheaper version of the mixed reality headset, which could be delayed beyond 2027, according to the latest claim from supply chain analyst Ming-Chi Kuo.
Whether this is true or not is irrelevant in my opinion. Even with a device that costs half as much as the Vision Pro, Apple is unlikely to steal much market share from Meta. I am convinced that there is no significant market for VR headsets above $500. For that to happen, they have to become general-purpose devices that can compete with desktop computers and laptops, and they are a long way from that.
Where there is no significant market, there are no developers. Where there are no developers, there are no apps. And where there are no apps, there are no consumers to create a significant market. Meta has made huge investments to create a VR ecosystem that can support many developers. Apple, on the other hand, just built a very expensive VR headset with no discernible market strategy and no plan to help developers.
What about other competitors?
- HTC lacks the resources to keep up with Meta
- Pico owner Bytedance recently scaled back VR investments
- Valve hasn't released a VR headset in more than five years
- Sony didn't have much success with Playstation VR 2, and PSVR 3 is years away (if Sony plans to continue supporting its VR ecosystem).
- Samsung and Google are working on a pricey mixed reality headset that has yet to be unveiled and will likely suffer the same fate as the Apple Vision Pro due to its high price tag
The reason Meta is the market leader after ten years and will remain so for a long time is that Meta is willing to invest billions in these technologies for years and perhaps decades to come, regardless of the losses, while other companies push for short and medium term profits and give up when they don't see a return on their investment (I certainly hope Apple isn't one of them, but we will see).
VR and AR is a huge loss-making business for Meta. Who is ready to compete on that front with Meta? | Picture: Matthew Ball
Until that mindset changes, Meta's lead will only grow in the future. What Meta's competitors need is not another expensive VR headset, but a long-term vision and the willingness to bleed as much capital as Meta. However, I am not very optimistic that they will do so until virtual reality is mature enough to compete with computing devices other than game consoles.
Kind regards,
Tomislav
Interested in VR and AR? Then follow us on Facebook or X or share your experience in the comments. For feedback, topic suggestions, or other ideas, please email us at hello@mixed-news.com.
Note: Links to online stores in articles can be so-called affiliate links. If you buy through this link, MIXED receives a commission from the provider. For you the price does not change.
