Meta wanted to beat Apple to the punch buying Supernatural
An Apple rumor reportedly accelerated Meta's acquisition of VR studios and games including Supernatural, per new legal findings.
The court case between Meta and the FTC is on. Interesting details about Meta and the motivation behind the acquisition are coming to light through testimonies.
Meta announced the acquisition of startup Within in October 2021. Within develops the successful fitness app Supernatural. The US antitrust regulator FTC claims that Meta wants to monopolize the VR fitness market through these acquisitions. It launched an investigation in late 2021.
"Instead of competing, Meta is trying to buy its way to the top," Office of Competition Deputy Director John Newman said this summer. The investigation turned into a lawsuit, which is currently in court.
Meta wants to grow and diversify its VR user base
Among others, former VR and AR content chief Mike Verdu was more likely to testify in the ongoing court case. Zuckerberg is said to have personally tasked him with buying a VR fitness app in early 2021, the Washington Post reports.
One of the reasons for the interest in VR fitness was that the Meta Quest VR platform was used almost exclusively by younger men: 93 percent, to be exact (as of December 2019). Meta thought that a fitness app could attract more women and older users to the platform.
Meta acquired the studio behind the successful VR rhythm game Beat Saber two years earlier. Beat Saber isn't strictly a fitness app, but its popularity and the fact that you're physically active started the VR fitness trend. In an internal email, Verdu calls Beat Saber a "system seller." In fact, as of September 2019, at least 50 percent of people who purchased a Quest headset also downloaded Beat Saber.
Meta's executives reportedly considered making Beat Saber more fitness-focused, but scrapped those plans because it would have been costly and there were concerns about diluting the brand.
Meta wanted to snatch Supernatural away from Apple
Zuckerberg also liked the idea of a partnership with Peloton. But this project never went beyond initial discussions. Later, executives reportedly considered buying an established fitness app, with Supernatural and FitXR (review) on the shortlist. Developing their own app would have been too costly and almost certainly doomed to failure, according to Meta's position.
Supernatural was more attractive to the company because it offered new content daily and was more established than FitXR. What accelerated the decision to buy was a rumor that Apple was also interested in acquiring Supernatural, Verdu said.
"Content is one of the few big differentiators we have," Rade Stojsavljevic, who runs Meta's VR studios, wrote in a chat with a Meta colleague that was shown in court.
Apple itself has yet to unveil a VR headset. According to persistent rumors, this will happen early next year.
You can read more details about the ongoing court case in the Washington Post article.