Facebook Non-advertising Revenue ‘primarily driven by Oculus,’ up 80%

In Fb’s Q1 2020 earnings name as we speak, the corporate overviewed its newest monetary scenario and famous that Oculus merchandise had been a significant contributor to $297 million in non-advertising income.

Whereas Fb makes the overwhelming majority of its income from promoting, the corporate additionally individually stories non-advertising income which incorporates the sale of Oculus hardware and software program, Portal video calling merchandise, and extra.

Throughout the firm’s Q1 2020 earnings name as we speak, Fb CFO David Wehner mentioned that non-advertising income had reached $297 million, a rise of 80% year-over-year. Wehner particularly famous that the rise was “pushed primarily by the gross sales of Oculus merchandise.” He additionally reminded the viewers that “we launched Quest in Might 2019,” seemingly to counsel that the product has been promoting nicely since then.

Within the expense division, Wehner additionally mentioned that Fb’s R&D prices had grown 40% year-over-year, and that the rise was “pushed primarily by investments in core product in addition to our innovation efforts, notably in AR/VR.”

Responding to an viewers query concerning the traction of Oculus merchandise throughout the pandemic, Fb CEO Mark Zuckerberg spoke on to Quest, the corporate’s fully-featured standalone headset:

On the digital actuality facet—this has all the time been a long-term imaginative and prescient—Quest has surpassed our expectations. I want we may make extra of them sooner throughout this era. I do assume that [considering the pandemic] it’s a type of areas the place as individuals can’t exit and into the world as a lot, the flexibility to have expertise that enables us to really feel current even once we can’t be bodily collectively—whether or not that’s quest or portal or any of the software program that we’re constructing round video presence—that stuff has actually seen particularly giant spikes in utilization. And it’s doable that [the pandemic] accelerates among the tendencies round digital or augmented actuality, however I’m undecided what is going to occur there long run. However within the near-term I’m fairly happy with how Quest is doing and I want we may make extra of them.

Final yr after launch of Quest and nicely earlier than the pandemic, Zuckerberg mentioned, “we’re promoting them as quick as we will make them.” Because the 2019 vacation purchasing interval approached, it turned more and more arduous to seek out Quest (and to some extent, Rift S) in inventory. Shortly after the vacations the Coronavirus started to impression the supply of Oculus’ headsets, and since February it’s been very arduous to instantly buy the headset from Oculus or retailers. It’s clear that Zuckerberg’s feedback about wanting to have the ability to “make them sooner” speaks to a need to satisfy the demand the corporate is seeing.

This week appears to have given a glimmer of hope for these trying to get their arms on Quest; as we reported earlier as we speak, world availability of Quest seems to be returning, although Rift S continues to be largely unavailable.

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