Quest 2 ‘on track to be first mainstream VR headset’

Throughout Fb’s This autumn 2020 earnings name as we speak, CEO Mark Zuckerberg mentioned that Quest 2 is “on monitor to be the primary mainstream digital actuality headset,” noting that the machine drove a 156% enhance within the firm’s non-advertising income.

In previous incomes calls, Zuckerberg has typically downplayed the corporate’s XR enterprise as a forward-looking funding that isn’t anticipated to repay for years. His tune has shifted notably within the firm’s newest earnings name, the place he informed traders that Fb’s XR enterprise was “one of many areas that I’m most enthusiastic about our progress heading into 2021.”

Though Fb hasn’t confirmed what number of Quest 2 models have been bought to date, Zuckerberg was upbeat in regards to the headset’s gross sales efficiency, saying he believed it’s “on monitor to be the primary mainstream digital actuality headset.”

It isn’t solely clear what he means by “mainstream,” although we now have one good guess. At Oculus Join 5 in 2018, the corporate’s annual XR developer convention, Zuckerberg defined that he believed that 10 million VR customers was an necessary milestone for the corporate to succeed in as a way to make a sustainable ecosystem for VR builders.

 

Quest 2 'on monitor to be first mainstream VR headset' 7Picture courtesy Oculus

The massive query is what’s it gonna take for it to be worthwhile for all builders to construct these giant efforts for VR? To get to that stage, we expect that we want about 10 million individuals on a given platform. That’s the brink the place the variety of individuals utilizing and shopping for VR content material makes it sustainable and worthwhile for every kind of builders. And as soon as we get throughout this threshold, we expect that the content material and the ecosystem are simply going to blow up. Importantly, this threshold isn’t 10 million individuals throughout all several types of VR. As a result of in case you construct a sport for Rift, it doesn’t essentially work on Go or PlayStation VR. So we want 10 million individuals on [one] platform.

So whereas Quest and Quest 2 probably haven’t bought 10 million models but, Zuckerberg’s confidence that Quest 2 may turn out to be the “first mainstream digital actuality headset” suggests the 10 million unit threshold could seem inside grasp.

“In earlier quarters I’ve talked about our long-term future objectives in the case of digital actuality,” Zuckerberg informed traders, “however I believe that this quarter’s outcomes present that this future is right here.” He additional shared that “greater than 60 Oculus builders are producing income within the hundreds of thousands, and that’s greater than twice as many as a couple of months in the past.”

Zuckerberg additionally mentioned that Quest 2 was “one of many sizzling vacation items this yr,” and was a serious driver behind the corporate’s $885 million This autumn non-advertising income. Fb’s Chief Working Officer, Sheryl Sandberg, mentioned on the decision that this was a year-over-year enhance of 156%, and particularly famous that it was “because of robust Quest 2 vacation gross sales.”

Quest 2 'on monitor to be first mainstream VR headset' 8Picture courtesy Fb

Some back-of-the-envelope math can provide us a ballpark estimate for Quest 2 unit gross sales in This autumn. The corporate earned $855 million in non-advertising income, which incorporates each Oculus merchandise and Portal merchandise. With Sandberg pointing to Quest 2 as a serious driver for the expansion with out mentioning Portal, we will most likely safely determine no less than 50% of the income was from Oculus headsets.

From there we would determine that 75% of the headsets being bought are Quest 2, with the soon-to-be-discontinued Rift S making up the opposite 25%. Equally, we’d determine that 75% of Quest 2 models bought are the 64GB mannequin, whereas 25% are the 64GB mannequin.

Plugging in these assumptions yields 1,000,000 Quest 2 models, although that may have to be dialed again by some portion to account for first-party accent gross sales.

Seeking to the long run, Zuckerberg confirmed that Quest 2’s successor is already in growth.

“We’re persevering with to work on new [VR] hardware as properly. The brand new hardware will match the identical platform, so the content material that works on Quest 2 must be forward-compatible [with the new hardware], in order that we’re going to construct one bigger set up base across the digital actuality headsets that we now have.”

Whereas this gained’t be a shock to anybody who has been paying consideration, it does stand in stark distinction to Sony—whose PSVR has lengthy held the lead in VR headset unit gross sales—however has shunned indicating any plans to construct a next-gen headset.

Fb has additionally made no secret about its plans to construct an AR headset; the corporate shared a have a look at an early prototype final yr. On the decision, Zuckerberg affirmed the  plans to begin first with smartglasses, earlier than launching full-blown AR glasses additional sooner or later. He additionally referred to as out Apple as a probable competitor within the AR panorama.

“[…] long run, as we transfer towards constructing the subsequent computing platform, I believe we’d count on to see [Apple] as extra of a competitor [in AR] as properly.”

It isn’t clear although if Fb has some inside information on Apple’s XR plans, or if Zuckerberg is referring to latest studies suggesting that Apple will launch its personal headset subsequent yr.

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