Facebook’s Big Long-Term Bet
Facebook held its annual, rebranded Facebook Connect event today, announcing the next generation Oculus Quest 2 VR headset and highlighting the company’s 10-year AR and VR roadmap. The bottom line: AR and VR will evolve to become the next-generation computing platforms, and Facebook is currently one of only three companies, along with Apple and Google, that have a material role in building that future. Here are our takeaways:
Building businesses beyond advertising
Facebook Connect revealed the magnitude of investment the company is undergoing to build the next generation of computing platforms in AR and VR. We believe these platforms will impact every tech sector and potentially move Facebook beyond its social advertising roots into new businesses that target work, commerce, and entertainment.
Getting to know Facebook Reality Labs
Similar to Google’s other bets, Facebook Reality Labs is developing the company’s long-term product road map. This includes multiple big bets based on their conviction that AR and VR can change humanity for the better. In the past, we’ve been critical of Facebook and Instagram and the platforms’ at times toxic effects on human interaction. While we believe these businesses continue to have negative consequences, we applaud Facebook and the Reality Labs team for their efforts to be a long-term force for good and to unlock experiences that were not possible before.
Quest 2 single-handedly expands VR market
The next-generation Oculus headset represents a material accelerant to VR’s path toward mainstream adoption. Quest 2’s significantly improved resolution, processor, and comfort address the top complaints holding the original Quest back, while lowering the price by $100, to $299. Quest 2 also appears to be getting its first AAA IP system seller game in Assassin’s Creed. In sum, we expect Quest 2 to be Facebook’s best selling VR product by a large margin.
Ray-Ban smart glasses are a step forward in AR glass development
Facebook announced Ray-Ban branded smart glasses, expected to arrive in 2021, which will build the brand and gain key learnings for the company ahead of its big bet launch of full AR glasses in the coming years. Additionally, its partnership with Luxottica will allow Facebook to address brand concerns while taking advantage of Luxottica’s eyewear category leadership and lens technology.