What Display Daily thinks: First, couldn’t be happier that someone else, CNBC in this case, is not sold on Meta’s ambitions in VR and AR. Secondly, the data on sell-through is damning, and finally, not sure what the expectations are for Apple’s Vision Pro at $3,499 but surely it isn’t a spark of consumer interest and a burgeoning market?
It gets a little boring to have to constantly have second guessed pieces like this shoved into the conversation. You can’t say that Meta’s billions aren’t delivering and then expect an overpriced Apple product, and less billions spent, to suddenly make the bad taste go away.
As for the Ray-Ban/Meta smart glasses? Check the add below. It makes no sense either. Is it the headphones or the creepy guy who can take pictures of you or film you surreptitiously? This is what happens when the desperate advertising brief was: everything, sell everything!
VR Market Shrinks; Meta Keeps Spending
According to a CNBC report, sales of VR headsets and AR glasses in the U.S. have seen a significant decline, dropping nearly 40% in 2023 as of November 25. This data, provided by research firm Circana, indicates a sharper fall compared to the previous year, when sales slid 2% to $1.1 billion. Despite this downturn, Meta Platforms Inc. continues to invest heavily in developing the metaverse, as CEO Mark Zuckerberg views it as critical to the company’s future.
The market contraction highlights the challenges faced by Meta in mainstreaming immersive technology. This difficulty is further compounded by the absence of a breakout application to fully realize Zuckerberg’s vision. Meta’s Reality Labs, responsible for VR and AR technology development, reported a loss of $3.7 billion in the third quarter on sales of $210 million, totaling around $25 billion in losses since early 2022.
Meta’s Quest 3 VR headset, released in October, did contribute to a temporary market boost during the holiday season, yet it wasn’t sufficient to offset the overall annual decline. The U.S. sales of VR headsets during an eight-week period covering October and November were $271 million, a 42% increase from the same period last year, as per Circana.
Meta’s Chief Technology Officer Andrew Bosworth emphasized the importance of long-term investments in emerging technologies like AI and the metaverse, despite the inherent risks and costs. He noted that some of the top apps since the launch of Quest 3 are mixed reality apps, demonstrating the potential appeal of these experiences.
The CNBC report also touched on the competitive landscape in the VR market. Sony’s release of its PlayStation VR2 headset earlier in the year did not significantly impact the market share, partly due to its dependency on the PlayStation 5 console. Furthermore, Apple’s upcoming entry into the market with its Vision Pro mixed-reality headset, priced at $3,499, is anticipated to create a significant shift in the VR and AR landscape in 2024.
Meta, currently leading in VR headset sales, hopes the Quest 3 will inspire the creation of compelling apps and games. The company also sees potential in its second-generation Ray-Ban smart glasses, priced at $299, as part of its broader metaverse strategy. These developments come amidst the backdrop of Meta’s rebranding efforts, which some believe have had a positive psychological impact on businesses, dissociating the new ventures from Facebook’s previous data privacy controversies.
