No matter how you slice it, Meta is subsidizing every VR headset it sells to the tune of 4 to 6 times the revenue it generates. That’s so crazy that you have to think it is an act of genius that lesser mortals cannot comprehend. Or, if you are a hater, you could call it a humongous act of hubris on a level that hasn’t been seen since Icharus decided to go it alone.
The Verge has been reporting on an internal Meta presentation that purports to map out the next four years of VR and AR products from the coming. I am going to distill the information as best as I can here because most of it looks like it will have to change and the reason I say that is because Apple is knocking on the door of headsets this year, and depending on how it does, all of this could be moot. However, we do know that the total spend on Mark Zuckerberg’s metaverse fever dream is ticking past $36 billion which comes to about $1,800 for every headset sold so far. When you consider that the average value of those headsets to Meta is about $300-500, you might be thinking, Genius! You give someone $4-6 for every $1 they give to you, and before you know it, you have a lot of customers! Or, not. All I can think is that Meta thinks creating a market for these hardware products is like building a social network: subsidize growth at any cost and eventually, years down the line, it will pay off. Hmmm.
| Product | Codename | Expected Features | Availability |
| Quest 3 | Stinson | -Two times thinner – At least twice as powerful – Cost slightly more than Quest 2 – Front-facing cameras for mixed reality experiences – New “smart guardian” to navigate the real world – 41 new apps and games for the Quest 3 | Later in 2022 |
| Quest Pro | Unclear if a successor is coming because no one like the original | N/A | |
| Ventura | Ventura | – More accessible headset – Pack the biggest punch at the most attractive price point in the VR consumer market | 2024 |
| La Jolla | La Jolla | – Higher resolution for work use – Codec avatars (avatars that are designed to be transmitted over networks but maintain a high level of photorealism) – Improved comfort features – More advanced than other headsets | Way out in the future |
| Smart Glasses | – Equipped with cameras – A “viewfinder” for text messages, scanning QR codes, and translating text in real-time – Neural interface band for controlling glasses through hand movements – An accompanying neural interface smartwatch – Third generation to come in 2025 with more features | Fall 2022 (2nd Gen) 2025 (3rd Gen) | |
| AR Glasses | Orion | – Technically advanced and expensive – Project high-quality holograms of avatars onto the real world – Internal launch for employees to test in 2024 – Public release as part of Meta’s “Innovation” line for early adopters | 2027 |
| Neural Smartwatch | – Will serve as an input device for the smart glasses and control the functionality on the wrist – Will use neural interfaces – Will allow users to type as fast as mobile phones | 2025 |
Of course, there is no real growth here, considering the spend or, the fact that sales in 2022 were 12% down on 2021 for Meta’s headsets. There is also the very real possibility that there is no one inside of Meta who can tell the emperor that he is, by virtue of the laws of optics, naked.
The company averaged about 2.93 billion active monthly users over the course of 2022. The company sold 9.3 million VR units. That’s a conversion rate of about 0.32%. BigCommerce has data on over 60,000 stores and it had a report that said the average conversion rate for hardware sales is about 0.8% to 1.6%. You put aside the vast amounts invested by Meta, and you put aside the extraordinarily high subsidies for each device sold, and you’re still left with the fact that, despite owning the ad algorithms on its own platform, and having such a huge, captive audience, the company can’t even convert at average rates.
Dammit, I am such a hater.
But, let’s find that silver lining in the massive clouds of smoke that are billowing as billions and billions of dollars burn right in front of our eyes. Meta may be doing us all a favor by strangling consumer VR, and making it impossible for anyone to ever make a business out of it. The thing is, VR is tired. It always was. A pipe dream of very smart people who, deep down, know that it has problems that we cannot solve until we make first contact with a superior alien race that has a warp drive.
But, mixed reality (MR) isn’t going to have to deal with all that. It’s not total immersion, but just enough to help us out in a pinch. MR needs to give the user just enough of the virtual world that they don’t feel like they have to slip out of their real world completely. That’s one part of it. The other part of it is the move away from pick and point user interfaces. There’s a lot to be said for the mouse but it has been around for a long, long time, and has fundamentally not changed one iota other than to increase the incidences of carpal tunnel syndrome.
Finally, no one wants to have a desktop if they can get the same output out of a laptop. And no one wants to lug around a laptop if they can do what they need to do on a smartphone. It may be that actual productivity is diminished because everyone is moving to smaller screens and has less focus. It may be why work is sometimes a manic state of 24/7 doom scrolling. MR maybe able to bridge the gap between mobility and productivity, and maybe even reduce stress. If near-eye displays can deliver the same expanse of information as big screens do today, and if the user feels like their digital life is integrated seamlessly into their real life where they don’t have to keep missing out on their own existence because they have their heads buried in a device, then we have the recipe for success. We have a reason to invest billions in AR glasses and VR headsets because they get us closer to some sort of heads-up ideal.
VR is just too much of an extreme swing of the pendulum from the real world to be a viable platform for meaningful interaction.
