Homepage / Technology / Facebook's $2 billion bet on virtual reality looks like one of Mark Zuckerberg's rare mistakes
'Nobody has built a money-printing machine like Apple,' VC Jason Calacanis says These 90 private companies are reshaping the space industry, says Morgan Stanley Gundlach says if you bet against bitcoin today 'you'll make money' Uber's culture issues can be blamed on Silicon Valley's hunger for fast growth: Arianna Huffington Google, Facebook founders were naive about propaganda, extremist content, say Silicon Valley titans Gundlach: Tax plan could have some' unintended consequences,' hurt junk bond market Cramer: People will fight it, but Apple's investment in Finisar is a 'fantastic' deal Facebook found just three Russian-bought Brexit ads, amounting to less than $1 Overstock.com shares spike after blockchain unit announces for-profit property registry Dow stock Boeing is on track for best year in nearly 4 decades, but the charts point to trouble Another bitcoin rival leaps to a record high, surpassing litecoin's market value Martin Sorrell: Finalized Disney-Fox deal would be a top media investment for us What to expect in Yellen's swan song: 'She's not a showboater' Target to buy grocery delivery service Shipt for $550 million When politicians and executives get caught out Some of Facebook’s early friends now its sharpest critics US says hacker to plead guilty for role in 2016 cyber attacks Laser chip maker Finisar jumps 25% on news that Apple's investing $390 million in the company The Amazon Echo now lets you play Spotify across all of your Echos Citi has 5 reasons — including tax reform and global growth — why Apple can keep crushing market Facebook will start streaming WWE professional wrestling next month Deregulation, global stock rally to 'propel' Morgan Stanley higher in 2018: KBW analyst A new law bans Kaspersky software from use in the US government Bitcoin 'dwarfs' nearly all bubbles, including 1929 crash: Investor Ken Fisher How 2017 became a turning point for tech giants The biggest risk you face when choosing between a human and a robo-advisor Disney deal with Fox would be a ‘home run’ in its battle against Netflix, Amazon, analyst Ives says Stocks making the biggest moves premarket: HON, LLY, AMGN, TM, HD & more Apple's 'innovation complacency' could see it lag Google, Amazon in post-smartphone world, study says Cryptocurrency market now worth $500 billion, more than Warren Buffett's Berkshire Hathaway Tesla stock is up 12 percent in a week — but it could be time to pump the brakes Why Donald Trump's Jerusalem move might have made Russia a lot stronger Weekly mortgage applications fall 2.3% as rates rise Apple invests $390 million into Finisar, which makes laser chips for iPhone X and AirPods Leuthold's Doug Ramsey reveals top sector picks, bullish market predictions Tillerson says the US is ready to begin direct talks with North Korea German stock exchange operator Deutsche Boerse experiences trading disruption Russian court freezes $1.7 billion of Sistema assets at request of Rosneft A top Facebook exec is jumping on the bitcoin bandwagon ECB set to lift its growth outlook as massive bond-buying slowly winds down Swedish fintech start-up iZettle raises $47 million; CEO says 'time will tell' for IPO plans Google's top searches in 2017: Hurricanes, Matt Lauer and Tom Petty Google is blocked in China, but that's not stopping it from opening an AI center there UAE oil giant must build regional 'credibility' ahead of Saudi Aramco IPO next year European markets set to tread water ahead of Fed's decision Founder of a would-be tech powerhouse is blacklisted by China for allegedly disobeying court order Japanese start-up ispace just secured funds for first two lunar missions starting in 2019 China's GDP growth set to plunge to near 30-year low in 2018, ADB warns FBI agents called Trump an 'idiot' during presidential race South Korea may tax capital gains from cryptocurrency trading Japanese e-commerce firm to launch program for tech startups in Singapore I was wrong about bitcoin. Here's why Free money from China comes with strings — as one country's learning the hard way This power couple bought bitcoin in 2013, donated gains to cancer hospital Cramer Remix: What being young and broke taught me about the stock market Companies must have 'a culture of security' to prevent cyberattacks, McAfee CEO says Cramer's charts predict full speed ahead for industrial stocks like Caterpillar, Honeywell Asia markets take cues from a mixed US trading day ahead of Fed decision Cramer finds value-creating, investment-worthy CEOs across industries Novogratz says he would sell litecoin after its surge, sees bitcoin hitting $40k within a few months Here's why bitcoin prices are different on each exchange This start-up is making remote-controlled robots that can do surgery in space Apple’s up 43,000 percent since its IPO, and could soon surpass $1 trillion in market cap MongoDB falls despite earnings beat Why investors should beware stocks getting the bitcoin boost Billionaire investor Druckenmiller: ‘I love Amazon' more than Apple Facebook's accounting shift shows it expects a higher European tax bill next year Coinbase suspends ethereum buys and sells twice in one day Tesla shares pop after PepsiCo orders biggest fleet of Semi trucks so far San Francisco's mayor oversaw tax break that helped spark a new tech boom in the city Net neutrality protests have moved online, but big tech is keeping quiet My kids get 'no screen time whatsoever,' says Silicon Valley investor Chamath Palihapitiya I owned bitcoin for a weekend and here's what I learned NYU's Scott Galloway on bitcoin: It shows young people 'have no faith in our institutions' Some Ryanair pilots in Ireland to strike, German union steps up pressure Companies are already paying a tax rate as low as 13%, economist Yardeni estimates Facebook slams former exec Palihapitiya, saying it 'was a very different company back then' 80% of Wall Street economists, strategists believe bitcoin is a bubble: Survey Facebook to book advertising revenue locally amid political pressure Strategist Tom Lee: Young people will drive bitcoin gains just as boomers boosted stocks in the '80s This founder started in his parents' garage—now his company does over $100 million a year Activision shares to get a boost from Overwatch, Diablo sequels, Goldman says Bank of England to meet amid UK inflation surge: What to look out for Verizon will launch over-the-top service before year-end with NFL as key piece, analyst predicts Chamath Palihapitiya: Apple is 'no different than Louis Vuitton or any other luxury good' Passport's flagship fund to close after 'unacceptable' returns Apple's powerful new computer launches December 14 Despite a deluge of criticism, Mark Zuckerberg had a bountiful year Chamath Palihapitiya says Elon Musk is the 'most important entrepreneur of our generation' Senior Australian politician resigns over China ties scandal Forget bitcoin, one of its biggest cryptocurrency rivals is up nearly 5,800 percent this year Bitcoin futures fall on second day of trading on very low volume as interest wanes Bitcoin millionaire: Don't buy bitcoin Stocks making the biggest moves premarket: PEP, MAT, VZ, MYL & more Tech high flyers could soar 10% or more next year, investor Paul Meeks says Goldman Sachs predicts bumper returns for commodities next year Amazon is not a monopoly but there's no question why it's so dominant, tech investor Palihapitiya says Starbucks customer laptops hacked to mine cryptocurrency Fed Survey: Tax cuts and rate hikes on the way Social Capital's Palihapitiya says bitcoin is going to $1 million in the next 20 years

Technology

Facebook's $2 billion bet on virtual reality looks like one of Mark Zuckerberg's rare mistakes

Facebook dropped $2 billion to acquire virtual reality platform Oculus in 2014.

Unlike the company’s other big acquisitions, Instagram ($1 billion in 2012) and WhatsApp ($19 billion in 2014), Oculus does not appear to be paying off.

Although Oculus Gear VR headsets are practically handed out with Samsung smartphones, the company’s more expensive Oculus Rift platform doesn’t appear to have attracted any real following. According to market research firm Canalys, Facebook sold fewer than 400,000 units of the Oculus Rift last year, making it less popular than the competing HTC Vive and Sony PlayStation VR, the latter of which has already shipped more than 1 million units.

Anecdotally, it doesn’t seem to be a hit either. I don’t know anyone outside of the technology industry who owns one. I review gadgets and have a house full of toys, and yet I haven’t found any need to buy one. I know people who own the PlayStation VR.

Facebook has never disclosed sales figures, but based on announcements at today’s annual Oculus Connect event, it’s still searching for the right combo of features and price that will make Oculus a hit.

Facebook on Wednesday introduced the $199 Oculus Go, a virtual reality headset that will launch next year. Unlike most other VR sets, it won’t require a smartphone or an expensive PC to use.

While introducing the Go, Zuckerberg said it’s a product meant to fill the gap between the affordable Gear VR and the Oculus Rift. It’s the company’s plan to attract a wider audience… probably because the general consumer isn’t flocking to buy a gaming computer and a $400 headset.

Zuckerberg permanently dropped the price of the Oculus Rift to $399. It launched at $599.99, then fell to $499.99 before Facebook introduced a $399 summer sale that included a controller. A a price drop wouldn’t be necessary if people were actually buying the Rift.

Us regular Joes don’t want to hang out in VR — at least not yet — but Facebook keeps jamming the idea down our throats. It introduced new avatars that can be customized and feature more lifelike facial expressions on Wednesday. But why?

Altspace VR, a firm that raised $10 million and once ran one of the more popular social VR experiences, originally shut down in August citing the “general slowness of VR market growth.” It has since been acquired by Microsoft, which hopes to bring it back to life with its Mixed Reality headsets. This is probably the first time you’re hearing of Altspace, and that’s the problem.

There’s no must-have app that’s pulling people into the Rift or VR. Sure, it’s fun to look at 360-degree photos or short video clips on the Gear VR with a Samsung phone, but there isn’t a real compelling reason to plop down $400 plus the price of a gaming computer for VR. Facebook needs this, it’s what helps sell gaming consoles like the Xbox and PlayStation. Most readers can probably name a game for one of those platforms, but can you name an app for the Rift?

It’s still early for the VR industry and firms such as Sony have seen relative success. Canalys also estimates that there will be 20 million headsets in the market by 2020, which means there’s still time for Facebook to turn this ship around and show the world why we really need to buy an Oculus.

On the other hand, Instagram exploded from 30 million users when Facebook bought it in 2012 to more than 800 million. WhatsApp had 450 million users when Facebook acquired it in 2014 and now has more than 1.3 billion users. The return on those buys in such a relatively short period of time certainly seems to have been greater than what Facebook has received from Oculus.

CNBC reached out to Facebook for comment but a spokesperson was not immediately available.

Source: Tech CNBC
Facebook's billion bet on virtual reality looks like one of Mark Zuckerberg's rare mistakes

Comments are closed.