Meta née Facebook held its Connect 2021 developers conference two weeks ago, and it was all about the Metaverse. Mark Zuckerberg made it clear the company is putting all their wood behind the Metaverse arrow.
Perhaps one of the most important things announced, which was only touched on briefly, is that Meta plans to sell their headsets at or below costs. As John Carmack later said, “There’s no profit in the headset.”
Carmack talks about this starting at about the 40:05 mark in his keynote:
Below is my transcript of the roughly 90 seconds where Carmack talks about the implications of this.
Eventually the mature VR headset market should cover all the niches that mobile phones do, everything from $50 budget phones to $2000 ultra luxury phones.
But we only get to make a couple of points
We used to early on in Oculus talk a lot about the possibility of kind of 2nd or 3rd party headsets that could interoperate with our ecosystem.
That turned out to be really challenging to do because like Mark said we sell our headsets at a loss or break even. There’s no profit in the headset.
There’s no way that a company could go and say I want to make a budget headset. I’m going to undercut the prices here without wanting to be able to negotiate for a cut of the ecosystem revenue. That’s just kind of the way those things work.
And at the high end, while we can imagine somebody going and saying well I’m going to make a very expensive headset, most of the interesting features that we talk about, things like eye and face tracking and world tracking, these are things that require deep core system software integration to really make them valuable, and so we can’t work that closely with another company dealing with that. It’s just really, really challenging.
There’s still a couple of spots where it might work.
If a company made a super-wide FOV headset or a super high resolution headset that was still basically the same thing, it’s still exactly the same sensors or exactly the same modalities that we have in Quest 2, maybe something like that could work.
But there’s nothing like that really going on right now.
Now throw in all the game studios Meta has acquired recently
Beat Games (Beat Saber)
Sanzaru Games (Asgard’s Wrath)
Ready at Dawn (Lone Echo)
Downpour Interactive (Onward)
BigBox VR (POPULATION: ONE)
Also throw in perhaps the most well-received business solution for VR - Horizon Workrooms.
I can imagine other headset makers feeling a bit nervous right now.