In the Interview, the specialist said Meta management “regrets” not playing a major role in the current internet era, a move they say “restricted” the platform’s ambitions. The specialist told us Meta’s long-term goal is to have “as much ownership or influence” over the metaverse as possible so it can realise its mission and have some control over its monetisation. To achieve this goal, we were told Meta needs to ensure customers are “comfortable” with the metaverse and “answer difficult questions” around regulation.
Bringing viable and cost-effective VR and AR products to market would help kickstart interest in this technology, the specialist said. Although AR adoption has been slower, the specialist said VR adoption has beaten expectations. Oculus’s Quest and Quest 2 sales have both been strong, according to the specialist, and there are currently 10 million VR headsets in the market. The specialist expects this number to grow to 100 million in the next five years.
The specialist said Meta has “first mover advantage” in bringing hardware into the VR/AR market, noting its AR consumer partnership with Ray-Ban as an example. But it still needs to solve “problems” related to headsets, with the specialist identifying aesthetic issues, as well as technical problems like networking, central processing units and graphics processing units. Meta also has challenges related to its privacy reputation in light of the Cambridge Analytica incident. However, the specialist questioned whether consumers were as interested in this as the media, pointing to the success of Meta’s Portal product which was released just after the episode surfaced.
We were told that Apple is a threat to Meta over the next five years because of the success of the iPhone. The product’s penetration and ability to pair with other technology will enable its hardware to be smaller, lighter, cheaper and/or more powerful, the specialist said. Google is also in a strong position within VR and AR technology, according to the specialist, and along with Meta and Apple, the three companies are the “exciting ones” to watch.
Over the next five years, the specialist hopes VR will grow as “big as Nintendo Switch”, Nintendo’s biggest selling console. And in 10 years, they hope that consumers transition towards using headsets more than then their phones. Although Meta is not yet prioritising making money from the metaverse, the specialist said in 10 years’ time it should be hoping that its USD 10bn investment “starts to pay off”.
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The information used in compiling this document has been obtained by Third Bridge from experts participating in Forum Interviews. Third Bridge does not warrant the accuracy of the information and has not independently verified it. It should not be regarded as a trade recommendation or form the basis of any investment decision.
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