Oculus & Meta's XR Hardware Strategy – Leading Applications & Metaverse Announcement Implications

Can you comment on the state of consumer and enterprise AR [augmented reality], VR [virtual reality] and MR [mixed reality] adoption?

The Facebook announcement around the metaverse was huge news. What is your analysis of Facebook’s metaverse strategy and what do you think is Facebook’s role in the metaverse over the next few years?

A notable part of the announcement included Facebook announcing an inflexion in investment internally on this type of technology, such as in Reality Labs. How should we think about where that investment is going and what is that composed of internally?

Where do you think the critical areas are for Facebook to invest, to realise its ambitions in the metaverse for hardware and as a platform? How would you rank the priorities internally?

You referenced the launch of different products. In the mid-to-long term, how do you expect Facebook to monetise its position in the metaverse, given some of the products that have already come out? What is the timeline by product?

It sounds like the understanding of Facebook is that, to have the opportunity to monetise the metaverse scale needs to be there first. How quickly do you expect Facebook to scale up the user base in the metaverse, or how do you think about that scaling issue with the users that are participating in this type of metaverse product? What’s the strategy there?

Facebook has discussed being able to attract in ecosystem developers and/or content creators will be a critical driver of its ability to scale the metaverse and some of the key consumer applications such as Horizon Worlds within the metaverse offerings that Facebook has today. How quickly or how easily is Facebook able to attract those types of developers or creators to the platform? Is there an impact from other platforms regarding the extent to which Facebook competes from a platform perspective against others?

How do you think of the dynamics between Facebook and its ambitions in the metaverse relative to players such as Roblox or Unity? How do you expect the dynamics to play out in the sense of directly competing with one another for these types of content creators or developers?

Should we think of the user base for Facebook’s metaverse products as being hamstrung or defined by the number of Oculus users? Is that the first gateway to think about the potential addressable sub-segment of Facebook’s user base that actually can participate in the metaverse? I’ve heard that Oculus has about 10 million headsets in the market today. Can you discuss the hardware and the user base for Oculus Quest? Is that the first gateway, essentially, to the metaverse and accessing Facebook’s metaverse? To what extent is there interoperability hardware-wise for Facebook’s platforms?

What is your outlook for the adoption of Oculus headsets in the market over the next five years? How do you think about the proliferation of those headsets? You referenced the fact that low-cost virtual reality solutions are of interest to consumers today for a variety of reasons. What sort of shipment volumes might a person reasonably expect for Oculus headsets?

Do you think that the number of Oculus headsets in the market will be more or less than 100 million, say, in five years’ time?

Facebook hasn’t come to market with anything in AR. How does Facebook approach hardware strategy and how actual users interact with metaverse applications? Do you think VR headsets become the dominant form factor through which a consumer will interact? Can you discuss the hardware strategy that Facebook will adopt to ensure that as many users as possible are driven onto the metaverse applications that it produces? Does it need to have an AR-specific device? What is the hardware strategy for Facebook and its efforts to onboard users into the metaverse?

I saw referenced the fact that Horizon Worlds MAUs have jumped about tenfold since early December 2021 to about 300,000 users. Can you help us understand user growth for metaverse applications, specifically for Horizon Worlds, over the next 3-5 years?

Can you discuss some of the major competitors to Facebook’s Oculus line, beginning with Apple? How do you think about Apple’s positioning in the AR or MR market and what does that mean longer term for some of its thinking around VR?

It sounds as though you think a lot of the processing that is done on or within the headset itself would not likely be in the headset going forward, that that would be handled or just offloaded. Is that correct? Is that putting Apple at a strategic advantage relative to Facebook, Oculus or other players? You referenced the fact that the ability potentially to offload processing or other tasks onto the iPhone could be a massive advantage. Do you come down definitively in favour of Apple having a competitive advantage?

You referenced a variety of different players that may try to participate in the emerging hardware market. What 2-3 stand-out players outside of Google, Facebook and Apple do you think may have a disproportionate impact on the market in hardware? Are there any players in particular that you think have a strong offering or unique play?

Could you comment on the progression of different types of reality technologies across MR vs VR and AR? To what extent do you think VR is a stepping stone as an intermediary between more advanced AR, more advanced MR-type applications, or can you discuss the technological development across AR, VR and how those different technological issues are balanced over time?

Over the last few months there’s been a re-evaluation from certain areas about how to think about Facebook’s growth story, especially in light of some of the new data points around the advertising business. You referenced the issues regarding Apple. When we think about Facebook’s strategy, do you think the metaverse strategy is a push to off-set some of the pressures or that some of the focus there is part of a push to off-set some of the pressures that Facebook is experiencing in its traditional platform ad sale business?

What is your five-year outlook for Facebook’s metaverse efforts? Where do you consider Reality Labs?