Headset Reality Wars: Meta @ $1B Quarterly VR Revenue & Apple Vision Pro Sells 200k Units in 10 Days

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Product Minting

Story written using the unofficial Axios Template. Featuring image generated via DALLE prompt: typical apple customer with a vision pro on a couch next to a typical facebook customer with an oculus headset on. above their heads in a shared/mixed reality world, they fight.

The lead:

Reality Labs, the VR subsidiary of Meta and makers of the Oculus headset, passed $1B in Q4 Revenue, according to Meta’s earning call. Zuck said, “I expect (Quest 3) to continue to be the most popular mixed reality device.”

- Zuckberg on 2/01/24 earnings call

- Zuckberg on 2/01/24 earnings call

Why it matters:

Meta paid $2-ish billion for Oculus / Reality Labs when it had $23M in yearly revenue. That’s 87X yearly revenue. And now ten-ish years later, here it is as $4B+ yearly revenue business. Not only do these revenue numbers show that early adopters are ready and willing to pay for a premium mixed reality interface, but also once again shows it’s hard to bet against Zuckerberg. He consistently guesses what market will grow, buys the emerging startup in that space, and throws them into the Facebook growth engine.


CNN’s Brandon Griggs wrote: “How is this awkward marriage going to work? Maybe it won’t: Facebook moms and Millennial gamers are an uneasy mix.”

From "What’s Oculus VR, and why did Facebook pay $2B for it?"  published 3/26/2014

From "What’s Oculus VR, and why did Facebook pay $2B for it?"  published 3/26/2014

Driving the news:

The Apple Vision Pro also came out this week, and I’m sure folks at Apple believe it will in fact become the most popular mixed reality device. Some of the best reviews are by MKBHD, Casey, and of course, by The Simpsons 8 years ago. Will people wear these in public? To combat this isolated astronaut vibe, Meta teamed up with Ray Ban to also offer smart glasses - as the Vision Pro evolves, I think there could be versions that look more and more like sun glasses, or we as a society may just learn to accept our fate as a heavily goggled people.

Reality check:

At $4k each, Apple will need to sell 1M units to reach the $4M in yearly revenue, Reality Labs 4th quarter revenue rate. In the first ten days, they sold 200k units. And Apple’s already built the infrastructure of 520 premium physical stories to distribute these devices about as fast as they can make them around the world, but am unsure how much that will matter in the future of hardware device sales. The mixed reality headset wars are on! Just think of how much money there is to be made on unique chargers!

The big picture:

When it comes to these mixed reality headsets, what use cases will drive adoption? Meta’s steered into gaming, and now Apple’s steering into productivity. But both want to sell on this is just a cool fucking device with the earliest access to computing’s next interface. And no one truly knows what use case will drive market share until it does.

What they’re saying:

Ma.tt Mullenweg blogged three paragraphs detailing a rough first experience and onboarding with the Apple Vision Pro before concluding: “Just like I learned to type I think I’m going to need to learn to become fluent in this new interaction paradigm. I did have a before and after feeling, like the world had shifted, not unlike when you saw the first iPod or iPhone.”

Be smart:

Screens are not essential to the internet. We’ve been raised on them, through them we interacted with the cloud of information. Maybe it’s not flat. Maybe it’s a goggle. Maybe it’s a Google. Maybe it’s an Apple. Maybe it’s this Meta. Are you reading this from your mixed reality headset? Probably not yet.

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