And how Facebook can change that before it’s too late.
Many years ago I was sitting in a bar when a friend pulled out her shiny new iPhone one. I cooed over a piece of hardware that my broke grad school self was too poor to even think about, but she quickly burst my bubble. “It looks cool,” she said, “but it’s kind of useless. Honestly my Blackberry is so much better and more useful — I can’t even get my work email on the iPhone because corporate won’t set it up. The iPhone is just a toy.”
My friend was, of course, very wrong — but she was right at the time. The Blackberry was, for all intents and purposes, a far superior gadget at the moment; but then the moment changed. Apple built out the app ecosystem and all these things we never thought were possible became second nature. Blackberry didn’t keep up and faded into obscurity, despite being a well-funded early market leader.
This old and mostly forgettable anecdote jumped to mind recently in light of the above pictured Twitter exchange. Right now, Facebook pretty much owns the VR headset market — while HTC, HP, and Pico are all in play, their headsets are far more niche. For the everyday VR consumer, it’s Oculus or nothing else.
Unfortunately, for the everyday VR consumer, the Oculus is a pretty limited experience. There are a handful of good games and some artsy experiences, but a user will blow through those pretty quickly. And if an employer reads about the benefits of VR for training and buys a headset to explore, they’ve got virtually nothing to look at. Ditto for educators. Facebook seems to have leaned heavily into the gaming market and more recently (and confusingly) the fitness market — despite the fact that the number of people who want to work out in VR is pretty low and the campaign is a full year too late. If you really wanted to capture the at-home fitness market, the start of the pandemic would have been the opportune moment, and not the time when gyms are reopening in most markets.
But the biggest problem, the one that could crush the Oculus, is this: Facebook only knows how to build platforms, not content. The vast majority of the content you see when you log in to Facebook or Instagram was put there by you and me — family photos, political rants, silly memes, etc. Facebook built products, and people came.
But VR is fundamentally different. The barrier to making your own VR remains very high; maybe in 15 years we’ll all be shooting 360 videos of our cats and posting them to the Oculus platform, but that’s not happening any time soon.
Let’s think about another FAANG with a super sophisticated recommendation system and a big user base — Netflix. They would have been a better home for Oculus in a weird way, because while they certainly have talented engineers, they understand that all the algorithms in the world are meaningless if you don’t have a virtually unlimited amount of content to recommend. Sure, Netflix licenses lots of content, just as Facebook does with VR content, but they also create originals that drive excitement and conversation and viewership. And Netflix had roughly fifty years of content to license, whereas Facebook has less than ten.
In order to keep its dominance long term in the headset market, Facebook needs to start thinking like Netflix. They need to fund content creation across all verticals, including enterprise, education, gaming, entertainment, and sports. The number of talented creators out there who are scraping by is pretty high, and people are starting to get frustrated. All it takes is one competitor to come along and start building an amazing content library, and the Quest could be relegated to also-ran territory.
I’ll make a confession here — aside from using my headset for work and to watch things friends send me, it mostly sits on my shelf. I’m not a gamer and I prefer running outside to Supernatural for fitness, but still, if a person who has lived and breathed VR for five years isn’t using a headset daily, what hope is there for the average person who picked one up at Best Buy?
We are at an amazing inflection point with VR where the technology is so much better than it ever has been, but the opportunity will be wasted if the content people want to see isn’t created fast.