
The Problem with Facebook and Virtual Reality - denzil_correa
https://stratechery.com/2018/the-problem-with-virtual-reality/
======
segphault
I have a Rift, but I've never purchased any content from Facebook's
marketplace. I use Steam, because that's where my gaming library lives. As
long as the headset is tethered to a computer, Valve is going to capture the
content distribution revenue. Facebook had to make a standalone device,
because they never had a chance of monetizing anything other than the hardware
itself on the desktop. I think this is a point that is often overlooked.

Given the Facebook's generally poor history of ecosystem stewardship, I don't
see why any gaming enthusiast would even want them to be the arbiter of VR
content distribution. Valve is far from perfect, but I'd much rather give my
money to them than Facebook.

~~~
roymurdock
Facebook isn't going after the gaming market (long term), from what we've seen
in their demos, they are targeting the enterprise (read:$$$) near-term with
virtual meetings. Long term they are targeting casual entertainment consumers
(read:non-gamers) with events such as virtual sports/movie viewing and more
immersive news/videos such as their VR tour of Puerto Rico [1].

Facebook is much better situated to work with non-game enterprises and
entertainment licensing/distribution companies than Steam.

Not that I _want_ Facebook to excel here, I don't use Facebook or Instagram
and personally I find the thought of VR business meetings/news/friendships
pretty distasteful, but just a 3rd party observation.

[1] [https://www.theguardian.com/technology/2017/oct/09/mark-
zuck...](https://www.theguardian.com/technology/2017/oct/09/mark-zuckerberg-
facebook-puerto-rico-virtual-reality)

~~~
kevin_thibedeau
Not going to happen if Facebook login is required.

~~~
saagarjha
Facebook@Work?

~~~
r00fus
Who uses that?

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sebringj
The Quest is a fantastic direction to go in making immediate playability and
usability in real-world space with more than one player in the same area and
without the PC/wires which is the problem with the other headsets. The Go is
just too minimal and no 6dof so its like a loner airplane use to pass the time
that makes you ill. We know the Wii was fun and Nintendo never needed amazing
graphics, it just had to be reasonably priced, function well and be fun to
play with friends. Check check check. Sorry Iribe.

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artemisyna
The author of this article makes an interesting argument based on historical
fit, but I do wonder how his perspective would change if he viewed the Oculus
acquisition in the lens of a 20-year investment for FB.

~~~
aetherson
Is there any evidence at all that Facebook has a 20 year timeline about, like,
anything?

~~~
artemisyna
[https://www.facebook.com/Oculusvr/videos/272240096742532/](https://www.facebook.com/Oculusvr/videos/272240096742532/)
\- Go to about 1:15.

Maybe not 20, but having a 10 year goal and being able to give direct updates
2 years in isn't bad. :)

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georgeecollins
The author points out that Apple made their watch without a strategy, and let
the market figure out what it is useful for. But then he says that Oculus has
a problem because they have a use case in mind for their VR. Maybe, but I
think the real reason why they have to push mobile based VR is that it is the
only kind of VR that has a chance to get to a critical mass of users, because
of cost and ease of use. Without a critical mass of users, you can't have
software developers creating products to figure out the good use cases.

~~~
r00fus
Apple Watch was meant to usurp Fitbit's market and has succeeded.

While Apple may have dreamed of killing the luxury market its clear they had
designs on the fitness market, doubled down on the series 2 and kept marching
forward.

~~~
brlewis
Disclaimer: I work for Fitbit, but don't speak for Fitbit.

According to the article below, an estimated 52% of Apple Watch sales in 2017
were Series 2 or earlier. So in 2017 the most appealing feature of an Apple
Watch was a lower price. This is not a sustainable business model. You could
find older Apple Watches during the holidays for $200. What Apple is trying to
do, and I dearly hope they succeed at it, is to create a product so appealing
that people will buy the latest edition at full price. I think such a success
would take pressure off Fitbit's market.

My personal opinion, though, is that Fitbit's product lineup in 2018 ia better
positioned than ever to compete with deeply discounted Apple Watches. Of
course there's the Fitbit Versa, but smart features are even getting into the
basic tracker line with Charge 3 getting app notifications, and Charge 3
Special Edition getting NFC payments.

[https://investorplace.com/2018/02/holiday-apple-watch-
sales-...](https://investorplace.com/2018/02/holiday-apple-watch-sales-
record/)

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olivermarks
I don't own any VR gear and haven't explored, but isn't this one of those tech
'adoption' areas that is driven by porn, like VCR's were? FB & porn don't seem
like good bedfellows, as it were...

~~~
wlll
I've owned an oculus rift DK2 and have owned a Vive since the pre-order days
and as far as I can tell VR is almost entirely _not_ driven by porn.

The problem is you can't just simply film a scene (be it porn, regular film,
or some sports thing) with a couple of cameras and send it to someone to
experience on a headset. People need to move their heads around, and fixed
camera positions don't allow for that. When someone moves their head and their
view doesn't move they start to feel sick.

There's possible ways around this. Light field tech, or CGI actors etc, but
neither of those are quite there yet. As such, porn as it exists in VR today
is effectively just putting a really really big screen in front of you in VR.
It's not actually VR.

~~~
wincy
That’s not exactly right. The immersive stereoscopic is pretty crazy. I had my
wife try it and she said “the human race is going to go extinct!” You can’t
move around, but the experience of a part of your mind thinking “wow this
gorgeous woman is HERE” is EXTREMELY compelling.

~~~
i_made_a_booboo
I second this. It's pretty fucking out there.

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zaidf
It is bold of Stratechery to make a longterm bet against any face-based
device. The press of the 90s and early 2000s was laden with writers claiming
in essence that there won't be any smartphone revolution. They'd have ample of
proof from a wide range of mobile hardware products that failed spectacularly
-- from the Newton to the Palm Pilot.

Then we got the iPhone.

~~~
biswaroop
I didn't read a long term bet against a face-based device. He focuses on
facebook's value as an app-based stimulant, and how VR occupies a completely
different (and possibly limited) niche. In fact, Stratechery claims that AR is
more promising, and that Apple is well-poised to create a face-based device.
His main point is: unless the face-based device joins us in our every day
activities like the smartphone, it's not going to be directly useful to
facebook.

~~~
zaidf
_unless the face-based device joins us in our every day activities like the
smartphone, it 's not going to be directly useful to facebook_

Isn’t that obvious / circular reasoning? It’s basically saying “unless people
start using VR a lot and it becomes more than a niche, it won’t help
Facebook.”

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overgard
I really have trouble seeing VR becoming mainstream for two reasons that
really have nothing to do with technology:

* Real world space. I know personally I'd have to sell some furniture to make it practical in my apartment. I think a lot of young people are in the same boat -- if you live in a major city and you're young it's hard to really afford enough space for this kind of thing. I'm not gonna rearrange my living room for it.

* Weird movement. Like, most games are either vehicle based or use some sort of teleportation mechanic. There's a really hard limit on what you can do with VR without making a lot of people really sick; and even if you solve the motion-sickness you still have a situation where you're tethered to a specific spot with a limited amount of movement before you walk into a wall.

I don't really see the enterprise usage either. How is it that much of an
improvement over a webcam and a google hangout?

~~~
sigi45
I would first think about what mainstream means and than if or how it is
relevant for VR.

Companies will and already using it for training.

There are VR experience centers.

Porn and gaming will keep people playing around with it.

It will become easier to use, with more content, lighter and cheaper.

Good VR is a crazy experience but not cheap. Let's wait a few years.

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acconrad
VR does seem like the logical next device frontier for Apple, but Oculus
really has a significant early-mover advantage. I don't agree that it's
exactly a mistake to have bought Oculus, but I do think we're still 5-10 years
out from mass adoption (which also makes it a great time to get involved as a
tech person and claim your niche!)

~~~
toast0
When has first (early) mover advantage been used successfully against Apple?

Certainly not in portable music players, smart phones, or smart watches. I
have no doubt Apple could convince people it invented VR as well.

~~~
dkrich
> When has first (early) mover advantage been used successfully against Apple?

Maps, streaming music, video, voice assistant, home speakers, browsers...

~~~
swlkr
Apple’s strength is hardware, but you’re right they are behind in these areas

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taeric
Watches and fitness trackers are doing well against them. That said,
convergence is huge and I wouldn't bet against them.

~~~
npunt
Depends on how you interpret the data.

IDC's latest report shows growth from Chinese brands (Xiaomi & Huawei) selling
pretty basic wearables to Chinese audiences, but Fitbit & others have been
dropping, and Garmin is only slightly up (4.1% to Apple's 38.4% YoY growth).

The big split the report cites is as markets mature they want more
sophisticated wearables, which plays to ecosystem strengths of Apple. Garmin
et al (even Android smartwatches) aren't likely to create / purchase the tech
that can compete since Apple seems to be pouring big $ into health tech, so
I'm not sure the future looks good for other brands.

[https://www.idc.com/getdoc.jsp?containerId=prUS44247418](https://www.idc.com/getdoc.jsp?containerId=prUS44247418)

~~~
brlewis
Disclaimer: I work for Fitbit, but don't speak for Fitbit.

My personal opinion is that unsuccessful Apple Watches have done much more
harm to Fitbit than any successful one will. I'm rooting for the Series 4 to
be a market hit. The unsuccessful ones so far have ended up at fire sale
prices during the holidays. The last thing Fitbit needs to compete with is a
$200 smart watch with an elite brand name on it.

Hopefully they'll retain full retail price for their newer models and the two
companies can go back to addressing our respective market segments.

~~~
npunt
Thanks for your insights, really good point!

My hunch is the discounts are mostly related to the early, not-that-great
revisions of Watch, and that future discounts will be less. That said, with
each yearly iteration there is a supply of super old Watches that may wind up
in the bargain bin.

Series 0-2 really seemed early adopter products in the mold of other 1st gen
Apple products (MacBook Air, iPad, etc) and S3 is good but not great.

Series 4 definitely seems like a breakout product where capabilities hit some
critical use cases - Cellular, GPS, ECG, size reduction (42mm->40mm for same
screen size). The platform is definitely hitting its stride.

I wonder if/when Apple offers not only last year's model but 2 years ago model
to hit a lower price point, as they do with iPhones. That's been part of
Apple's strategy to avoid low-end disruption, by segmenting the market such
that cheap products cannot moving up-market because of Apple's middle tier on-
ramps (like iPhone SE and 6S or non-Pro iPad).

~~~
brlewis
Good point about the low-end anti-disruption strategy. It will be interesting
to see how this all plays out.

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vonnik
> In other words, the virtual reality market is fundamentally constrained by
> its very nature: because it is about the temporary exit from real life...

I enjoy VR a lot, but I never put on the goggles. A friend explained it to me
the other day in a way I finally understood. VR requires us to disconnect from
everything around us in a way that few technologies do -- that is, the cost of
VR on our social interactions and situational awareness is almost total, which
is a much greater price than other technologies force us to pay. They went
full immersion, and it was too far... There's a certain irony that a social
network bought deeply anti-social hardware. And yes, before we start talking
about MPORGs, I know that could be social in VR. But I'm talking about the
social costs IRL, which are much less with a technology like AR.

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saagarjha
> Apple also has the right business model: it can sell barely good-enough
> devices at a premium to a userbase that will buy simply because they are
> from Apple, and from there figure out a use case without the need to reach
> everyone.

As far as I can tell, this is only really true for Apple Watch. I don’t think
this can be called a “business model”.

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sigi45
Funny to see someone analysing Zuckerberg this way.

I always think "some student, lucky, got unbelievable rich with a very simple
product"

Zuckerberg is rich that's it.

They can afford playing with VR so they do.

