Facebook Is Uniquely Positioned To Ride The VR Wave

  • Facebook has released a first alpha version of a virtual world for users of VR headsets powered by Oculus Rift technology.
  • Oculus Social is open to users of the Samsung Gear VR headset, powered by a Samsung high-end smartphone like the Galaxy Note and Oculus Rift technology.
  • If VR is the next big wave, Facebook is uniquely positioned to ride it with huge profits.

Since Facebook (NASDAQ:FB) acquired Virtual Reality (VR) company Oculus VR, developer of the Oculus Rift VR headset, in 2014 for $2 billion, technology analysts and investors have been speculating on Facebook's plans for next-generation, Oculus-powered VR.

Facebook is moving aggressively to make VR mainstream, and recently unveiled a lower-cost version of the Oculus Rift VR headset and new media partnerships that aim to bring Facebook VR technology to consumers.

During Facebook's (FB) Q3 earnings call, the company's founder and CEO Mark Zuckerberg said that VR will have important applications beyond entertainment, including social communication and interaction. "That's where Facebook has the DNA to build the best experiences," said Zuckerberg. In fact, analysts have speculated about the possibility that Facebook could launch an Oculus-powered virtual world to take social networking to VR.

Now Facebook has released a first alpha version of a virtual world for Oculus Rift users. The Oculus Social alpha virtual world is open to users of the Samsung Gear VR headset, powered by a Samsung high-end smartphone like the Galaxy Note and Oculus Rift technology.

At this moment, Oculus Social is just a simple virtual theater to watch a movie in VR with friends, but the writing is on the wall. It seems evident that Facebook intends to add features to Oculus Social and transform it into a full-fledged virtual world.

Previous-generation virtual worlds like Second Life became very popular in the second half of the last decade, and generated considerable media hype as the "next big thing" in computing and social networking, but their popularity faded because they aren't immersive enough on the one hand, and proved too complicated for average users on the other hand.

In fact, becoming proficient enough to enjoy Second Life presents a learning curve too long for consumers used to the quick and easy gratification provided by Facebook. But the fully immersive user interface provided by Oculus Rift technology promises to make virtual world much more engaging, and at the same time much easier to master.

According to Computerworld, Oculus Social is a major milestone: It's the first social experience ever provided for an Oculus VR-based platform. "It's a milestone as important as when the first smartphone came out - a first product in its category that will completely change how humans interact with one another."

Zuckerberg is persuaded that VR will be the next major computing platform. Facebook "is committed to [virtual reality] for the long-term," he said. "We’re going to work hard to serve this community. In the future you're going to feel like you're right there. The next logical step is fully immersive VR." Zuckerberg warned against excessive expectations for the early phase of the Oculus ecosystem, but predicted a steady growth similar to that of smartphones since the early 2000s,

"It’s probably not the next five or even 10 years before virtual reality surpasses smartphones, but I’d be very surprised if 15 years from now, we’re all still carrying around little slabs in our pocket that we have to pick out and use, when instead we can just project virtual information into our environment," said Oculus creator Palmer Luckey.

Other companies developing next-generation virtual worlds for the Oculus Rift are Linden Lab, the company behind Second Life, whose Project Sansar is expected to begin public alpha testing in 2016, and Second Life creator Philip Rosedale's High Fidelity, in public alpha since a few months. It's interesting to speculate on the possibility that Facebook might consider acquiring one or both companies.

An interesting data point revealed at the Q3 earnings call is that Facebook is now averaging 1.1 billion users per day. Among the other Facebook services, Instagram has more than 400 million monthly active users, and WhatsApp has 900 million users “and continues to be on a path to reach a billion users and beyond."

If, as all seems to indicate, VR is the next big wave, Facebook is uniquely positioned to ride it with huge profits. Therefore, the push to social VR is likely to contribute to the rise of Facebook stock in the mid and long term.

Show Full Article
5 2
Is this article helpful ?    

Author's Disclosures & Disclaimers:
  • I do not hold any positions in the stocks mentioned in this post and don't intend to initiate a position in the next 72 hours
  • I am not an investment advisor, and my opinion should not be treated as investment advice.
  • I am not being compensated for this post (except possibly by Amigobulls).
  • I do not have any business relationship with the companies mentioned in this post.
Amigobulls Disclosures & Disclaimers:

This post has been submitted by an independent external contributor. This author may or may not hold any positions in the stocks discussed. Neither Amigobulls, nor any members of its staff hold positions in any of the stocks discussed in this post. Amigobulls has not verified the author’s positions in the stocks discussed, and does not provide any guarantees in this regard. The author may be paid by Amigobulls for this contribution, under the paid contributors program. However, Amigobulls does not guarantee the authenticity or accuracy of the information provided by the author in this post.

The author may not be a qualified investment advisor. The opinions stated in the post should not be treated as investment advice. Buying and selling of securities carries the risk of monetary losses. Readers/Viewers are advised to carry out their own due diligence and consult their investment advisors before making any investment decisions.

Amigobulls does not have any business relationship with any of the companies covered in this post. This post represents the views of the author/contributor and may not reflect the views of Amigobulls.

show more

Comments on this article and FB stock

Do share this awesome post