Oculus was Christmas #1: will Facebook's Meta gamble pay off?
When Facebook changed their name to Meta earlier this year, it raised questions about their future
- Did it mean that they saw limited further growth in their Facebook advertising model?
- Has Facebook become dominated by the older generation?
- Was VR/Metaverse actually the next big thing for the future?
Some of those questions were already being asked even before the name change, and the uncertainty was weighing on the share price.
Zuckerberg had already highlighted the direction of travel back in July:
“We will effectively transition from people seeing us as primarily being a social media company to being a metaverse company”
FB was well off the highs by the time the name change was announced at the end of October.
Even as the stock rallied for the next few weeks, analysis of the potential for the metaverse to drive the next phase of growth for the company was, at best, inconclusive.
But that narrative is starting to shift. On Christmas Day the Oculus app was the number one App Store download in the US.
Actual sales figures are not available but that ranking certainly suggests strong consumer interest, and that oculus headsets were likely a popular gift.
As usual, markets needed no second invitation. The stock rallied after gapping higher on the open, closing near the highs on the first trading day after Christmas.
What exactly is the metaverse?
Over to you Mark Zuckerberg!
- “We believe the metaverse will be the successor to the mobile internet,”
- “We’ll be able to feel present – like we’re right there with people no matter how far apart we actually are.”
- “You will be able to teleport instantly as a hologram to be at the office without a commute, at a concert with friends, or in your parents’ living room to catch up,”
- “Within the next decade, the metaverse will reach a billion people, host hundreds of billions of dollars of digital commerce, and support jobs for millions of creators and developers.”
Those comments really highlight the scale of the task ahead, and the huge potential if it becomes reality. It’s a grand vision, and one that tech analysts expect to take at least 10 to 15 years to realise, if ever.
Wider adoption and interest in the oculus headset is a key step for Zuckerberg’s vision to be realised. As the user base grows, user data will guide future innovations as creators see how people are using the metaverse.
However, this is merely the first step in a long process.
In this video Zuckerberg explains “The Metaverse and How We'll Build It Together” at the Connect 2021 event:
And this vision isn’t just about gaming. The video also touches on:
- Social connections
There’s also a section on “Building the metaverse together” where he clarifies that "It's a future that is beyond any one company. That will be made by all of us,".
It seems inevitable that the world will continue towards a more virtual, augmented future. Whilst Meta definitely has a head-start, it’s not yet clear that the social media behemoth will be at the heart of the metaverse as other tech titans strive to catch up.
Not investment advice. Past performance does not guarantee or predict future performance.
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