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The Oculus VR Headset Dominated Christmas
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I spent a few hours playing around with the Oculus Quest 2 headset this weekend and was pleasantly surprised at how much VR tech has improved over the last few years.
Previous headsets from Oculus, Sony, Google, and Samsung were clunky, expensive, and never seemed to provide an immersive experience that was all that much different from traditional television or gaming.
Sure, multi-trillion-dollar companies like Facebook, Google, Apple, Microsoft, and others were spending billions of dollars acquiring companies and investing in research & development, but the hype surrounding the “metaverse” had quickly surpassed the technological innovation.
Still, I think Oculus, the VR company that Facebook (now Meta!) acquired in 2014 for $2 billion, is just beginning to have its moment.
The Oculus app saw a 90% jump in downloads this Christmas vs. last Christmas and became the #1 app in the US app store over the holiday, ranking ahead of prominent social media platforms like TikTok, YouTube, Snapchat, Instagram, Facebook, and others.
Globally, the Oculus app also ranked top-5 in 15 other countries, and roughly 10% of the app’s 13 million lifetime downloads came in the past week.
Facebook doesn’t disclose sales data for the Oculus, so it isn’t easy to ensure complete accuracy, but equity analysts use a combination of things like app downloads, credit card data, and more to estimate how well the product is selling.
The result? Oculus is expected to sell more Quest 2 headsets in 2021 than Microsoft sold in Xbox’s for the first time in history.
2021 Estimated Sales
Nintendo: 20.8 million
Playstation: 13.7 million
Oculus: 8.1 million
Xbox: 8 million
It’s fair to assume that most of this sales & app download data is being driven by the holiday and that we should wait to see how this plays out before making any strong proclamations.
But after using the product this weekend, I also think that this may just be the start.
People love to talk about the metaverse. It’s become one of those buzz words that if you put it in your investor presentation, your valuation might immediately jump 25% — others include web3, machine learning, artificial intelligence, and maybe even gene synthesis if you’re really feeling lucky.
But while everyone has been busy hyping up the metaverse on Twitter and using its opaque definition to raise billions of dollars in 2021 (a record for VC funding), the reality is that the metaverse is already here.
Do you spend hours on your computer, phone, or tablet each day? Do you have friends online that you have never met in person? If the answer to those questions is yes, you are probably already participating in the metaverse without even realizing it.
The real question is what consumer product expands the ecosystem and brings mainstream adoption. Some people think that might happen through NFTs, while others believe Bitcoin & crypto are the obvious answer.
Of course, I think those are helpful, but I also believe that a consumer-oriented VR product like Oculus might have an even more significant impact on mass adoption.
These devices have greatly improved. For example, Oculus products before the Quest headset in mid-2019 required a cable running to a high-powered PC in order to operate. That was a non-starter for most people & annual sales of 1.2 million proved it.
But the new Oculus Quest 2 is a much better product. I watched part of a football game this weekend, messed around on YouTube, and played a few video games like golf & ping pong.
It was much more realistic than I expected—I tried to physically pick up the ping pong ball multiple times, lol—but more importantly, it feels like Oculus has solved the social problem that many believe exists with VR headsets.
You can watch a movie with friends, play other people in video games, and interact with other humans in a virtual world that doesn’t end up feeling all that virtual after just a few minutes.
Ultimately, this will take some time to play out. Many people will never use the product—they don’t care about technology or at least don’t want it infringing on certain parts of their life—but no one is getting younger, and as our world continues to evolve, I think Oculus will end up playing a super important role in the future.
I can’t remember who said it, so apologies for not quoting them directly, but I saw a tweet over the weekend where they were comparing the Oculus Quest 2 to the iPhone 4 — a revolutionary product that transformed society as it continued to get better over time.
It isn’t easy to discuss nuance on Twitter, but if that’s what they meant, then I agree.
Happy new year to each of you! I hope everyone was able to take a few days to relax and enjoy some time with their family and friends — now let’s have a great year!
Talk to everyone tomorrow.
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