Facebook’s String of AR/VR Investment Continues across Product, People, and Partnerships

Not to be outdone by others in the space, Facebook has continued to bring news of its Augmented Reality (AR) and Virtual Reality (VR) ambitions to light through new product launches, upcoming product research, business structure announcements, and partnership and funding opportunities.

• Perhaps most notably, the partnership between Facebook and Luxottica has brought about Ray-Ban Stories, a “smart frame” glasses product with no displays
• Facebook is also beginning data collection for its future Project Aria smart glasses product
• The company’s Chief Technology Officer (CTO), Mike Schroepfer, is stepping down to be replaced by Andrew Bosworth, the vice president of Reality Labs
• On the VR side, integration with Zoom is coming to the company’s immersive collaboration platform, Horizon Workrooms
• The company is aiming for a hiring spree with nearly 700 open positions across AR/VR fields
• Finally, Facebook has begun a US$50 million investment fund for metaverse research and collaboration

They are not alone—Alibaba, Epic Games, Google, and many other players are hiring, investing, and researching both the metaverse specifically and AR/VR more broadly.

The metaverse continues to be the hot buzzword of the second half of 2021. While only one of the above announcements is a strictly metaverse announcement, all AR/VR activity gets folded into metaverse ambitions intrinsically. Facebook’s long-term goals are to transition into a metaverse company rather than a social media company. An investment fund is a solid first step to building the partner ecosystem that’s necessary for a large-scale metaverse platform; US$50 million is an objectively substantial number, but for a company the size of Facebook whose future ambitions are so clearly set on the metaverse, expect that number to grow considerably in short order.

Ray-Ban Stories are not AR glasses, at least by ABI Research’s definition (i.e., those glasses that require a display). However, it is a logical first step into non-VR Head-Mounted Displays (HMDs) for the company and will act as a test bed for Facebook. The research from Project Aria (small scale, AR specific) along with Ray-Ban Stories (larger scale, not AR specific) will combine into a sizable and useful dataset for the company.

Andrew Bosworth’s new, future role as CTO again emphasizes that Facebook believes in AR/VR and the metaverse not only as a market but also as a substantial piece of the company going forward. Bosworth’s work with Reality Labs will allow for more of an AR/VR presence to trickle into other non-AR/VR areas—and this is also evidenced by Oculus’s hiring trends that span research, engineering, design, content creation, marketing, and more.

Despite immense activity and focus on the metaverse and AR/VR across markets, there is of course never a guarantee of success for even the largest of companies. Facebook seems to be doing many things right in its approach of the metaverse, but obstacles both new and old remain. The company’s track record around privacy will limit its user base to some extent—and whether that limit will be impactful remains to be seen. The nature of the metaverse requires technology and service interoperability, and this could bring pressure on Facebook from both its user base and its included partner operators within the platform to improve privacy and security metrics. There’s no rule book for the metaverse—there’s barely an acceptable definition of what it is—so there will be a learning curve with all aspects of the platform, privacy included.

End-user value is always a concern for new platforms. Facebook has users in areas with existing products—Oculus, Instagram, etc.—which is immensely helpful. Getting to critical mass is necessary for a platform, so being able to bring in existing users in related areas is a huge boon. Each of these platforms offers an entry point into the broader Facebook metaverse. Some, such as Oculus hardware, are more direct than others, but as the metaverse platform expands, the number of integrated services (and thus user bases) also expands. Ray-Ban Stories, along with Facebook and Instagram social platforms, will offer an interesting first glimpse into how traditional social platforms can fit into an immersive platform from both a content creation and consumption perspective.

The enterprise play can feel disjointed within a metaverse ecosystem that includes consumer applications, and that is partially the case with Facebook as well. Horizon started as a consumer social collaboration platform, and while it remains that, there are increasing enterprise capabilities being added through Workrooms. Zoom integration is a logical next step for Workrooms to bridge the gap between hardware and platform. The Oculus Quest 2 is objectively one of the most successful VR devices, both for consumers and in enterprise. This strong enterprise base means that Oculus’s efforts in Horizon and Horizon Workrooms has a user base it can address from the beginning.

The most interesting and future news from Facebook around the metaverse—outside of new hardware—is likely to spawn out of its new investment fund. The role of partnerships is significant with the metaverse, and funding will enable and encourage those partnerships. Telcos and connectivity players, cloud providers, content development, hardware components, artificial intelligence and machine learning, and collaboration platforms are all invaluable for a persistent end-to-end platform and present valuable partnership opportunities. Facebook may still attempt to build a metaverse platform entirely under the Facebook umbrella and could see some success doing so, but that is not sustainable in the long term.