Meta Aims for Broader XR and Metaverse Footing with Public Meta Horizon OS

After a relatively quiet 1Q 2024, Meta recently announced it is making available its Operating System (OS) for Meta Quest, to be renamed Meta Horizon OS. While no new hardware was officially revealed, three partners were announced to be working on specialized headsets using Horizon OS: ASUS Republic of Gamers (ROG) for a gaming-focused headset, Lenovo for a mixed-used headset, and a specialty Quest 3 version with Xbox.

There are a number of elements to this announcement, but a few of the most notable include:

• Meta is positioning Horizon OS as a Mixed Reality (MR), open ecosystem enabler.
• Social presence and social capabilities are a focus, with cross-platform access to the Horizon social layer available to all developers.
• Coming in the future is a spatial app framework for mobile developers.

In the end, Meta hopes to not only create a new revenue stream through OS licensing, but also to bolster the number of devices available and boosting the number of active Virtual Reality (VR) users across usage types.

While this announcement is primarily framed as a way for Meta to open up the Extended Reality (XR) ecosystem, the full purpose and potential benefits for the company are more complex. The expansion of Horizon OS will enable new devices and content to hit the market, creating an open ecosystem, of which Meta will land on the top.

While Apple has built out a cohesive XR ecosystem over the years, expanding most recently with Apple Vision Pro’s launch, the rest of the market has not seen the same level of commitment or cooperation across vendors. While hardware vendors such as Meta have seen success, the broader ecosystem has felt fragmented, following in the smartphone market’s footsteps. Meta is hoping to fill a similar role as Apple, albeit with a farther-reaching scope.

Android, and Google as a result, has been pitched to be the foundation of non-Apple XR, but at the moment there are a few pieces holding back Android in the XR space:

• Monetization: Going through the Play Store enforces Play Store rules for content hosting and monetization. Not every company has the capability to circumvent the incumbent content store, but if it is an option, most do. This is also true for Apple and the App Store, but the verticalized nature of the Apple ecosystem leaves no other realistic option for that ecosystem.
• User Data and Privacy: Especially important for a company like Meta that sees more business opportunity in user data than XR hardware or software itself. Unique data types like spatial and visual data open up both an opportunity for Meta and a concern for users in accessing and ensuring security for that data.
• Google Itself: It feels that Google has not known how to approach the XR market and has been far more passive than necessary to build (or expand) a name in the space. Rather than investing and growing ARCore and Android-level XR support, most XR improvements have come in individual Google product value adds (e.g., Google Maps Augmented Reality (AR) walking directions). This leads to a lack of direction and faith in a solution built leveraging existing Google portfolios.

Without a pillar to build around on the “not Apple” side, Meta is hoping to step in. For a company of Meta’s size, it sees Horizon OS as an easy way to ensure no monetization split with another party, quicker update turnarounds for devices, greater control (and with it, freedom) for content distribution, and easier access to user data. All the above are boons not only for Meta to create revenue, but also to build an ecosystem around them. By opening the OS to the market, Meta expects to offset any potential hardware sales loss encouraged by new competition through owning development, content distribution, monetization, and user data for these devices.

Expansion of Horizon OS will lead to a unique competitive landscape over the next few years. Purpose-built headsets will become more common, which is already evidenced with the specialization promised by ASUS and Lenovo building on Horizon OS. More hardware choice is always a good thing for consumers and often for the competitors as well, bringing greater attention and knowledge to a market that has seen a number of ups and downs. With more devices comes more users, which will encourage more developers to create more, and more varied, content. Even with Meta’s success with the Quest line, it is still a limited market to create for outside of gaming.

In the smartphone space, competition boils down to Apple versus Android; the XR market could, and still may, follow a similar path, but for now the Android side of the equation is more nebulous. Google has been quiet on XR for a while, with ARCore receiving far less attention than Apple’s ARKit, and a lack of an XR device directly from Google paints a lacking picture compared to Apple. A partnership between Qualcomm, Google, and Samsung has been in the works since early 2024 (at least publicly), which promises a high-end XR device, but Google and Android’s role does not seem significant on the surface. Qualcomm’s XR role remains primarily as a chipset supplier for the non-Apple side of the XR—effort for an open development platform Qualcomm Spaces is ongoing, although its future is uncertain.

Going forward, the role of AI in devices, especially smart glasses, will grow substantially. AI was not mentioned in the Horizon OS announcement, but it’s fair to expect more AI discussion in the future, especially considering Meta’s intense focus on AI more recently. Meta and its competitors in the smart glasses space are honing in on high-value AI applications to drive smart glasses interest over the next few years—we’re seeing the beginnings of this with Meta’s Ray Ban smart glasses and recent feature updates leveraging AI, but competition has not really hit the market yet. Though Horizon OS is currently VR focused (with digital passthrough via cameras for MR), expect to see Horizon OS and its MR and future spatial compute capabilities expand to glasses as well.

For years, Meta has been working to position itself as a pillar of the XR community—first through hardware, followed by the metaverse enabling collaboration, and now leveraging both of those alongside being a platform and development enabler. Horizon OS is a logical next step, and one that will absolutely bring more devices and content to the space. Whether that translates to acceptable revenue for Meta, especially considering the rate at which Reality Labs has been burning through money, is a question only to be answered over time.