The move to integrate ads into VR experiences could help Oculus loosen its dependence on Facebook’s more profitable ventures. The company’s recent VR acquisitions could allow it to create VR content with targeted ads seamlessly built in.

Oculus’ app topped the charts after Christmas: The app that supports Meta’s VR headset product became the No. 1 app on both the iOS App Store and Google Play store. This strongly suggests the headsets soared in popularity this year. Before Christmas 2021, the Oculus app only cracked the iOS top 10 in the US. By December 26, it had reached the top five in 14 different markets.

Updating the Oculus Quest 2 headsets then enabling wider access to Horizon Worlds could help Meta generate even more interest and buzz, leading to adoption. Opening up Horizon Worlds in the US and Canada will also attract more developers, who can now openly create experiences with a larger base of users. What’s next?

In Meta’s Oculus ecosystem, the majority of the applications are games, namely first-person shooters that involve killing zombies or aliens. There are also puzzle games, virtual world-type chat rooms to meet other VR denizens, and immersive exercise and meditation apps to help raise your heart rate or practice mindfulness.

In context, the latest Oculus Quest headset starts at $300. This also marks a major shift away from web browsers and smartphone apps, which are how most of the world consumes the internet.

Oculus headsets captured almost two-thirds of global VR headset shipments during Q1 2021. How we got here: Facebook’s artificially low Oculus prices forced most VR makers to pivot to enterprise customers in recent years, but there are early signs of a blossoming consumer market around the corner.

Facebook, Instagram, WhatsApp, Messenger, and Oculus were all taken down by the outage—costing the company $100 million in revenues and wiping out $6 billion from Mark Zuckerberg’s personal fortune, per MarketWatch. The shutdown paralyzed nearly all of Facebook’s internal business and employee communication systems and even locked some employees out of their offices.

Facebook’s consumer VR advantage: Recent VR headset announcements show device-makers are increasingly pivoting toward enterprise customers as a result of Oculus’ unbeatable price point.

For example, Facebook’s Oculus shipments fell just before the company replaced its original Oculus Quest with the Oculus Quest 2 in October 2020. And shipments of the Sony PS VR (originally designed for the PlayStation 4) also declined as the company shifted focus to introducing its new PlayStation 5 console in late 2020.

Meta’s Oculus owns the consumer VR hardware space. Oculus accounted for 53.5% of extended reality headset shipment share worldwide in 2020, per Counterpoint.

Heavy is the head: However, both of these visions heavily rely on the use of virtual reality headsets like those made by Meta-owned Oculus. Wearable VR technology has yet to take off in a significant way, though adoption is expected to increase over the next few years as it becomes more affordable and less cumbersome.

On the hardware front, Facebook’s 2014, $2 billion Oculus acquisition has borne major fruit and become the undisputed consumer VR market leader, recently capturing over two-thirds of global headset shipments. Would it succeed? Given Facebook’s clear pivot into hardware and dismal public trust, a name change makes sense and is probably long overdue.

Oculus Ads. In mid-June, Facebook said it was running a “small test” of in-game targeted ads in its VR device Oculus. Resolution Games’ shooter Blaston was named as the first game to host ads, but the company pulled out of the test after one week due to backlash from users.

Though most of the early focus around XR technology has surrounded gaming—and increasingly larger enterprise solutions like training and onboarding—Zuckerberg said that most of the time Oculus (a Facebook company) users spend on their headset involves hanging out socially.

Article: Oculus adopts Facebook's core business model with ad integration. Article: The UK is the third-biggest tech unicorn hub worldwide.

Facebook’s Oculus held just over half of the VR headset market in 2020, accounting for 53.5% of headset shipments worldwide, according to Counterpoint Technology Market Research. But adoption is still in its early stages. Just 8.5% of the US population owns a VR headset, according to our forecasts.

Since the Oculus Quest 2 VR headset started shipping in October 2020, for example, subscriptions have more than doubled for fitness app Supernatural, according to Mike Verdu, vice president of content at Facebook Reality Labs.

Companies such as Walmart and Verizon are using technology from a startup called Strivr to train employees; Walmart uses 17,000 Oculus headsets to help with training in more than 4,700 of its US stores. The retail giant has used the system to help with skills assessment when selecting middle managers, but also to train employees in responding to active shooters.

Examples of VR headsets include Google Cardboard, Google Daydream View, HTC Vive, Oculus Go, Oculus Quest, Oculus Rift, Valve Index, PlayStation VR and Samsung Gear VR. Augmented Reality (AR): AR enables a user to interact with virtual objects and other types of digital information that is overlaid on top of real-world views.

It will be available on-demand via video and through Sony PlayStation VR or Oculus VR headsets. More Functional AR. 5G and AI will also boost AR—which augments existing views of reality with contextual information.

For example, VR firm Osso VR uses Oculus headsets to train surgeons on certain procedures, and its approach has paid off: In a recent study, the VR startup reported a 230% improvement in surgeons’ performance after training with the tech.

While Facebook is on its way to becoming the VR leader in the US with its Oculus ecosystem, it is also investing in AR. Other heavy hitters, including Apple, Google, Microsoft, and Samsung, are all reportedly racing to introduce their own VR, AR, and/or MR solutions to grow the market and capitalize on increasing demand. 5G is becoming more available.

While headsets like Facebook-owned Oculus’ Quest and Microsoft’s HoloLens feature limited hand tracking via cameras, Facebook’s new wearable would offer greater accuracy and precision, enabling greater levels of immersion. Some prototypes of the wearable use haptic feedback, which would make virtual experiences actually feel real.