Facebook Is Inching Closer Towards Its Social Virtual Reality App
More than a year after it established a dedicated team for virtual reality (VR), Facebook (NASDAQ:FB) recently unveiled its first virtual reality app “Facebook Spaces” at the annual F8 developer conference. This app will use the company’s Oculus Rift VR hardware and will create a new experience for Facebook’s users. On Facebook Spaces, users can interact with their friends with a “real” feel. While the app currently appears as an animated motion picture for users to “hang out” with their friends, according to the company this launch is the just the beginning of using virtual reality in social media. The company has launched Facebook Spaces in beta and it plans to bring this experience to several other platforms in the future while constantly working on improvements. We believe virtual reality holds strong potential for Facebook as it satiates the users’ desire to explore newer and better ways to communicate and share with friends. Further, making virtual reality mainstream can ensure that Facebook benefits from its acquisition of Oculus.
“Real Feel” Can Attract Users, Advertisers And Boost Hardware Sales
The greatest benefit of virtual reality for social media is its “real experience” which should engage users better. Facebook Spaces gives an “in person” feel to users and they can interact with their friends with a more human element. We believe a different and a more personal way of interaction on social media should attract, retain and engage users better. Facebook is pioneering this concept in social media, giving it a first mover’s advantage. While advertisers are still reluctant to spend heavily on VR media, this trend is likely to change over the long term. Facebook is looking to make VR more mainstream and, as user engagement increases, it will attract advertisers to this platform. Deutsche Bank estimates that there will be 154 million mobile VR users by 2020, but only 3.2% of them will be daily active users.
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Making VR more mainstream can also enable Facebook to generate higher revenues from its investment in VR hardware. While Facebook Spaces will be accessible via all VR hardware and not restricted to Oculus, it should drive sales of the Oculus headset. As the company works on improving the app and making the VR technology available at a broader scale and a cheaper price, this can become a long term growth driver for Facebook.
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