Moving on from Facebook, Meta pitches business on its new VR headset

For years, Mark Zuckerberg has extolled a lofty vision of the metaverse where virtual reality-powered services will transform every aspect of people’s lives, from school environments to their family time.

On Tuesday, the Meta CEO pitched corporate America on becoming one of the early adopters of this vision through the company’s new — and pricey — VR headset, the Quest Pro.

“As in-person work ramps up, we want everyone to feel like they’re present, even if they are not physically there,” Zuckerberg said at Meta Connect, the company’s annual developer conference. “For virtual reality to really reach its full potential, we need to get to the point where the 200 million people who buy new PCs each year for work can do some or all of their work even better in the metaverse.”

To that end, Meta also announced that the Meta Quest Pro headset will offer new integrations with Microsoft products that are ubiquitous in the working world. The Microsoft Teams videoconferencing program will be available through Meta’s Horizon Workrooms, the company’s virtual reality space targeted for teams, the company announced, Microsoft 365 programs will also be offered.

“We are clearly going through a once-in-a-lifetime change in how we work,” said Microsoft chief executive Satya Nadella, who appeared at the conference, “and every organization today is looking for new ways to reconnect, re-energize their workforce at home, in the office and everywhere in between. That’s why we are bringing Microsoft Teams’ immersive meeting experience to Meta Quest.”

Still, Meta faces steep challenges in executing its vision. While it is the clear leader in the virtual reality headset market now, claiming 90 percent of the market thanks to its Quest 2 headset, the company is likely to face competition from companies such as Apple and TikTok parent ByteDance, each of which already offers or is expected soon to release its own VR headset.

And the biggest impediment to Meta’s plans doesn’t have an easy fix: The technology required to accomplish some of Meta’s biggest ambitions for its VR devices is, by its own admission, still years away. Even if Meta manages to continue elbowing out its headset competitors, there is no guarantee that most people will want to don the headsets and spend their lives in a virtual world.

“There’re clear challenges ahead. Look, competition’s going to increase,” said Dan Ives, an analyst at Wedbush Securities. Meta watchers have every reason to be concerned about the strategy. “They bet the future on the metaverse,” he said. But that bet is “risky … especially in this market.”

For now, Meta is targeting its Quest Pro, with its $1,500 price tag, at businesses, creators and virtual reality enthusiasts with a slew of improvements over its previous headsets, including a slimmer design, more vibrant visual displays and an enhanced ability to blend the physical world with the virtual.

In Zuckerberg’s vision of the future of work, employees will be able to travel seamlessly from their own digital work spaces to virtual offices, where they can brainstorm and create with their colleagues just like they do in the real world.

“What if you could collaborate with colleagues as if you were right there together, even if you were far apart?” Zuckerberg asked. “What if you could overlay your work and the people you’re interacting with right on top of the physical world. This device would help you be more present more productive, more you.”

To make that possible, Zuckerberg said its headsets were going to have to become more advanced. For a price tag of nearly five times what Meta’s Quest 2 headset costs, Meta Quest Pro boasts the ability to track wearers’ facial expressions and reflect those in their avatars. Such technology will unlock the ability for users in disparate locations to see how the other is reacting in real time, the company said.

Meta also said its new headsets are more capable at blending the real physical world with virtual reality spaces. Among the improvements the company said it had made to the pro device is including “a high-definition, full-color mixed reality experience” so that users can see the outside world along with their digital experiences.

While Meta has pitched Meta Quest Pro as a worthwhile investment for corporate workers, it will have to compete against other companies with that already have a record of serving businesses and other institutions. Big organizations often turn to VR-powered software to help train their workers for scenarios that are hard to replicate in real life, such as a complicated surgery for medical students or an active shooter drill for retail workers

Anshel Sag, an analyst at Moor Insights & Strategy who covers virtual reality businesses, says those kind of groups might be willing to pay top dollar for a high-end virtual reality device but that Meta will face competition from companies — such as Apple, Pico, which is owned by China’s ByteDance, and the Taiwan-based High Tech Computer Corp. — that have been serving those kind of clients for years. To rise above the fray, Meta will have to offer strategic software capabilities on its devices, according to Sag.

Meta “went all in on Microsoft because a lot of their competitors don’t really have that,” Sag said. “They were very clear that they have lots of partners in this productivity space.”

Meta has got a lot riding on the idea that people in the future will want to congregate in digital worlds with their colleagues or loved ones. Last year, Reality Labs, the division that works on its VR-powered hardware including Quest 2; its smart glasses, Ray-Ban Stories, lost nearly $10.2 billion, according to regulatory filings.

Meta’s big-time investment in VR is happening at a particularly vulnerable time for the company as many advertisers cut spending in an uncertain economic environment. In July, the company reported its first quarterly revenue decline in a decade. This month, Meta implemented a hiring freeze, pausing new offers to job candidates, recruiting and internal transfers, according to a memo viewed by The Washington Post.

But it may have few other choices than to build out the metaverse. The company is facing intensifying competition for advertising dollars and users from newer rivals such as TikTok and Snapchat. And the targeted advertising methods that turned Meta into an economic behemoth took a hit last year when Apple introduced new privacy restrictions that forced app makers to explicitly ask users if they could track their activity across the internet — a request many rebuffed.

If Meta can get a head start on creating the next communications platform, it avoids having to rely on mobile phone platforms to get its services in the hands of users. But it won’t be easy, Sag said. For one, Meta will have to invest in building up software offerings that make it enticing to buy a $1,500 headset.

“The biggest and first [challenge] is price, and then immediately after is content,” he said. “They have got a long road map ahead.”