The XR Week Peek (2022.02.07): Meta has invested more than $10B on XR, Hololens 3 may have been canceled, and more!

I’m exhausted after two weeks of overworking, but I’m keeping thriving.. and so I’m here writing you this roundup of the best AR and VR news to keep you informed about what is happening in our ecosystem. I hope you’ll appreciate that!
 
By the way, this new lunar year has begun in the best way possible for me, with two great people, Eduardo and Alan, joining my Patreon, so I guess that the red socks I bought on AliExpress to bring me luck worked! 😉
 
Before leaving you to the news of the week, let me just tell you two things that may interest you:

1. If you missed them, don’t forget to read my predictions about augmented reality and virtual reality in 2022;
2. This Thursday at 5 pm CET AWE Nite Florence comes back! Cecilia Lascialfari and I will talk about “digital rights in the metaverse” together with experts from XRSI. It will be available for free on the new “awe.live” platform, so make sure to register at this link!

Top news of the week

Meta’s earnings report for 2021 has both lights and shadows

We were all waiting for it, and then it finally arrived: Meta has finally released its earning reports for 2021, and for the first time it treated its Reality Labs division as a separate entity, so we know how well it is performing. And there are good news and bad news.
 
Let’s start with the good news: Quest 2 is performing very well, and so is its store. Reality Labs had $2.3B revenues in 2021, up from $1.14B in 2020, with a 2x growth over one year period. The total revenues on the Quest Store alone had been $1B since its foundation in 2019, and this shows that many people are enjoying Quest games. This is good news also for the developers: 120 titles on Quest store have made more than $1M, and 8 even more than $20M, proving once more that some studios can make a living out of VR games.
 
If you make some calculations using these data, the result is that Meta has probably sold 9–10M Quest 2 units until now. These are huge numbers for VR: if you look at the most recent SteamVR survey, you get that Oculus headsets are now at 67% of the whole PCVR market. It’s basically a monopoly.
 
But there is also bad news to talk about. The first one is that Reality Labs had $10B of losses in 2021. Some magazines reported this news as a sign of the failure of Meta’s strategy about the metaverse. Personally, I don’t agree: it’s an investment. Zuck always said that he was going to invest $10B and even more for XR. It’s the money his company is spending to become the leader in the next technological platform, and if he succeeds, it’s actually money very well spent.
 
What is really a disaster for Meta, instead, is how its social media are performing. Facebook is losing users, because of its bad reputation, and because of the fierce competition of social media that attract more the younger generations like TikTok and Snapchat. And its ads business is under a crossfire attack: on one front, Apple with its new data policy is limiting how much data the Facebook app can collect about its users, and on the other one, the EU is trying to enforce its regulation about European people’s data not allowed to be sent to Facebook’s US servers. Meta is trying to find a compromise with the EU, but if it doesn’t happen, it is threatening to leave its business in Europe, shutting down Facebook and Instagram in the whole European Union. For all these problems that affect the main cash cow of Meta, that is the ads sector, the company has lost -26% in the stock market in only one day, for losses over $230B (Zuck itself lost $30B that day). The $10B invested in XR pale if confronted with these numbers.
 
More than caring about the XR business, probably Meta should find a way to keep its social business alive, until it will transition to the metaverse. And as someone suggested to me, actually the metaverse could be the hard pivot that Facebook is doing to solve all the problems it is having on its social media. Facebook can’t appeal to younger audiences, it has a bad reputation, and it is trapped inside competitors’ platforms. So creating new devices that young kids may like (the Quest 2) and that have an independent store (Quest Store) and where Meta can perform all the data tracking that it wants, seems the ideal scenario. Especially if it happens by hiring 10,000 people in Europe, so that it can apply stronger pressures on the EU about its data privacy rules. Zuck noticed that it is slowly losing control of the current technology platform and it is trying to switch to the new one, to dominate it even more. It makes totally sense.
 
This is a pretty extreme pivot, and it is causing internal turmoil inside all the Meta group: the company is suggesting many people from Facebook and Instagram join Reality Labs instead, or it is promoting people working on social media to have also metaverse roles. Some employees are happy with this vision, while others working on social media are leaving the company because they don’t agree with it, or because they feel useless in working in a company that doesn’t put their work at the center of its strategy anymore. There is a bit of internal confusion inside Meta, as it was to be expected when such a giant performs a huge pivot.
 
It’s a transitional moment for Meta, with the company trying to switch technology going all-in with AR and VR. We’ll see if this pays off in the next times… I think the next 24 months will be a good indicator of the success or the failure of this operation.

More info (Meta reports data on Reality Labs)
More info (Meta’s revenues from Reality Labs)
More info ($1B of revenues on Quest Store)
More info (Estimates of Quest 2 sales)
More info (Latest Steam hardware survey)
More info ($10B of losses from Reality Labs)
More info (Meta loses $230B of value in one day)
More info (Facebook and its hard pivot to Meta)
More info (Facebook employees complaining of what is happening inside Meta)
More info (Meta threatens to leave Europe)

Other relevant news

HoloLens 3 may have been canceled

A report from Insider states that Microsoft may have canceled its plans for HoloLens 3. According to the report, there is internal confusion at Microsoft about how to work in the XR sector: some are favorable to building hardware, while others (including the CEO Nadella) are more interested in building platforms and services (like Azure, or Microsoft Mesh). Given the good-but-not-great sales of HoloLens 2, it seems that the platform direction is the most probable one, and so the company may have canceled its plans for a HoloLens 3. There is instead a rumored partnership with Samsung, where Samsung would actually build a new XR device and Microsoft offer the platform on top of which the headset may run.
 
The report keeps saying that this confusion is not beneficial for Microsoft’s XR division: some employees are leaving, taking their expertise to other companies like Meta (that instead has a clear strategy).
 
Microsoft has answered the report saying that “HoloLens is doing great”, and Alex Kipman has tweeted not to believe what you read on the internet. But no one of them has actually refuted the content of the report, and this is a clear sign that there is some truth in it. Plus, to be honest, I heard a similar rumor myself from a reliable source some months ago, so I’m very inclined to believe that it is true (I was asked not to share it, but I think now there’s no secrecy to keep anymore).

More info (Microsoft could have killed the HoloLens 3)
More info (Microsoft answering the rumor)
More info (Report on the internal turmoils inside Microsoft)
More info (Upload VR reporting the news)

Some updates on Meta products

This week we had lots of updates about Meta’s products, so let me list them for you:

• Meta has updated its avatars to make them even more inclusive (adding even the cochlear implants!), and this is something I praise it for. They have also added some customizations in preparations for the Superbowl, so people can decorate their avatars with the team they like the most. The avatar system is now being unified also with Facebook and Instagram: you will be able to have your profile picture on Facebook that is your Meta avatar, or also express yourself with 3D stickers that are made with your Meta avatar. This is huge news because it shows that Meta is trying to unify your digital identity across all its ecosystem. The only issue of this announcement has been the launch video that shows some cringy moments of Mark Zuckerberg and his avatar;
• Meta Horizon will have a mobile version: probably Zuck has noticed that Rec Room is having tons of users from mobile, and is trying to follow the same route. In the meantime, to protect its users from harassment, Horizon will add a user bubble activated by default, so people can’t come too close to you;
• Facebook had to abandon its plans about having its cryptocurrency: Diem (previously known as Libra) will be no more because there were too many regulatory issues to continue pursuing the project. Facebook’s dream of becoming closer to WeChat is not becoming a reality;
• Quest SDK has now a new version that implements the experimental version of the Interaction System. This is a framework that introduces many facilities for applications employing hands tracking: for instance, it makes sure that the hands of the user adapt dynamically to the shape of the object they are holding. This is amazing for us developers, but unluckily it is a feature tied to using the Oculus SDK, which is not cross-platform. Another cool new feature of the SDK/runtime is that now you can test Oculus Passthrough applications straight from Play mode inside your editor on PC via Oculus Link. This can make development iteration times much faster.

More info (New Meta Avatars customizations)
More info (Meta Avatars now on Facebook and Instagram)
More info (Horizon Worlds is coming to mobile)
More info (New user boundaries in Horizon Worlds)
More info (Meta abandons Diem)
More info (Meta releases Interaction SDK)
More info (Oculus Passthrough over Oculus Link)

Plutosphere brings cloud rendering to Quest

You’ve probably already heard about Plutosphere: it is a startup working on a service about VR cloud rendering, so that the users can play SteamVR games on their Quest from everywhere they are. The huge news is that it has finally launched its product, and to my knowledge, it is the first company trying to offer such a service to consumers.
 
You can now find the Plutosphere app on SideQuest VR: with it, you can connect your Quest to the internet to the Plutosphere cloud and play your SteamVR games on the Quest without having a local companion PC. It will be a Plutosphere server rendering the game for you and streaming everything via the web.
 
All of this is cool, and the first reviews of Plutosphere are mostly positive. But it comes with a few caveats: first of all the app is still in Beta, and there are some quirks like the fact that you have to download the game on your server every time you connect to it; then remember that cloud rendering is still a hit or miss depending on the speed of your network and your distance from the closest rendering server; and don’t forget also that it is a paid service: to use it you have to buy tokens from Plutosphere, even if in this early access version some tokens are awarded to you for free every day.
 
It will be very interesting to follow how much success Plutosphere will have: the success of Virtual Desktop forced Facebook to release Air Link… if Plutosphere will thrive, for sure Meta will release its alternative service.

More info (Plutosphere releases its app — Road To VR)
More info (Plutosphere releases its app — Upload VR)

News worth a mention

Apple may implement WebXR in Safari

WebXR is one of the most interesting technologies out there because it lets people enjoy AR/VR content without having to download standalone apps, removing all the friction. But at the moment, WebXR content is enjoyable only on Android devices, because the technology is not compatible with Safari, which is Apple’s browser. But new evidence from developer Maximiliano Firtman shows that four new experimental WebXR features have been implemented in the latest version of Safari in iOS 15.4 beta. These features work only with external devices (most likely XR glasses), but probably they will be extended to mobile phones too. This is huge news for our ecosystem.

More info

Diver-X cancels its Kickstarter campaign

Japanese company Diver-X has just canceled its Kickstarter campaign for the Half-Dive headset, which promised to let you play VR while you were lying in the bed. The campaign was not doing great, and the company was having internal problems with organization and cash flow. Plus, it claims the use case is still a bit niche to make a business out of it. Anyway, Diver-X states that it is not giving up on its dream of this SAO-like headset.

More info (Diver-X cancels Kickstarter campaign)
More info (Diver-X’s official statement)

A gamer injuries his neck while playing virtual reality

A german player fractured his neck by playing virtual reality games. He heard a “crack” while playing, after many days using VR for many hours a day. According to the doctors, it is a kind of “stress fracture”, that is a part of the body that breaks for some kind of continuous repetitive movements (think about the ones from Beat Saber). A pretty disturbing story for us VR enthusiasts!

More info

Mozilla shuts down Firefox Reality

In an unexpected twist of events, Mozilla is shutting down its browser Firefox Reality, which was actually a quite good product. Luckily there will be the “free software consultancy” Igalia that will carry on the project, with its open-source browser Wolvic, which is based on Firefox Reality code.

More info

Two articles on the M-word

As usual, I’m reporting you some interesting articles I’ve read about the m**averse from this week:

• Louis Vitton’s boss sees the opportunity of the metaverse but warns about his hype and bubble. It makes a comparison between it and the dot-com era. He also states that it is not interested in selling cheap digital merch for avatars;
• VentureBeat has published an amazing interview with Raph Kosters, that explains that all the ideas and problems we are facing about the metaverse were actually already faced 20–30 years ago. Back in the time, there were already some virtual worlds having interoperability between them, there has already been written a document about avatar rights, and there were already big concerns about privacy. We should not reinvent the wheel, but build upon what has already been made.

More info (LVMH on the metaverse)
More info (VentureBeat’s interview with Raph Kosters)

Sony acquires Bungie and thinks about Capcom

Sony had to answer fast to Microsoft’s acquisition of Blizzard, and so it has acquired Bungie, the game studio behind the famous Destiny franchise. But even more interesting is what the Japanese company could do in the future: the acquisition spree has just begun, and rumors say that the next one may be Capcom. This may be huge also for VR, considering that Resident Evil games are among the most successful VR games.

More info (Sony acquires Bungie)
More info (Sony may acquire Capcom)

Record VR games in VR format

A redditor has prepared a guide on how to record SteamVR games in SBS video format, that is in 180 VR, so that the gameplay can be replayed in VR. I thought this can be interesting for some content creators, so I’m sharing it with you.

More info (Reddit post announcing the guide)
More info (Actual guide on how to record SteamVR games in VR format)

Ultrawings 2 is the latest VR great game

Ultrawings 2 is one of the most interesting VR games released in the latest times. It may not feature the most detailed graphics, but the game is fun, is challenging, and it guarantees 40+ hours of fun. If you like games about piloting planes, it is a must-have. It got a 9/10 score on Road To VR and an ESSENTIAL score on Upload… this says a lot about its quality!

More info (Ultrawings 2 review on Road To VR)
More info (Ultrawings 2 review on Upload)

Some news on content

• Within CEO Chris Milk has shown a new upcoming feature of fitness game SuperNatural: legs tracking. It is not clear if they have a preview of some full-body tracking by Meta, if they use external hardware (like a phone), or just some heuristics on the head and hands moves, but for sure it is fascinating!
• Vox Machine is going to add a single-player campaign to its mech multiplayer game;
• Virtual Virtual Reality 2, the sequel to the very popular VVR (that was a Daydream game!) is coming on February, 10th. The trailer already promises a lot of fun;
• Meta teases that it will show a commercial with Questy’s during the upcoming Superbowl. It will probably advertise a new space inside Horizon Worlds;
• Road To VR has published an early preview about Zenith, the MMO VR game, highlighting its pros and its cons.

More info (Leg tracking inside Supernatural)
More info (Vox Machine’s new campaign)
More info (Virtual Virtual Reality 2)
More info (Questy’s trailer)
More info (Zenith preview)

News from partners (and friends)

Tom Ffiske’s new book

My friend and esteemed VR professional Tom Ffiske has written a new book called “The Metaverse: A Professional Guide”. It gives you an overview of the current status of AR, VR, and the M-word. The previous one went great on Amazon, and I’m sure this will be a great read, too. Feel free to check it out if you want to support a talented author of our industry.
Learn more

Les Mills BodyCombat

Les Mills BodyCombat is a new VR fitness game made by Odders, the game studio behind OhShape, in partnership with Les Mills gyms chain. The game is very intense and offers great training without you having to pay a subscription. I suggest you check it out on the Quest Store.
 
Odders also wants to gift two of my readers the possibility of playing it for free, so here you are two keys to play the game: first come, first served!

F7J6T-AQ3FT-9WN3P-TFFGN-4XPY7
WKGAH-FYW7K-JX79G-7PPMF-E4WKJ
Learn more (Les Mills BodyCombat review)
Learn more (Les Mills BodyCombat on Quest Store)

OpenBrush v1.0

OpenBrush, the open-source version of Tilt Brush that is being maintained by the community, has reached the milestone of v1.0, adding for this release even more controls and drawing tools. It’s great to see that the community is carrying on the project that Google has abandoned, and now it is thriving and growing even better than before!
Learn more (OpenBrush reaching v1.0)
Learn more (Icosa announcing the 1.0 version and the future roadmap)

Some XR fun

Oh no, the Quest has forgotten my Guardian again…
Funny link

Oculus support at its best
Funny link

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