It’s official. Facebook Inc (FB) has ushered in the era of mass-marketed high-quality virtual reality by delivering the first Oculus Rift headsets last week. Those who own FB stock solely because Facebook is blazing the virtual-reality trail, however, already have reason to be concerned. Aside from a supply snafu causing a shipping delay, the early reviews of the Oculus Rift aren’t exactly glowing across the board.
That is, most people like most of what it does, but enough people found some drawbacks to cause concern.
And yet, beyond the most superficial critiques of the device — none of which came as a real surprise — it’s not as if owners of FB stock should run for the hills. Aside from the fact that virtual reality is still only a tiny piece of the social networking site’s revenue model, the Rift is still going to be everything it was supposed to be … no less, and no more.
That’s the long way of saying everyone needs to get a grip and recognize virtual reality was never supposed to be put on the same pedestal that a universal cure for cancer would be. It’s just a toy (albeit a very cool one).
No Sweat for FB Stock … Yet
Just to reset FB stock owners as well as technology-lovin’ consumers who’ve lost sleep thinking about the Oculus Rift, it’s an effective execution of a not-so-new idea. It was never going to be a life-changing, world-changing idea, however. Everyone still has to get up and go to work tomorrow, with or without the Rift’s presence on the planet.
Indeed, most people living on the Earth will not own a virtual-reality headset anytime soon, and of those who don’t plan on owning one in the foreseeable future, most of them won’t feel they’re living a sub-par life because of it.
It’s a product, mostly created as means of entertainment.
Still, to the extent the Oculus Rift should find (or create) a market, a couple of criticisms have surfaced that are worth acknowledging. None were unexpected.
The biggest complaint? Headaches. Wearing the virtual-reality headset for too long and/or immersing yourself in a visually-intense “world” has reportedly caused eye-strain leading to headaches for some users. Along with the headaches came a few bouts with nausea.
No one can rightfully claim they’re shocked by this. Digital eye fatigue is as very real thing. It has been for years, mostly stemming from the advent of computers. Placing a digital screen just centimeters away from your eyes and then preventing them from stereoscopically working as they normally do in order to create a 3D effect will inevitably lead to headaches.
Most current and would-be users were likely tacitly counting on it.
The second complaint about the Oculus Rift was the cost of the computer necessary to power it. The high-end systems needed to power the 3D high-def imaging start at around $1,000 apiece; packages with the headset and appropriate computer start at $1,500. But again, that was understood a year ago. Nobody balked then.
Perhaps the strangest complaint was the terms and conditions of using the Oculus Rift.
In short, Facebook is going to watch and see how you use the Oculus Rift, compile that data and then turn around and use it in a variety of ways that very likely will include marketing appropriate products and services to you.
It’s odd, in that every company in the world is doing the exact same thing. Alphabet Inc
(GOOG, GOOGL) “reads” e-mails to and from Gmail accounts to display relevant banner ads. Retailers that offer free Wi-Fi track which sites you visit while in their stores, and know if you’re comparing prices. Amazon.com, Inc. (AMZN) knows the value of the home you live in, and can accurately presume your income based on your shopping habits and address.
It would be odd if Facebook wasn’t being intrusive.
None of it really matters though. Even the few people who’ve voiced complaints about the Oculus Rift still like it, and will like it even more when the hand controllers are released later this year.
Moral of the story?
Every new product has critics when it’s first unveiled to the masses. Most new products face some sort of shipping or production impasse early on. The Oculus Rift hasn’t been an exception. It just doesn’t matter. It’s a good product that enough people will demand (they already have) to make it viable, and Facebook doesn’t have to get in a hurry to drive adoption of the technology.
Indeed, the only race Facebook will be in is with the recently unveiled competing device HTC Vive, and even the Vive isn’t a strong competitor yet. Facebook can temper its production to meet demand as it materializes. For that reason it’s still a relatively low-risk venture.
Bottom Line for FB Stock
It’s unlikely any Facebook investors own FB stock strictly as a play on the budding virtual reality market. But, to the extent FB stock was and is a VR play, the early reception could paint a seemingly grim picture. Don’t jump to that conclusion though. Beating up on the Oculus Rift is fun, but those reviews aren’t necessarily relevant.
And again, even the criticisms are footnoted with a lot of respect and enthusiasm about the device’s potential.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
