Facebook’s Oculus will split into two separate divisions — one focusing on PC VR and one focusing on mobile VR — CEO Brendan Iribe wrote in a blog post Tuesday.
As a result of the reshuffling, Iribe will step down from the role of CEO to lead the PC division, and Jon Thomason, who joined the Oculus team in the summer, will head mobile.
Oculus' split acknowledges the increasing bifurcation of the VR market. The different form factors of mobile and PC lend themselves to divergent use cases and content. For instance, smartphone-powered headsets, such as the Samsung Gear VR, are primarily used to view 360 video, while PC headsets are targeted more at VR gaming. The two businesses will focus on building out these areas:
- Oculus is more concerned with bolstering the number of the platform's users, making its technology available for a range of smartphone vendors. The lower cost of smartphone-powered devices has helped grow the Oculus user base. As of Q2 2016, more than 1 million users were accessing Oculus via a smartphone-powered device, according to Bloomberg.
- PC and console VR offers users a much more immersive and high-quality experience than lower-powered mobile devices. Facebook recently announced it would invest $250 million in building up VR content, and a large portion of this amount will likely be set aside for PC. However, this comes at a higher price point, largely inhibiting adoption. For example, while the Oculus Rift retails for $600, consumers also need a PC or console powerful enough to support the tech. And most potential VR consumers aren’t willing to spend more than $600, according to Newzoo.
Businesses and brands should begin exploring ways to reach consumers via mobile VR content. In the short- to mid-term, mobile will continue to drive adoption of VR, supported by the prevalence of smartphones and low cost of mobile VR headsets. Although the technology is still fairly nascent, early studies indicate that the immersive nature of VR video content is leading to higher engagement and emotional responses with ads shown over the medium, according to YuMe. As adoption increases, it will be integral to have a VR-video strategy in place to reach these consumers.
The virtual reality (VR) market has made significant strides throughout 2016. New VR headsets like the Oculus Rift and the HTC Vive debuted amid great consumer anticipation, while VR content launches kept pace, with Batman: Arkham VR and Chair In A Room garnering encouraging download totals.
At the same time, industry groups and conferences brought developers, investors, and content producers together, helping to further ramp up buzz in this nascent space.
BI Intelligence, Business Insider’s premium research service, forecasts shipments of VR headsets to spike by 1047% year-over-year (YoY) to 8.2 million in 2016. This growth will help propel the virtual reality space to exceed $1 billion in revenue for the first time, according to research by Deloitte. Powering that growth is an estimated 271% increase in investment in AR (augmented reality) and VR companies from 2015, according to estimates from CB Insights.
But while 2016 has indeed been an important year for the VR market, it hasn’t necessarily been a big one — at least not compared to its future growth potential.
VR headset shipments will continue to grow in the years ahead, driven by the introduction of new content that will appeal to a broad swath of users.
Jessica Smith, research analyst for BI Intelligence, has compiled a detailed report on virtual reality that explores the highly fragmented and volatile VR market that emerged in 2016, lays out the future growth potential in numerous key VR hardware categories as driven by major VR platforms, and examines consumer sentiment and developer excitement for VR, presenting which headset categories and platforms are most poised for success in the near- to mid-term.
Here are some key takeaways from the report:
- This has been an important foundational year for the VR market. New hardware and content have brought more options to market to appeal to a wider set of consumers.
- But the growth seen this year is merely a foreshadowing of the future. The highly fragmented VR market today will eventually narrow as the market grows and matures.
- After considerable progress in 2016, the VR market is ripe for transformation in 2017. Developers, consumers, investors, and hardware makers have a host of options from which to choose, each with their own strengths and shortcomings.
- The environment is poised for the first killer VR app to hit the market sometime in 2017, which will be a major catalyst for consumer adoption of VR hardware.
- Not all headset categories and platforms will emerge as winners in the near future. More immersive headsets that offer the best VR experiences are too expensive for most consumers. Alternately, affordable headsets that rely on smartphones as processors offer sub-par experiences that can induce sickness.