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Facebook, Inc (FB - Analyst Report) is betting big on virtual reality. At Oculus’ developer conference held last week, the company looked eager to bring VR technology to mainstream.

Highlights of the Conference

The most surprising announcement made at the conference held at San Jose Convention Center, CA, was Santa Cruz, a cheaper standalone VR headset with inside-out-tracking. Facebook said that the product was still in a prototype stage. CEO Mark Zuckerberg was quoted by media reports as describing the headset as some way between Samsung VR Head Gear (that relies on phone) and Oculus Rift that needs to be connected to a high end PC. However, Zuckerberg refrained from commenting on the price and the shipment of the standalone device.

Moreover, Facebook announced another $250 million investment to develop VR content ecosystem.

Further, the company launched Oculus Touch, a pair of standalone/wireless motion controllers for its Rift headset for $199. Rift initially began shipping with Microsoft’s Xbox One controllers. Facebook is offering extra sensors priced at $79.  It also unveiled new earphones for $49.

Oculus has designed an altogether new form of social interaction called Oculus Avatars. The new feature will help people create their customized VR avatars. After helping users to create their own avatars, Facebook will provide Oculus Rooms and Oculus Parties. Users of “Rooms” can hang out with their friends in virtual reality, watch movies or play games while Parties will allow them to make VR voice call to eight people.

Why is Facebook Eager to Take VR Mainstream?

Facebook had acquired Oculus for $2 billion in 2014. With Oculus, the company is trying to fuel its ambitious AR/VR efforts. Oculus has long been dubbed as a multibillion dollar opportunity along with Facebook’s other subsidiaries like Messenger Instagram and WhatsApp.

Following the acquisition, Facebook launched just one product—Rift— earlier this year. Rift was one of the most highly anticipated products in recent times as it promised to bring a fully immersive VR experience right into the living room. However, the reviews were somewhat polarizing, reflecting a stark difference in opinion between the tech community and the general public. 

Also, Facebook faltered with shipments of Rift when it launched it in the U.S this March. “Unexpected shortage of components” caused a delay in shipping of pre-orders of the much anticipated VR headset, much to the dismay of customers. The need for a high-end PC, potential health hazards and stiff competition from about to be launched (also relatively cheaper and compatible with PS4) Sony Corp’s (SNE - Analyst Report) PS VR headset and the already available HTC’s Vive are some other things that Facebook needs to be watchful.

Despite Rift’s shortcomings, one thing is for sure that AR/VR technology is here to stay. In fact, it is the next big technological innovation along with AI technology. According to recent IDC report, global revenues of the AR/VR market are expected to grow at a CAGR of 181.3% from $5.2 billion in 2016 to over $162 billion in 2020. Not just Facebook, all big tech behemoths right from Alphabet Inc (GOOGL - Analyst Report) to Inc (AMZN - Analyst Report) are trying to grab a share of this lucrative market.

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