Facebook (FB - Free Report) will cease selling entry-level Oculus Go Virtual Reality (VR) headset it launched in 2018, later this year. At $199, the device, which doesn’t need a smartphone or a tethered PC, is one of the lowest-priced VR headsets in the space.
Although existing users will get support through 2022, Facebook will stop updating Oculus Go apps after Dec 4. The company will also stop adding new Go apps into the store post Dec 18.
The social media giant now plans to focus more on its 6DOF devices- Oculus Quest and Rift headsets. Notably, 6DOF headsets can track orientation and position.
Markedly, the $399 priced Oculus Quest headset, which Facebook launched last year, has gained significant traction thanks to amazing games like Beat Saber, Dance Central and The Climb. Notably, higher sales of Oculus products drove Payments and other fees, which surged 80% year over year to $297 million in first-quarter 2020.
Facebook has also been rumored to develop a lighter and more powerful version of the Oculus Quest headset, which is likely to be released late this year.
Acquisitions Strengthen Facebook’s AR/VR Portfolio
Meanwhile, acquisitions have played an important role in deciding Facebook’s growth trajectory in the VR as well as Augmented Reality (AR) space.
Last year, the company acquired Beat Games, developer of popular VR rhythm game Beat Saber. Earlier this year, it bought VR studio Sanzaru Games, developer of Asgard’s Wrath. Continuing its acquisition spree, Facebook recently announced the buyout of Ready at Dawn Studios, developer of the Lone Echo games.
These acquisitions help Facebook to build a solid immersive game content portfolio. This not only boosts sales of its Oculus headsets, but also provides it a competitive edge against console makers like Sony (SNE - Free Report) , Nintendo and Microsoft (MSFT - Free Report) , and tech companies like Alphabet (GOOGL - Free Report) division Google, Samsung, HTC, Lenovo and others.
Moreover, Facebook is working on an all-day AR wearable as its long-term vision, expected for release between 2023 and 2025.
The Zacks Rank #3 (Hold) company also acquired computer vision startup Scape Technologies in a move to build out its AR capabilities. Scape has reportedly built a localization engine that’s designed for city-scale AR. Using a cloud-based Visual Engine, the technology can build and reference 3D maps in the cloud, allowing devices to tap into a unified perception of the world around them. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Per a recent IDC report, global spending on AR/VR is expected to be $18.8 billion in 2020, up 78.5% from IDC’s 2019 estimated figure of $10.5 billion. Moreover, global spending on AR/VR products and services is expected to witness a CAGR of 77% for the 2019-2023 time-frame.
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