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Facebook Inc Announces $199 Oculus Go to Take VR Mainstream

Brad Moon

Facebook, Inc. (NASDAQ:FB) held its Oculus Connect 4 event yesterday, where the company announced the Oculus Go. The new virtual reality headset is wireless, standalone, priced at $199 and aimed at taking VR mainstream.

Facebook Inc Announces $199 Oculus Go for Mainstream Adoption

Source: Oculus

Oculus Go is key to Facebook’s target of getting one billion people actively using VR, a goal that would be a win for FB stock — and finally justify the $2 billion Facebook spent to acquire Oculus.

Facebook Announces Oculus Go

At yesterday’s Oculus Connect 4 event, Facebook took the wraps off the Oculus Go VR headset. This is a fully standalone product. No wires, and no PC or smartphone needed to operate. The lightweight headset has its own high resolution (2560 x 1440 pixels), fast-switch LCD display, built-in speakers with spatial audio and a headphone jack.

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It uses a controller that’s similar to Samsung Electronics Co Ltd’s (OTCMKTS:SSNLF) Gear VR to make it easy for developers to release apps for both devices –although the Gear VR requires a smartphone…

Facebook says it’s “hands-down the easiest way to get into VR.

Oculus Go Aimed at Taking Virtual Reality Mainstream

Since it bought Oculus VR in 2014, FB stock hasn’t seen many positives from the acquisition. If anything, Oculus has been a drag on the company.

Facebook has had to slash Oculus Rift pricing in an attempt to boost disappointing sales, one of the Oculus co-founders quit and Facebook had to pay out $500 million to settle a lawsuit filed against Oculus by a VR game development company.

The Oculus Rift was priced at $599, with controllers adding another $200 to the mix. Add in the high powered PC needed for the virtual reality headset –and the wires– and the market was limited largely to hardcore gamers.

According to IDC, Facebook sold 246,700 Oculus Rift headsets in Q2 (after an initial price cut to $499), less than half the volume of Samsung or of Sony Corp (ADR)’s (NYSE:SNE) PlayStation VR.

The Oculus Rift was dropped to $399 with a controller included this summer –a “temporary” price cut that has since become permanent– but that hasn’t been enough to goose sales to the point that VR is material to FB stock.

Adding to the problem in boosting virtual reality adoption, Apple Inc. (NASDAQ:AAPL) is pushing hard into augmented reality. With ARKit in iOS 11, it’s bringing augmented reality to the masses with no headset required.

A similar feature is also rolling out to Android smartphones. There’s a risk that the public will become so enamored with AR, that VR gets pushed to the side.

In an attempt to turn around its virtual reality bet, Facebook took a page from Samsung’s book and released the Oculus Go. If FB is going to hit its goal of having one billion VR users, it’s not going to do so with the Oculus Rift. The Oculus Go addresses the primary pain points of the company’s flagship VR headset. It’s lightweight, has no wires tethering it to anything, requires no PC or even a smartphone –it’s truly standalone. And it’s priced at $199, a new level of affordability.

What Facebook gives up in going the standalone route is access to the existing Oculus Rift VR library. The company says it will be able to run apps designed for Samsung’s Gear VR, and refers to the Oculus “mobile VR content library.”

Project Santa Cruz

Also mentioned at yesterday’s event was Project Santa Cruz. This advanced VR headset is still in development, but the details shared by Facebook show a headset that combines elements of the Oculus Rift and the new Oculus Go. It has the power of the Rift with PC-quality VR and two positionally tracked controllers, but the headset is standalone like the Go.

Project Santa Cruz is still in the future, though. Developers will be able to get their hands on one in 2018, but there’s no release date at this point.

The Oculus Go will be available for purchase in early 2018. We’ll find out then if the standalone approach and $199 price tag will be enough to tempt consumers into adopting VR en masse. If not, the reality of VR will be a continued drag on FB stock.

As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.

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