Facebook expects to keep spending heavily on VR and AR in 2019.
During its Q3 2018 earnings call earlier this week the company announced that it expects a 40 – 50% increase in spending in 2019 compared to 2018, taking full-year capital expenditure to around $18 billion to $20 billion. CEO Mark Zuckerberg rounded off his opening notes by stating that the company was “heavily investing in AR and VR”, making specific mention of next year’s launch of the Oculus Quest all-in-one VR headset.
Chief Financial Officer Dave Wehner later explained that the company expects to total $14 billion to $14.5 billion in capital expenditure in 2018. “As Mark said, we continue to invest aggressively across the business, and expect that full-year 2019 total expenses will grow 40 – 50% compared to full-year 2018,” he said, putting full-year capital expenditures at “$18 to $20 billion.”
When later asked if this spending would be in the same areas that the company has previously said it will be investing in, Wehner replied: “A lot of that is consistent with what we’ve been talking about as our big investment areas.” He specifically noted that investment in VR and AR was one such area as well as other factors like increased headcount and investment in safety and security technologies.
Obviously Facebook isn’t going to be spending $20 billion on VR and AR next year but with news that the company’s immersive R&D division, Reality Lab, is getting a big new site at the Redmond campus, coupled with the work Michael Abrash showcased at OC5 this year, it’s clear that it’s not going to slow down its spending any time soon. The big question is if Oculus Quest, which launches in spring 2019 for $399, will mark the start of Facebook recouping some of those investments.