Mark Zuckerberg “Happy” With Oculus Preorders But VR May Not Impact Facebook in 2016
Facebook CEO Mark Zuckerberg said during the company’s earnings call this week he is “happy” with the way Oculus preorders are going. However, Rift sales and the supply of parts needed to make them aren’t expected to have a significant impact on the company’s financials in 2016.
“It’s not going to be material to our financials this year,” Facebook Chief Financial Officer Dave Wehner said during the call.
The comments underscore the gray area the Rift occupies for Facebook, with preorders going well — “Wow, people really want Rifts. There must be a lot of lurkers in the VR community,” Oculus co-founder Palmer Luckey wrote earlier this month — but sales aren’t going well enough it might augment the income from the company’s main business selling ads targeted by information from people’s personal profiles.
“YES I am happy. I don’t show much joy,” Zuckerberg said on the call before making himself laugh. “But I’m happy.”
New Rift pre-orders are expected to ship in July, several months after the first devices arrive at the end of March. The device was offered for pre-sale at $599 on Jan. 6 but the site instantly crashed and orders were quickly pushed out into the following months. A computer costing around $1,000 is needed to drive the Rift and the cost of the device itself left some in the enthusiast community shocked, forcing Luckey to apologize for not properly communicating expectations on the price. All of this is to say demand and sales for the Rift are a huge unknown and it’s likely to continue to be that way until enough headsets (or software) are sold that it impacts Facebook’s bottom line.
Facebook saw $17.93 billion in revenue for 2015 with net income of $3.69 billion. Oculus hasn’t even charged credit credits yet and won’t until the device ships. Even then, it will take a lot of Rifts to impact that bottom line. A recent report by Goldman Sachs estimated nearly 6 million wired VR headsets could sell this year on its way to becoming a $182 million market by 2025. However, that report assumed HTC Vive and PlayStations VR headsets would ship in larger volumes than Rift.