Facebook Moves Beyond Oculus Branding and Suggests a More Robust Mixed Reality Future

In an unsurprising move, Facebook is moving farther away from its Oculus VR branding, integrating Augmented Reality and Virtual Reality (AR/VR) efforts into a singular Facebook Reality Labs branch of operations that will house Oculus, Spark AR Studio, and Portal (smart camera/display). Oculus will remain the hardware branding for now, while its Oculus Connect VR developer event will rebrand to Facebook Connect. No notable product changes have been announced as of yet.

From a branding perspective, this better positions Facebook in the AR space, while theoretically maintaining its Oculus brand strength and market share in VR, with greater potential for the overlap and integration of these elements throughout the Facebook portfolio.

This makes for yet another major player strengthening its position in the AR/VR space; Google, Apple, and Amazon are all heavily involved in AR and VR in different ways. Revenue flow and ubiquitous knowledge of product may not be there yet, but this move and others position Facebook favorably not only in VR but also in AR, and crucially this remains true for hardware, software, and services. Facebook, Instagram, and WhatsApp present a gigantic user base for AR content and experiences to be pushed to mobile devices, with this content potentially tying to VR opportunities going forward as well.

This cross-platform and cross-portfolio potential is perhaps the most powerful opportunity with reorganization efforts like this; more streamlined collaboration and engagement across Facebook offerings keeps the Total Addressable Market (TAM) broad and opportunity strong. See Apple’s efforts with ARKit, its recent acquisitions of Spaces and NextVR, and its ongoing focus on growing services revenue as a good example. Facilitating and encouraging content creation, distribution, and access across products is beneficial to all involved—there is a valid concern around closed platforms limiting access in a market desperate for traction (again, Apple serves as good example), but time will tell what integrations and partnerships look like going forward.

It’s worth noting that this move was met with some disappointment among Oculus users as well, after the company announced it would be phasing out Oculus accounts and instead require Facebook accounts for Oculus products. This seems to continue a trend of greater Facebook Intellectual Property (IP) integration and reliance on Oculus, after promises of the opposite when Oculus was first acquired. While the impact this may have is unclear, it does potentially weaken brand loyalty in the VR space, especially on the Personal Computer (PC), where Oculus has had strong market share fighting primarily against HTC and the Vive portfolio.

Facebook’s AR activity may not be explicitly seen by most, but integrations and investment continue for the company. The impact of this activity of course will be most prominent in the consumer space, but enterprise will also see an impact. Just as products like the Oculus Quest are technically consumer products, the enterprise demand is significant and overlap in value between the markets is unmistakable; price, ease of use, and comfort are paramount for any user. Watch for how Oculus enterprise endeavors shift after this move, if they do at all. Any added difficulty in integrating Oculus VR for an enterprise will be a churn point. At the same time, if integration is made simpler with the reorganization, then business could expand. Tying Facebook, Instagram, or WhatsApp into VR efforts in education, retail, and tourism are ripe opportunities

Spark also presents an interesting content creation opportunity for the company. Currently an AR creation platform, more cross platform positioning—and again that all important service and portfolio integration—could make it a prime content solution. Content remains a sticking point for the AR and VR market, and so more tools with valuable integrations and large addressable audiences are welcome.

This rebrand accomplishes a few things, but most simply it creates a more direct path for Facebook to be more than Oculus in VR, more than Facebook and Instagram in Social Media, and more than Spark in AR. How this manifests exactly is yet to be seen, but this is becoming a common trend for the heavy tech hitters of today. Launching dedicated AR or VR hardware to an unsure audience with unsure content backing can be successful, but it’s far from a guarantee. Preparing the market with content creation tools, integration opportunities, and glimpses into AR/VR potential—all while hiring, acquiring, researching, and developing mostly behind the scenes—will create a more powerful overall portfolio once it all coalesces.