Meta’s new VR headset will cost $1,500 as Zuckerberg sets up battle with Apple

Meta Platforms Inc. introduced a new virtual-reality headset with a price tag more than three times the price of its predecessor, as Chief Executive Mark Zuckerberg prepares for a likely donnybrook with nemesis Apple Inc.

On Tuesday, Facebook’s parent company META,
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unfurled the $1,499 Quest Pro, its new high-end virtual-reality headset for professional use. The last version of Meta’s VR hardware, the Meta Quest 2, cost as little as $300 just a few months ago, before Meta raised the price by $100 in the run-up to Tuesday’s announcement.

Quest Pro can be pre-ordered. It ships Oct. 25.

“This one is for you, the believers, the people who would rather be early than fashionably late,” Meta Chief Executive Mark Zuckerberg said as he strolled around campus during a video presentation for the Meta Connect developer conference.

“Virtual reality isn’t some obscure hobby anymore,” said Zuckerberg, who is so convinced the metaverse is the future, he renamed the company he co-founded last year.

Facebook acquired virtual-reality specialist Oculus in 2014 for $2 billion, and has been trying to push VR into the mainstream ever since. Zuckerberg detailed new apps and partnerships, including ones with Microsoft Corp. MSFT,
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Accenture ACN,
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Adobe Inc. ADBE,
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Autodesk Inc.ADSK,
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Zoom Video Communications Inc. ZM,
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and Comcast Corp.’s CMCSA,
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NBCUniversal, while detailing growth in sales of VR software: Meta announced Tuesday that the Quest Store has racked up $1.5 billion in revenue to date, that one-third of the 400 titles in the store have grossed more than $1 million each, and 33 have grossed more than $10 million apiece.

“This is a game changer for scaling the metaverse” in businesses, said Accenture CEO Julie Sweet, boasting a virtual campus of 150,000 for working and training.

The product blitz is the first punch in what is expected to be an escalating heavyweight battle between Meta and Apple AAPL,
+0.59%
for the next generation of AR/VR technology and supremacy of the metaverse. More significantly, the Meta-Apple bout will test whether the metaverse — a digital experience that blends a hodgepodge of virtual reality, streaming video, mobile games like Roblox Corp. RBLX,
+3.76%
and Epic Games Inc.’s “Fortnite,” cryptocurrencies, social media, 5G, artificial intelligence and email — will find a broad acceptance. [Some 57% of U.S. adults online are unfamiliar with the metaverse, according to Forrester Research.]

“Meta did a very good job of cohesively telling a story that legitimizes their view of VR for productivity and justifying the {$1,500]price,” Anshel Sag, a principal analyst at Moor Insights & Strategy, told MarketWatch following the event. “The Microsoft partnership is so important. Meta managed expectations in explaining that this will be a journey in which they have been joined by important business partners.”

In depth: Why is ‘metaverse’ the hottest tech buzzword? Apple has something to do with it

Brian Trunzo, metaverse lead at Polygon Studios, also defended the $1,500 price tag as “somewhat reasonably affordable.”

“Hardware is expensive, and through clever financing, we often forget that our mobile phones and tablets regularly cross the $1,000 line,” Trunzo added.

“[Meta’s] pivot full-on into the metaverse was an understanding of where the XR Space ecosystem is headed, and they have been in this space for a while,” Cathy Hackl, chief metaverse officer and founder at Journey, told MarketWatch. “To me, competition just makes the market stronger. There is a race to replace the cellphone, and Meta, Apple and Microsoft MSFT,
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are all-in on this.”

In the year since Zuckerberg issued the jarring edict to make a hard pivot to the metaverse, Meta has spent billions of dollars and designated thousands of employees to make his utopian dream a reality. But the strategy — many would argue gamble — has been problematic, resulting in widespread confusion and frustration among Meta’s ranks, according to published reports in the New York Times and elsewhere.

Metaverse vs. Reality OS: Listen to a discussion about the coming battle between Facebook and Apple for VR/AR supremacy

In a June meeting, Zuckerberg warned “there are probably a bunch of people at the company who shouldn’t be here,” and that he plans on “turning up the heat” on expectations, according to a Reuters report.

On Tuesday, Zuckerberg said he fervently believed the metaverse can be the most social technology ever, and that could translate into a “massive” business opportunity. He also took a not-so-subtle jab at Apple by repeatedly advocating an open, interoperable metaverse as an alternative to walled gardens run by the likes of Apple.

Should Meta establish and legitimize the mixed-reality market with Tuesday’s glitzy presentation, Apple will soon come swooping in. That is Apple’s modus operandi: Let rivals legitimize markets, and then charge in and dominate it in short order with products of its own tied closely to the Apple ecosystem. (See iPhone, Apple Watch, the App Store and Apple TV+ as examples.)

Apple has teased its AR plans for years, but made no mention of mixed-reality at its iPhone launch on Sept. 7. It is expected to announce a headset over the next few months for release in 2023.

For more: Apple CEO Tim Cook predicts AR will have ‘profound’ impact, metaverse downplays

A collision between the tech titans over mixed-media supremacy seemed preordained. Meta and Apple have polar opposite business models that have fueled business and philosophical conflicts over data collection and privacy. Facebook will collect as much of your data as possible and share it with third parties such as advertisers to monetize and feed a $120 billion business in annual sales.

Apple, which is fiercely pro-privacy, gleans a majority of its revenue through iPhone sales and peripherals, the App Store, and other products and service. Last year, it rolled out the App Tracking Transparency/iOS privacy roadblock to inhibit the ability of Facebook and others to track and monetize consumers. (Former Meta Chief Financial Officer David Wehner admitted ATT wiped out at least $10 billion in Meta ad sales).

The impact of ATT, as well as Meta’s overreliance on advertising amid stiffening competition from TikTok, prompted Zuckerberg to consider fresh revenue streams such as the metaverse. Yet it is a path strewn with obstacles, including a familiar nemesis from Cupertino, Calif.

Shares of Meta slide 4% in trading Tuesday.

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