Strap in for Sony's $600 VR launch

Happy Wednesday, a.k.a. update day.

Leave it to Sony to upend my plans for this week's newsletter. This morning, the company announced that PlayStation VR 2 will be released on February 22, 2023 at $549.99. That's about $600 after tax (and closer to that as-is with other regions' prices converted to USD). Sony will also sell a bundle with Horizon: Call of the Mountain right at $599.99, which will likely be the cheapest way to get the headset with a big-budget Sony VR exclusive at launch.

I woke up this morning planning to write about how Sony had the only really interesting earnings week besides you know who, given what a few new data points could mean for PS VR2: the company has now shipped over 25 million PlayStation 5 consoles, with sales staying steady year over year. That's your potential base of PS VR 2 buyers growing, though shrinking numbers for PlayStation Plus–a service that could be tooled to be quite attractive for VR buyers if only it would emphasize that content–suggested that Sony might not be able to be as competitive on price for its new headset without the assumption of a subscription subsidy.

Instead, here we are: PS VR 2 will cost more than the console required for its use, putting the bill for a full setup at around $1,000.

We could talk all day about how that might be a fair price for the quality of the hardware and for the overall experience it'll get you (don't forget everything else the PS5 itself offers). Once you're crossing over into four figures, though, the scale is tilted in favor of comparisons with PC VR headsets and high-end standalones instead of with console-priced headsets like Quest 2.

Today's new game announcements also struggle to support the case for PS VR 2 at this price. Smilegate's Crossfire: Sierra Squad looks like a loud and visually lush title sure to entice players who hunger for VR FPS games, and it seems to be the closest of the new bunch to rivaling Sony's presumptive system-seller Call of the Mountain. On the other end of the spectrum, Supermassive's The Dark Pictures: Switchback VR is literally an on-rails shooter. The presence of popular, established titles like Pistol Whip, After the Fall and Zenith: The Last City in the lineup is welcome (as are some free upgrade promises for those who bought PS VR versions), but my guess is that Sony opted against staging a buzzy VR State of Play presentation today because the list was so heavy with them. It would've ended up being a mostly familiar parade of trailers building up to a whopper of a price reveal.

Barring any surprises between now and February–and why announce the price now if this isn't the best opening pitch it has?–Sony has set itself up for an uphill battle with the PS VR 2. Even if early reviews herald its arrival as the best thing in home VR entertainment, the price is too high to be treated like an asterisk or framed as a sound consumer investment when we just don't know what the long term support will look like.

I think it's still safe to say that this will be an exciting product for those who are already into VR. At this price, however, you can bet on most consumers waiting a good, long while to open their wallets again for the PS VR 2 after they manage to get their PS5 first.

Now about Meta…

A year ago, I asked Mark Zuckerberg whether he had ever thought about spinning out Reality Labs as its own company. He told me that it wasn't an idea he had considered "very seriously" up to that point. Later that week, he announced Facebook's rebranding as Meta.

The kinds of experiences Reality Labs is building, Zuckerberg added, were ones he believes "are going to make a lot of sense in Facebook and Instagram and on video-chat calls and Messenger or WhatsApp.” To him, he said, it felt like "you really wouldn't want to separate those pieces."

One year and a $700 billion drop later, it seems like many shareholders may disagree.

Have some onlookers been too quick to start measuring Meta's immersive tech goals for a coffin? Sure. At the same time, it's plainly not good that Reality Labs revenue was way down this quarter. This time around, Meta can't even point to strong Quest 2 sales (turns out that price bump did hurt) as Wall Street frets over declining ad revenue. We don't need to rehash them here, but all the recent stories exposing the state of Horizon Worlds–which is synonymous with the metaverse for many, even if Meta doesn't want it to be–also can't be ignored. It may be easy for people who work in immersive tech or who regularly engage with these mediums to cut Meta some slack on early products, but there's just no sugarcoating this situation.

Of course, the worst of this mess doesn't really have to do with the millions of headsets out there or the few hundred thousand people hanging around Horizon Worlds. Meta is trying to reinvent Facebook and Instagram, an effort to keep its apps that reach billions of people and which bring in tens of billions of ad dollars relevant for the road ahead.

If you're reading this newsletter, there's a good chance you may think $10 billion a year is a reasonable amount to spend on accelerating the metaverse and immersive tech, or maybe even that it isn't enough. But Meta is also spending tens of billions on what it hopes will improve Reels, Feed and ads. Ask yourself what's really harder: making a better headset or immersive social platform, or fixing ailing products as big as Facebook and Instagram?

Consider this plausible future Ed Zitron sketched out for Facebook and Instagram in his newsletter last week:

How do you increase active users yet decrease revenue? Very easily: by turning your previously-beloved social networks into social engineering traps. Meta has successfully taken two products that people liked (and the only two products that made them any real money) and, in their desperation, tried to wring more money out of them by annoying their users into submission. The obvious problem is the one they’re currently facing, which is that the only way to make more money is to make the products significantly worse, pissing off users old and new, which will, in turn, mean advertisers reach fewer people, which will make Meta more desperate, which will mean the algorithm will continue to pump irrelevant crap into your feed. This will, eventually, mean that many people will stop using these platforms entirely.

Now it's possible that this discovery engine gambit will pay off, or that TikTok will be dealt some kind of regulatory blow that tilts things in Meta's favor. But however the next few years play out, it's clear now that a major and probably costly change needs to come about for Facebook and Instagram if Zuckerberg wants to keep investing in immersive tech at this pace–steady growth to big metaverse bucks in the 2030s likely won't calm shareholder nerves. A ramp up to Quest 3's launch next year practically guarantees there's not much Zuckerberg would or can reasonably do to push down Reality Labs spending in the near-term while keeping the consumer product road map on track.

This all brings me back to what I asked Zuckerberg last year. As he answered, I wondered how he could trust that Meta's core apps would remain a solid foundation to build toward the metaverse on top of instead of becoming an albatross around his neck. I'm still wondering.

Rec Room bids under 13s farewell on Quest

On Tuesday, the makers of Rec Room announced that its platform (and "apps like it") are now being required by Meta to block users under age 13 or be taken off the Quest app store. In Rec Room's case, that means removing access via Meta products for its "Junior" accounts made for users age 12 and younger.

Given that Meta's policies state that users must be at least 13 years old to register the account needed just to activate their headset, this outcome isn't surprising. Rec Room having to close off access to its style of account that would ostensibly only be used in-headset if put in the hands of a kid too young for their own Meta account just makes sense.

Rec Room is quite popular with kids, though it now has far more users outside of VR. The effect this change will have on Rec Room's proportion of VR users (a population that peaked at 3 million monthly active in the past year) is unclear, though we do know that most people using Rec Room in VR access it on Quest 2.

Will this shift actually lead to a tangible change in the makeup of VR social platforms? That's really hard to say–even though Meta's own Horizon Worlds is currently restricted to users 18 and older, there's no shortage of kids slipping through. Rec Room achieved COPPA compliance with its severely limited Junior accounts, barring text and voice communications. At least with that in place, a parent willing to let breaking Meta's rules slide while setting up a Junior account would know their child had some guardrails in place. We know kids will lie about their age or use devices they don't have permission to, and we know that only putting in safety tools designed for adults is inadequate in the face of that truth.

Some Virtual Vector updates

If you've been following the Virtual Vector Twitter account, then you already know that the bonus issue featuring a Q&A between myself and Quinn Myers about his book on Google Glass is coming this Friday. Supporters who have signed up at the Voyager level will also receive my Vector Media Club review of Quinn's book soon.

But wait, it's November already–that means it's time to talk about what the next Vector Media Club selection will be. I'm excited to say that this month's pick is We Met in Virtual Reality, director Joe Hunting's feature-length documentary examining the dynamics of romance and sexuality in VRChat. If there's interest, I'd love to set up a live watchalong for all Virtual Vector readers (free or paid) later this month. Shoot me a DM or send an email if you'd like that.

For December, rather than choose it myself, I'm going to let a Voyager member pick that month's Vector Media Club selection. Start thinking of what you'd like to see covered now, because I'll be soliciting suggestions formally in a few weeks!

More news:

• Zuckerberg will give testimony in the FTC's case aimed at blocking Meta's acquisition of Supernatural makers Within. [Ismail Shakil / Reuters]
• Snap is challenging Meta's discovery requests in said case, arguing that they're "enormous and inappropriate." [Christina Tabacco / LawStreet]
• In their fight over Nuvia chip designs, Qualcomm has alleged that Arm is threatening to end its licensing business model, "threatening the development of new and innovative products as a negotiating tactic." [Dylan Patel / SemiAnalysis]
• VRChat launched experimental support for hand tracking on the Quest 2 and Quest Pro. Other new changes and additions can be found in October's developer update.
• Here's a data point for you: Reality Labs now employs around 15,000 people, or about five times as many employees as Apple has working on its upcoming headset. [Sylvia Varnham O'Regan / The Information]
• Sony-owned London Studio confirmed that its next game won't be for PS VR 2 in a blog post. The team's most recent game, Blood & Truth, was released for PS VR in 2019.
• Epic is investigating a contractor accused of black market item sales and manipulation of Fortnite Creative's discovery system. [Jeffery Rousseau / GamesIndustry.biz]
• Immersive Wire editor Tom Ffiske released an audiobook version of his book The Metaverse: A Professional Guide.
• Designer Yoon Park published a Figma toolkit for Microsoft Mixed Reality Toolkit 3.
• Enterprise-focused AR and computer vision startup Resonai extended its Series A round to a total of $30 million. [Sri Krishna / VentureBeat]
• Sports game developer ForeVR raised $10 million in a Series A round led by Lobby Capital. [Scott Hayden / Road to VR]
• The volumetric video startup once known as Tetavi has rebranded as Yoom. It also announced a new $15 million funding round. [Press release]
• Headset maker Pimax announced that its new Crystal VR headset will be priced at $1,599. The reveal video notably showed a render of an Nvidia RTX card plugged into an Arduino instead of a motherboard, so, y'know–maybe wait for reviews of the Crystal to verify whether the attention to detail is up to par with real hardware.