The company, formerly known as Facebook, will spend $10 billion this year on research and development of virtual reality and augmented reality technologies, including computerized glasses or headphones.
On Monday, Meta CEO Mark Zuckerberg showed how far the social media company has progressed toward that goal by revealing several unfinished prototypes of the headphones the company has built in its labs.
Zuckerberg bet the future of the social networking company he founded on virtual reality, which immerses users in a computer-generated world, and augmented reality, which superimposes computer-generated objects onto the real world. Last year, the company changed its name to Meta to highlight the company’s new focus on the metaverse, a virtual world where Zuckerberg imagines people will spend increasing amounts of time — ideally, through advanced computerized glasses.
If Zuckerberg succeeds in making obsolete computers mainstream, Meta will get a new stream of revenue from hardware sales, and control its hardware platform, making it less vulnerable to changes in the platform than other companies. For example, on its latest earnings call, Meta said Apple’s recent privacy changes to the iPhone could cost it $10 billion in lost revenue this year, as it hampers the company’s ability to target ads to a specific audience.
The virtual reality market is currently small and there are questions about how big it can reach. Headphone sales are currently dominated by Meta, with the current $299 Quest 2 accounting for 78% of all headphone sales in 2021, according to an estimate from IDC. But only 11.2 million headphones were sold during the year – far fewer than smartphones or computers.
Meanwhile, investors are skeptical about Meta’s pivot away from its core ad and app business. The stock is down more than 53% so far in 2022 on concerns about rising expenses, expectations of lighter growth, increased competition from TikTok, and influences from Apple’s iPhone privacy change that has hobbled mobile advertising.
Monday’s rally did little to allay those fears — Meta stock closed more than 4% lower on Tuesday, despite a broader rally in tech stocks. (US markets were closed on Monday for the June holiday.)
What did Zuckerberg show?
Zuckerberg said during his presentation that Meta is developing next-generation virtual reality screens designed to provide a realistic experience enough for users to feel as if they are in the same room with other virtual people. Existing screens have low resolution, screen distortion, and cannot be worn for long periods of time.
“It won’t be long before we can honestly create scenes,” Zuckerberg said on a call with the media about the company’s virtual reality efforts. “Just instead of looking at them on the screen, you’ll feel like you’re there.”
“The problem today is that the vividness of the screens that we now compare to what your eye sees in the physical world has stopped being an order of magnitude or more,” Zuckerberg said.
Over the past few years, Meta has regularly demonstrated its progress in working on VR headsets and augmented reality goggles for partners and the press, to encourage investors to consider the project worthwhile, and to help hire highly-paid developers and CEOs with experience in VR and AR.
At these roundtable shows, Meta regularly shows incomplete prototypes for research use, which is unusual in consumer electronics. Gadget companies like to complete products and learn how to make them before talking about them with the press. For example, Apple, which is working on its own headphones, never shows prototypes.
“These prototypes, these are custom, bespoke models that we’ve built in our lab, so they’re not ready-to-ship products,” Zuckerberg said.
Here are the prototypes he displayed:
Butterscotch. Butterscotch was designed to test high-resolution monitors that have pixels small enough that the human eye cannot distinguish between them. Butterscotch has a new Meta lens developed that limits the headset’s field of view, making it possible to deliver fine text and display more realism.
However, Meta says the prototype “wasn’t even close to charging” due to its heft and bulk — plus the prototype still had exposed circuit boards.
half dome 3. Meta has been working on Half Dome headphones since at least 2017 in order to test a type of rendering that could change how far away the focus point of a headset’s optics is. Meta says that with Half Dome technology, resolution and image quality can improve enough for users to create giant computer screens inside a headset to work on. The latest version, 3, replaces mechanical parts with liquid crystal lenses.
Holocake 2. Meta says that this is the thinnest and lightest VR headset they have made and that it is fully capable of running any VR software if connected to a computer. However, they require specialized lasers that are expensive for consumer use and require additional safety precautions.
“On most VR headsets, the lenses are quite thick and need to be placed a few inches from the screen so that you can focus properly and direct the light directly into your eyes,” Zuckerberg said. In Holocake 2, the Meta uses a flat 3D lens to reduce volume (plus a laser).
starburst Starburst is a research prototype focused on high dynamic range monitors that are brighter and display a wider range of colors. Meta says HDR is the only technology most associated with added realism and depth.
“The goal of all of this work is to identify technology paths that will allow us to improve purposefully in ways that begin to get closer to the visual realism we need,” Zuckerberg said.
Mirror Lake. Meta also showed off a concept design called Mirror Lake for a headset in the style of ski goggles. Mirror Lake is designed to combine all of the different Meta headphone technologies it develops into a single, next-generation display.
“The Mirror Lake concept is promising, but for now it’s just a concept without a fully functional headset yet to conclusively prove the architecture,” said Michael Abrash, chief scientist at Meta Reality Labs. “But if it succeeds, it will be a game changer in the visual experience of virtual reality.”