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[LakeOf9]

During Wednesday's Meta Connect keynote presentation, the company announced a new milestone for its line of standalone Quest headsets: $2 billion in lifetime revenue from Quest apps and software since the platform launched back in 2019. On first glance, that's a pretty big number that suggests the formation of a pretty healthy VR software ecosystem.

But looked at in context, Ars' analysis suggests the Quest software market is roughly the same size as that for the Wii U at a similar point in its short life cycle. That's not a great comparison for Meta to be facing, since the Wii U was rightly considered an embarrassing flop by the standards of the video game market.

Even accounting for those adjustments, though, the software markets for the Wii U and Quest (at similar points in their life cycles) would seem to be in similar neighborhoods. The Wii U's sales of nearly 99 million software units in its first 1,594 days on the market is just behind the roughly 100 to 114 million pieces of Quest software Meta has sold in 1,559 days, according to Ars' estimates.

To be fair to the Quest, software sales for the headset have shown a distinct upward trajectory since the launch of the Quest 2 in October 2020. If you disregard the 16 months of Quest 1 software sales that preceded the Quest 2 launch, the headset has been selling software at a significantly faster rate than the Wii U. Meta also deserves credit for building the Quest's software library from what was essentially a standing start into a robust storefront with over 500 apps. Comparing a new VR platform to a Nintendo console that could lean on ultra-popular first-party franchises developed over decades isn't completely fair to the newcomer.

At the same time, many of the Wii U's most popular first-party games consistently sold for $59.99, with exceedingly rare official discounts. That means Nintendo's console likely generated much more overall software revenue than the cheaper software on the Quest. The Wii U was also selling its software to just 13.57 million Wii U owners (as of March 2017), compared to reports of over 20 million Quest headset sales so far. This suggests that the average Quest owner is spending a lot less on software than the average Wii U owner did.

But Quest's overall revenues will have to get a lot healthier to justify the massive investment Meta has made in the hardware line. The company's Reality Labs division has lost $21 billion since the beginning of 2022, over and beyond the $2 billion it spent on the company then known as Oculus in 2014. Quest software and hardware would have to start selling orders of magnitude better than the Wii U to make up for that kind of continuing investment in the technology.

Back in the late 2010s, you could argue that VR headsets were an immature and risky new concept that might take a while to catch on with the masses. Now, in late 2023, the market has had enough time to reach something approaching its full potential. That this potential currently seems to mirror one of the worst-received game consoles of the modern era should be deeply concerning to Meta and those with high hopes for virtual reality in general.

SOURCE

Kind of a shame VR is doing so badly across the board. I wonder if Quest 3 or Apple's set can change things.

 

[EviLore]

Strange slant. The Wii U was an off generation but it was still Nintendo's flagship console. Over 100 million software sales for a VR headset is not a flop by any stretch of the imagination.

 

[ShadyAcshuns]

What are the numbers for similar VR products? It should probably be compared to those instead.

 

[drezz]

I loved the Wii u.
Had some great gameplay in "Nintendoland" that showcased how the tablet could be used With players on the TV.
The Mario vs Toad maze thing was great!
Mario on the Tablet running and trying too hide while the clock counts down and 4 other players(Toads) having too try too find you before timer runs out.
The selfie camera on the tablet showing your goofy ass smiling face as the Toads where looking for you and shouting out call signs on where they THINK you are.. and you giving it away with a dumb ass Smirk LIVE on the TV for them too see...
Such good couch game FUN!

 

[Buggy Loop]

The hell is this comparison?

How the fuck do you make 100 million software sales on VR look bad when its a newcomer that just had affordable headsets with Quest 2?

How did this "journalist" dig out Wii U's grave to make an orange to apple comparison?

 

[EviLore]

Paging bender

 

[Kilau]

Different markets, different size markets but let’s compare them anyway for the click headline.

 

[Sakura]

Seems like a weird take.
The Wii U had a pretty good attach rate.
Considering the install base of the Quest, and that probably a lot of people like myself use it for PCVR, I think those are good numbers.

 

[bender]

Paging bender

 

[Sleepwalker]

Those sales are actually pretty impressive, theres near 0 piracy protection on quest. People sideload pirated games and play online all the time.

 

[DeepEnigma]

 

[faraany3k]

Lol comparison.

 

[TransTrender]

Quest sales are trending in a better direction than the WiiU

 

[fart town usa]

VR is fantastic. I wish more people could try it out. One of those things that really grows on you the more you use it.

 

[ManaByte]

The Wii U only sold 13M units WW.

 

[tamago84]

Good ol ars technica

 

[Cyberpunkd]

Different markets, different size markets but let’s compare them anyway for the click headline.

Engagement is their oxygen, wouldn’t you say?

 

[baphomet]

Why are they comparing it to the Wii U and not the Xbox Series consoles? Both have sold roughly the same amount. Quest likely has the higher attach rate of the two.

 

[Ivory Samoan]

Comparing a VR headset, emerging market device, to a flagship console that underperformed but was still a flagship Nintendo console.

If anything, Meta Quest is winning then?
What a bunk comparison, what are you smoking Ars Technica.

 

[Fredrik]

This is the dumbest article I’ve seen in quite awhile. Very impressive Arstechnica.

 

[Romulus]

The best selling VR headset ever was psvr in 2021, selling 5 million in 5 years.

By 2022, the best VR headset sold 20 million in 2 years.

There's a reason Apple, Valve, Sony, and Meta are all in, the trajectory speaks to actual business powerhouses, not forum dwellers and game "journalists."

 

[Reallink]

Very important distinction to make is that 99% of those games have no marketing whatsoever and aren't just indie games, but are overwhelmingly 1 - 3 man "studios" releasing their first game ever on literally $0 budgets...and they outsold Nintendo's flagship franchises and console. What's more, Q2 is by far the most used headset on Steam, which are software sales not reflected in Facebooks data.

Biggest article and thread backfire of all time?

 

[Robb]

Ars' analysis suggests the Quest software market is roughly the same size as that for the Wii U at a similar point in its short life cycle. That's not a great comparison for Meta to be facing, since the Wii U was rightly considered an embarrassing flop by the standards of the video game market.

Did Quest go from selling 100M/900M units of hardware/software to selling 13M/100M? No? Then it’s not even remotely comparable.

 

[Goalus]

How many units is the Wii U expected to sell during the next five years?
And the Meta Quest?

 

[Chukhopops]

Why are they comparing it to the Wii U and not the Xbox Series consoles? Both have sold roughly the same amount. Quest likely has the higher attach rate of the two.

Uh, no?

Wii U is at 13.5M lifetime.

Series is at minimum 21M and it’s not like the generation is over.

 

[Mowcno]

If it was a massive flop they wouldn't have made 3 of them.

Expectations for a VR headset are not the same as expectations for a Nintendo Console.

This is like saying the Steam Deck is a flop because it sold less than the WiiU.

 

[baphomet]

Uh, no?

Wii U is at 13.5M lifetime.

Series is at minimum 21M and it’s not like the generation is over.

Read again. The Quest 2 and Series consoles have sold roughly the same amount

 

[Kiya's Guard]

Just commenting to say that Arse Technica amused me

 

[crackajack]

Did Quest go from selling 100M/900M units of hardware/software to selling 13M/100M? No? Then it’s not even remotely comparable.

How is it not even remotely comparable? It can be compared to automatic watches, a tea cup manufacturer, E-bikes etc for all I care if the agument is explained.
Of course it appears like apple to oranges even though both are eletronic entertainment products, so not as outlandish as my examples, but the point that is written is that the market bought it with roughly similar numbers as the wii-u. While r&d, the whole endeavor, seemingly costs Meta quite a tremendous amount of money, and the wii-u was just again a duct taped gamecube with a tablet instead of waggle this time around, and Nintendo did not even lose money with it iirc. With Meta at the helm of marketing, which is for many people a red flag so not ideal, but also google as a second huge player did some VR cardboard marketing, and Sony also trying half heartedly to establish the tech, so anyone who wants anything to do with VR should know about it and if interested at all have one already. So while wii-u did not tap the full potential the gaming market generally has, nor what Nintendo prior and after prove to have, VR seems not be growing much even after several years and iterations and promises of it being the second coming, with currently similar sort of still abysmal numbers, or might it even decline like waggle controls, tamagotchi and stuff that was for better or worse just a fad. Sure, new stuff might need some time, but imho VR already had time and its fans praise it endlessly. Apple's entry might be another test, but after Sony, Meta and Google not getting it really off the ground, I have doubts Apple will, even if their customers are usually weird in their value assessments.

 

[Portugeezer]

Different expectations.

 

[CuteFaceJay]

Not gonna lie I hardly hear anyone talking about VR, That must be a lot of closets being utilized to contain all the quest units that have sold.

 

[Chukhopops]

Read again. The Quest 2 and Series consoles have sold roughly the same amount

I misread indeed. But then the comparison makes Quest look even worse from a revenue / install base point of view.

 

[UltimaKilo]

Not gonna lie I hardly hear anyone talking about VR, That must be a lot of closets being utilized to contain all the quest units that have sold.

A product that was way too early to market. I love VR, but it's way too power hungry for portable, and it's limited by comfort and weight, low refresh rates and lack of FOV.

It definately a "wake me up in 5 years" product.

 

[SmokedMeat]

I’d imagine a good chunk of Quest users buy their VR games on Steam, not the Quest/Meta Store.

 

[lyan]

If it was a massive flop they wouldn't have made 3 of them.

Expectations for a VR headset are not the same as expectations for a Nintendo Console.

This is like saying the Steam Deck is a flop because it sold less than the WiiU.

Well, the Company has accumulated 33.7 billion loss since Meta started reporting it....

 

[Ozriel]

What a silly article.
Doesn’t really make sense sticking with that 20 million number when many of the Quest 2 owners upgraded from a Quest 1. The number of active headsets are certainly less than 20m.

Also doesn’t make sense to lump all the losses of that division on the Quest line. The vast majority of those losses come from Zuck’s hellbent pursuit of the Metaverse dream. The Quest portion of the business itself seems to be fairly robust.

 

[Ozriel]

Well, the Company has accumulated 33.7 billion loss since Meta started reporting it....

From the Metaverse pipe dream. That can’t be laid at the foot of the Quest line, and the future of that line shouldn’t be based on the losses from the Metaverse.

 

[Sethbacca]

Like it or not VR is still an up and coming category and players like Apple joining the space legitimizes it. At some point the gear needed to join the fun will be small and cheap enough to achieve mass market appeal and Meta will already be ahead of the curve in software and infrastructure so even if its producing less than stellar numbers now I think it’s a bid for the future and planning for down the road.

A smart play imho.

 

[BlackTron]

I loved the Wii u.
Had some great gameplay in "Nintendoland" that showcased how the tablet could be used With players on the TV.
The Mario vs Toad maze thing was great!
Mario on the Tablet running and trying too hide while the clock counts down and 4 other players(Toads) having too try too find you before timer runs out.
The selfie camera on the tablet showing your goofy ass smiling face as the Toads where looking for you and shouting out call signs on where they THINK you are.. and you giving it away with a dumb ass Smirk LIVE on the TV for them too see...
Such good couch game FUN!

You missed the best one, the Luigi ghost mini-game. I agree Nintendo Land alone makes it impossible for Switch to replace the WiiU. Sadly this doesn't change what a massive and legitimate failure it was.

 

[yurinka]

Engagement is their oxygen, wouldn’t you say?

Companies don't pay taxes, salaries, providers etc with engagement.
Revenue (or having cash/equivalents) is their oxygen.

 

[Robb]

How is it not even remotely comparable? It can be compared to automatic watches, a tea cup manufacturer, E-bikes etc for all I care if the agument is explained.

That’s on you I guess, I’d argue you should care if the opening piece is moronic or not. I won’t be reading past something like that so who cares what the end argument is at that point? You’ve already lost the reader and rendered the remaining text worthless.

Things aren’t static. The WiiU was a humongous flop relative to the Wii. Had the Wii sold 6M units of hardware and 50M units of software the WiiU is suddenly a success story of Nintendo more than doubling their hardware/software sales in the console space.

You can write the exact same thing about the SteamDeck;
But looked at in context, Ars' analysis suggests the SteamDeck hardware market is even lower than that for the Wii U at a similar point in its short life cycle. That's not a great comparison for SteamDeck to be facing, since the Wii U was rightly considered an embarrassing flop by the standards of the video game market.

Gee, not looking good for the SteamDeck with that WiiU comparison.

 

[fart town usa]

Not gonna lie I hardly hear anyone talking about VR, That must be a lot of closets being utilized to contain all the quest units that have sold.

It's tough and definitely an up hill battle, the big outlets rarely cover/review games and when they do it's obvious to VR players that the reviewer in question doesn't play VR much.

Big YouTube channels don't cover it much either. When people talk about exclusives and 2023 being the best year ever in gaming, VR is never mentioned even though the line up is arguably just as exciting as flat gaming.

However, VR enthusiasts are rabid and buy a ton of games. The relationship between developers and players on discord is healthy and communicative.

It kind of sucks because it's honestly a really great platform for gaming and the games keep getting better and better. For me personally, VR is the most exciting thing in gaming right now. Watching small teams really go for it and seeing the progression of some of these teams, it's really exciting to be a part of the niche and watch things play out in real time.

 

[Hudo]

What a shit article. They should compare the performance of Meta Quest 3 with its contemporaries. I.e. other VR headsets. Wii U was only a flop in comparison to other consoles. Comparing a VR headset with a console is like comparing a car with a speed boat or something. Different markets.

 

[Morrie’s wig shop]

Why not just compare it with other VR headset’s? Why?

 

[lyan]

From the Metaverse pipe dream. That can’t be laid at the foot of the Quest line, and the future of that line shouldn’t be based on the losses from the Metaverse.

Keep in mind only 30% of that software revenue goes to them which makes it 600million lifetime revenue, that's about 1 year of salary for 6,000 when we factor in things like insurance and 401k etc (probably costs more than 100k/year in reality for a tech company of such caliber but whatever for simplicity).
Not long after the acquisition before all that meta crap even started Oculus already had about half a thousand men working, the non-metaverse segment probably has reached a thousand for some years now with how aggressive Meta is. If we also consider other expenses I wouldn't be surprised if they contributed to some of those billions (though vast majority will still be the Metaverse stuff) or just breaking even depending on how profitable it is selling each of the Quest device.

 

[SidViscous]

It's still heavily subsidised and they are nowhere near recouping their R&D investment costs.

But think of this way, you can play fun VR games and lose Meta money in the process, it's a win-win for consumers.

 

[Reallink]

Keep in mind only 30% of that software revenue goes to them which makes it 600million lifetime revenue, that's about 1 year of salary for 6,000 when we factor in things like insurance and 401k etc (probably costs more than 100k/year in reality for a tech company of such caliber but whatever for simplicity).
Not long after the acquisition before all that meta crap even started Oculus already had about half a thousand men working, the non-metaverse segment probably has reached a thousand for some years now with how aggressive Meta is. If we also consider other expenses I wouldn't be surprised if they contributed to some of those billions (though vast majority will still be the Metaverse stuff) or just breaking even depending on how profitable it is selling each of the Quest device.

LOL @ 600 million, 6,000 employees and $100k/head, you're not even on the same planet. Facebook's VR/AR branch (Reality Labs) lost $14 billion dollars last year all by itself. The amount of money Zuckercuck has blown employing 10's of thousands of people at comically ridiculous salaries who evidently do next to nothing is astounding. With their head count and expenditure, they should be a clear decade ahead of everyone else, with things like sole manufacturing capability of 4K MicroOLED displays, quantum lenses that bend space time, and a new $100+ million AAA VR game, movie, or app every single week. Yet somehow 10 years and 100+ billion dollars later, they're releasing effectively the same (and often times worse) product than their fractionally funded competitors who maybe have a couple dozen VR employees and 10's of millions of dollar budgets.