Virtual reality and augmented reality represent a key area of investment for Facebook, said CEO Mark Zuckerberg on Wednesday during a conference call, on the sidelines of the publication of the group’s quarterly results. And while the company has taken some key milestones in the development of virtual reality, Mark Zuckerberg said that creating augmented reality glasses that can be accepted by the general public will be “one of the most difficult technical challenges in the world. decade “.
The challenge comes down to “getting a supercomputer into the spectacle frame,” said Mark Zuckerberg. “I find this to be a very exciting issue to work on. And I think once that is achievable, the potential there will be quite significant. On a highly competitive field, these statements echo recent comments made by Tim Cook, for whom augmented reality is also essential to the future of Apple.
For years, Facebook has clearly communicated on the potential it sees for virtual reality and augmented reality to become, as its CEO says, “the next computing platform”. Last month, Facebook notably lifted the veil on its investments in areas such as neural interfaces to interact with augmented reality.
Mixed realities take an important part of the R&D budget
“I believe that virtual reality and augmented reality will allow a feeling of presence and social connection deeper than any other existing platform,” said Mark Zuckerberg on Wednesday. “And they’re going to be an important part of how we interact with computers in the future. So we’ll continue to invest heavily in crafting the best experiences here. And this represents an important part of the growth of our overall R & D budget. ”
Facebook’s better-than-expected performance over the past few quarters “has given us the confidence to significantly increase our investments” in augmented reality and virtual reality, the CEO said. Along with two other key areas – commerce and support for creators – AR and VR “have the potential to change the trajectory of the business in the long run”.
Zuckerberg also put the emphasis on augmented reality and virtual reality on Wednesday due to the success of the Oculus Quest 2, Facebook’s wireless virtual reality headset. The product is doing better than expected, even after the holiday season. “In terms of what’s changed, I think the big chunk here is that Quest 2 is doing pretty well,” he said, adding that there has been “a very real shift, in terms of adoption and engagement. “
In addition, Quest has “by far the best range of VR content,” he said. Facebook still has “a long way to go” to build its AR and VR platforms, however, noted the CEO. “But I think the feedback we’re getting from our products gives us more confidence that our prediction for the future here will come true and that we are focusing on the right areas. “
Strong results thanks to higher advertising prices
In addition, Facebook on Wednesday released strong financial results for the first quarter, in large part due to the rise in the price of ads. “We’ve had a strong quarter because we’ve helped people stay connected and businesses grow,” Zuckerberg said in a statement. “We will continue to invest aggressively to deliver new and meaningful experiences for years to come, including in newer areas such as augmented and virtual reality, commerce and the designer economy. “
In total, Facebook’s first quarter net profit was $ 9.5 billion. Revenue was $ 26.17 billion, up 48% from the previous year. Daily active Facebook users were 1.88 billion on average for March 2021, an 8% increase year over year. Its monthly active users were 2.85 billion as of March 31, an increase of 10% over one year.
The social media site derives the vast majority of its revenue from ad sales, and the average price per ad in the first quarter was up 30% from the previous year. At the same time, the number of ads served during the quarter increased 12% from the previous year. “We expect ad revenue growth to continue to be primarily price driven for the remainder of 2021,” CFO Dave Wehner said in a statement.
However, while ad sales are booming for Facebook, Dave Wehner warned that the company expects “increased headwinds in ad targeting in 2021 due to regulatory and platform changes, including the recently released iOS 14.5 update ”. Apple’s mobile operating system update is expected to start impacting Facebook’s business in the second quarter, said Dave Wehner.