Back in March of 2014, Facebook decided it was a good idea to buy Oculus. And who good disagree with that. Oculus is a virtual reality company who had debuted their headset, the Oculus Rift at CES 2013, and it left many journalists speechless about VR. Some might say that Oculus started this recent push for VR with many companies jumping on the bandwagon including HTC, Samsung, and even Google. The Oculus Rift is finally going to be available this year, with pre-orders already having opened up. The Oculus Rift is heading to customers in 20 countries on March 28th. The Rift is sitting at a $599 price tag right now during pre-orders.
Now where Facebook owns Oculus, it was inevitable that during the company’s earnings call last week that analysts and investors would be asking the company about the impact or affect that Oculus might have on Facebook in 2016. Facebook’s founder and CEO, Mark Zuckerberg mentioned that he doesn’t think it will impact the companies financials in the coming year. While he did point at the fact that pre-orders have been pretty strong for Oculus Rift – although no concrete numbers were mentioned – he doesn’t think that Oculus will lose money nor make money in 2016, but stay relatively close to breaking even. Facebook’s CFO, Dave Wehner mentioned that the Oculus Rift is “not going to be material to our financials this year”.
Facebook has many parts to their business. While their core business model comes from ads on their different apps and platforms, they do also own Instagram and WhatsApp. Recently WhatsApp opted to get rid of their yearly fee – which most people weren’t charged anyways. No mention of whether WhatsApp might be getting ads in the future, but it is probably likely. Instagram is already serving up ads and being a relatively small part of Facebook’s revenue. Facebook has over 1.44 billion mobile users right now. Making them a pretty big player around the world (with the exception of China, where both Instagram and Facebook are blocked with WhatsApp currently being available but that might change rather soon). In 2015, Facebook brought in over $17 billion in revenue. This means that for Oculus to be meaningful and impact their earnings they’ll need to either lose a ton of money, or sell a ton of Oculus Rift units.