Virtual reality ads make their way to Facebook's Oculus headsets
reuters.com
reuters.com
How about by just selling games? I hate this mealy-mouthed way of deflecting that it’s not about Facebook’s revenue, but about “helping developers.”
The price points for games always seemed very high to me. In an ideal world they'd offer a "no ads, full price" version and a "discount with ads" version. My guess is we'll probably just be left with "full price with ads" as the only option.
Not really. $60 is an introductory price, but most games at that price launch with at least one $80+ special edition and are supplemented with $40+ of post-launch content with much higher margins than the original game. And that's before considering some of the more contentious monetization practices like micro-transactions and "loot boxes". In many cases devs and publishers slash the initial price of a game shortly after launch (usually a year or two) to increase player counts, because more players generally means more sales of post-launch content.
And that's something else nobody ever seems to bring up when discussing the stagnant price of video games - the ever-increasing sales volumes. The cost of producing additional copies of a game is negligible, especially with the rise of digital distribution, so each copy sold after breaking even is pure profit. Since there is basically no production cost, developers (in theory, at least) dump part of their profit into the development of their next title. This allows them to stay competitive and results in skyrocketing budgets. The high budgets are a sign of a successful industry, not a struggling one.
Despite the increasing budgets and seemingly stagnant launch prices, video game developers are more profitable than ever. It's because they are selling more copies than ever and have figured out plenty of ways to bring in extra revenue after the initial sale. If you ask me, things should go the opposite direction. A huge selection of cheap, high-quality indie titles have affected the relative value of "AAA" titles, to the point where I rarely consider spending full price on a game launched at $60. Either way, the industry has recently been dipping its toes in the water with a new $70 shelf price. We'll see if it sticks.
But that’s only one half of the story. The other is how tools, assets, hardware, knowledge and training have become much more affordable, streamlined and widespread.
What used to be a somewhat niche industry with barely any formal entry ways, is now a massively formalized industry dwarfing even Hollywood.
Just the publishing side alone saw a massive falling of gates with the emergence of the indie scene. IMHO there are very real economies of scale effects to this.
15 years ago games were still largely physical. That $60 included the physical games, cases, manuals, distribution, warehousing, etc. These days everything being digital companies don't have to pay that anymore. Sure there's a commission you have to pay on Steam/EGS but I highly doubt it's close to what having a physical distribution method cost.
So the way the $60 pie is split up today is totally different, and I imagine a much, much larger portion of that goes to the developers.
The benefit of ads is that ad space appreciates -- because Facebook controls supply, and revenue follows inflation and demand.
So as GP alluded to, this can be summarized as Facebook saying "We'd like to have bigger future profit margins on VR."
For the price of a movie ticket and a coke, you can get a dozen hours of entertainment. That seems like a pretty good deal to me.
And the $60 are AAA games where you'd easily get 30-40 hours worth. These have budgets of ~$70 million; they have to make their money back somehow.
One of the secondary reasons I've avoided Oculus is that it is a closed system; you can only buy from a single provider. You're much more likely to find sales on VR games on Steam.
Video games on Steam are the best ROI for entertainment period, right up there with a good pair of hiking boots.
"Superhot VR" (25$) 2-3 hours, if you are a completionist, about 6 hours.
"Star wars: Tales from the galaxy's edge" (25$) 2-3 hours, if you are a completionist, about 4 hours.
I think the longest single player VR game that exists now is "The Walking dead: saints & sinners" (40$) which is around 11-14 hours long, but it is barely linear, it is more like a fallout/far cry game but with far less interesting locations. Completionist have played it for 30 hours in total.
There's also a ton of free/discounted games on the Epic store, 3rd party key resellers, and subscriptions like Xbox Gamepass. These are all possible because the PC remains an open, competitive platform - so that point stands.
Along with that they killed the four packs that used to be common for multiplayer games.
I buy most of my Oculus games on Steam, not the oculus store. Half Life Alyx is a Valve game after all.
Or maybe the movie ticket with overpriced coke is just a bad deal?
A lot of it is also pretty relative down to a personal level and preferences: Some people can entertain themselves with a deck of cards, not even worth $1, for a nearly unlimited amount of time.
Think about entertainment options and name one that is a better deal than $60 for 20 hours worth. It's just not common, perhaps outside of books. Life is expensive and publicly available entertainment is far from an exception.
https://sf-static.sixflags.com/wp-content/uploads/ttic-sp_sf...
How do you go into a shared VR environment and have ads appear for one user and not another?
I'm on-board with "just make everyone pay for apps" but it's very hard to decide what's going to be worth $30. My favorite VR game is free, but I went ahead and paid for the optional content (non functional) because I want to support the developers.
We've seen this all before with the iOS App Store and the end game is just everything free with intrusive ads.
The point in chasing customers like me is that I won't watch ads, but I will spend money, even $20+ for an iOS game. Streaming services have figured this out and offer ad-free versions. Some iOS developers will allow you to pay for a game to remove ads. (The problem on iOS is there is no easy way to determine which games are like this, or to filter based on things like this in search.)
And I like VR. So ads in VR means I won’t be able to play VR games.
So both decreases my pleasure. Especially since I already bought an oculus back when the model was just selling games.
My bet's on menu ads being first
Oculus 2025: https://www.youtube.com/watch?v=YlGklt4BSQ8
I would rather just pay for stuff and be done with it rather than have my attention and sensorium sold to the highest bidder.
/s of course
That's why it's awesome that Valve is so heavily invested in VR to counter that. They might not have more money than Facebook, but they have more than enough to compete with them. Plus, they have the expertise in video games that Facebook doesn't.
It's just a shame that Valve is by all accounts a highly dysfunctional company.
What Valve is doing with the Index is really cool, but they're still operating as if they're trying to sell to VR enthusiasts, while Facebook is cornering the market by trying to sell to the general public.
https://store.steampowered.com/hwsurvey/Steam-Hardware-Softw...
I don't think that's true. The main problem right now is that VR is still (even after all these years) an unproven/experimental consumer product.
It's like buying a game console in the 70s-80s compared to buying one today. Back then, video games were still largely experimental and you were more likely to get garbage than gold. Today, designers know what works/doesn't work, and consumers can be confident in their purchases.
VR is not like that yet. A "VR Game" is still a vague and uncertain term, and consumers can't have confidence in it yet. There are some great VR experiences out there, but there are many many more garbage ones.
I think that a company focusing on finding a good fit for VR is going to be better off long-term than one just trying to corner this early market.
Example: If Valve figures out the "secret sauce" for VR games (much like Nintendo did in the early console wars), it's not going to matter how cheap Facebook's headsets are. People (including Oculus owners) will flock to Steam for the superior experiences while Facebook scrambles to make clones. With a failed "platform", Facebook will ultimately lose.
If anything, Facebook's investments to flood the market with cheap headsets (possibly even subsidizing them) could end up helping Valve in the long term, since it just means more potential Steam customers, and it gives Valve the opportunity to experiment with the high-end stuff without worrying about the market completely dying in the meantime.
But I don't like seeing the same ad over and over again. I don't like seeing ads of stuff that I've already bought and I especially don't like to watch a commercial for the thousandth time for a video I'm not sure even is worth watching.
I can agree that ads are not necessarily bad.
Ever heard of Edward Bernays?
However, popups or videos in front of yt, no thanks. As long as it doesn't waste my time or plays sound go ahead.
That said, I have it blocked anyway.
I'm very happy with my Vive Cosmos and it works without a Facebook account and hasn't shown me any ads so far.
I sincerely don't miss the lighthouses and cables, and can make a new area in any part of the house, at any time.
I just wish it wasn't owned by Facebook. But there's no competitor, unfortunately.
Cosmos also has inside out tracking so no beacons and I honestly don't mind the cables. I never really notice them when I play. I did with the original Vive when I tried it at work, though. As for the PC, I'm an avid gamer and graphics programmer for a AAA studio. My VR is set up in my home office so I have access to a more than adequate PC, anyway.
What I really do mind is a lack of graphical fidelity. Cosmos was the first option I tried which really felt good enough for me (the original Vive always felt cool but not quite there) and I know Quest has very similar resolution. But noticeable compression artifacts sound like something that would really bother me.
I think that's an inaccurate assessment of 'people who don't want to see ads', given that statistics put internet wide usage of ad-blockers at around 42%.[0].
Maybe it's just that no one wants to pay their captors for golden ear-muffs and blinders when they themselves are the ones responsible for the poor user experience.
I vehemently refuse to pay for YouTube Premium for that exact reason. I get ads that amount to something like "You know how we just stuff ads down your eyeballs constantly? You know how it's really annoying? For just X.99 a month, we'll no longer do that!"
These enrage me to the core. Now that I have NewPipe and other methods of watching YouTube without ads and artificially freezing the stream when I switch away from the app, the official app is useless.
This is a really stupid oversight.. Twitch did subscriptions first and there they do disable ads on the channel you subscribe to (if it has them).
No one's forcing YouTube to send me the videos either. If it gives me ads, they will be deleted before they even make it to my screen. If they don't like that, they are free to return 402 Payment Required instead of giving me stuff for free.
My touchstone for excessive advertising is a Polish TV station called Polsat, which often had very good programming but also lots and lots of ads. We often joked that Polsat programming was "all ads, sometimes broken up by a few minutes of actual TV". It wasn't quite that bad, but it was true that you would get just under ~10 minutes of adverts per every 15-25 minutes of programming.
YouTube exceeds that ratio, these days. And when that happens, I'm almost positive it's time to start packing your toys and looking for a different source of entertainment.
They made a statement about people who are willing to PAY not to see ads. People don't want to pay for anything. Give me free content! And then when they don't like the ads - give me a free ad-blocker!
For me, I'm happy to pay a reasonable price for most things as long as I'm convinced I'll like it. But that's a problem with most content - uncertainty.
I would only get the first by paying, and I have found videos without ads so more more relaxing.
Apple is still not supporting any free codecs on the web. Apparently they actually do have a hardware VP9 decoder in the newest chips but it's only exposed to the YouTube app?? https://forums.macrumors.com/threads/apple-m1-vp9-av1-decodi...
For me, I'd rather not watch Youtube at all if I have to pay to use it. I have found that it is an incredible time-waster and really adds very little value to my life. If I had the self control I would stop using it on my own.
I constantly find that youtube's algorithm just recommends me less interesting stuff over time. If I could have some decent controls on it, paying for an ad free experience would be worthwhile.
People's behavior depends on the circumstances they are given, and if "free (with ads)" is one choice, then indeed a lot of people will choose it over paying. However, if option is not given, it doesn't mean everyone who would've picked free are not going to pay at all.
There are some highly popular freemium/ad supported games but also lots of very popular games that you simply must pay for. Applying the 1% number from products where the choice is ad-free-or-paid to must-pay-for games and assuming they'd get 99x more users if given for free with ads is just completely wrong.
In general, people seem quite willing to pay for games (this may be less true in mobile, that's a rather different market). The challenge isn't that people don't want to pay, it's that the market is extremely saturated and it's hard to stand out from the crowd & produce a game that everyone wants to play over all the other choices.
No, everyone agrees that ads are annoying. I install uBlock Origin on every single browser I come across. Every single time, people take notice almost immediately. They always tell me the internet just feels so much nicer. Many times they can't explain why, they just know.
Ads are a blight on the modern web. Everyone prefers the low-noise version.
With uBlock Origin we can show them a better world.
Think this might eventually be their downfall, if Sony could ship a stand alone headset at Quest quality they'd probably be able to eat FB's lunch at this point because the push to force you to use an FB account and now pushing ads into it are making it far less appealing.
Really they should have just let it fly for a few more years like how they allowed Instagram to be Instagram for a few years before they ruined it with ads and algorithms gradually.
Facebook is an advertising company.
It's simple: if you don't want ads, delete your Facebook account, and don't ever buy Oculus.
I got an HTC Vive Pro 2 three days ago, and it's sweet. No Facebook required.
Had an oculus rift DK1 at the time - deleted my accounts, unsubscribed from everything, and bought an HTC vive shortly after it came out. Wasn't buying that at the time, and I feel vindicated now.
Facebook killed Rift few years later.
The Vive Pros are at its name implies, for pros, or for people with big budgets who want the best. You simply can't compare.
I think that if you don't want to buy Oculus and have a reasonable budget (~$400), WMR headsets are the only alternative.
Letting ads and Facebook behavioral surveillance into your life is way more expensive yet.
The real differentiator is the cord free aspect of the quest 2.
This is one of the few ways to make big corporations actually listen.
I despise Facebook and advertising.
We need an alternative.
They are years behind. FB now has a significant patent library advantage, and nobody is even making standalone headsets with a strong software library.
There are a bunch of other independent online retailers — buy from another one.
There are a bunch of other independent food delivery services — order from another one.
--
When you really think about it, it's not really true though.
Monopolies reduce choice.
Oculus Quest is the least expensive, competitive, standalone headset. Least expensive option often pairs with ad-supported.
We bought a Quest before Facebook bought Oculus, and we're very disappointed with that turn of events. I think most people would be better off opting out of VR until there's a non-Facebook standalone headset under $400 (like the original Quest once was.)
EDIT: Correction - we did not buy the Quest before it existed. We bought it a bit before the announcement that you'd eventually need to use a Facebook account with it.
Now that I think back, I think we knew that, but it was still an "Oculus" account at the time, before the "Facebook account" requirement was announced. That seems to have been announced August of 2020... just weeks after we bought our Quest.
(in response to the edit) I can see that, my first VR headset was the CV1 Rift and my logic at the time was similar. Sure Facebook owned it but everything seemed to be still fairly separated. None of what happened after was particularly surprising.
Can't even use escapist reality to escape from ads now.
IMO that's worse. You spend more time in game than on the menu screen. Sadly this is likely a pandoras box we will not be able to close.
Valve has tried that a long time ago too and it wasn't successful. There's still some hope.
I’d be upset if these ads were on the Oculus hardware that I paid for in the games I bought, but if it’s just going into freemium games then it’s business as usual in the ad space. I haven’t even heard of the “Blaston” game the article cites as one of the first games to adopt the ads.
I seem to be able to avoid ads quite a bit through tools & life style choices. I therefore ask this as someone whose personal opinion does not like the do anything for views to sell ads economy & avoids it as much as possible.
Imagine Billboards in the virtual worlds of your games for now. Image below if you want to see an example.
https://cdn.vox-cdn.com/thumbor/tXt80SaN80Qsg6MdMlC4fvbHcUA=...
Yes, facebook deserves blame. Yes, the game developers deserve blame. These can both be true at the same time.
I'd like to invite you to turn that around. The freedom that we all get to exercise cuts both ways, it is not exclusively for companies to be active and consumers to passively, quietly accept things they dislike.
Citizens are free to complain about ads if they want to, and companies are free to to respond to market pressure by relying on more or less advertisement.
As a company, you might dislike negative consumer feedback, but you should just accept it as a tradeoff for making certain unpopular business decisions, or you should offer ad-free platforms and avoid the problem entirely.
Complaints are not inherently bad. They're just an effective consumer practice.
I agree, but I wasn't commenting at a societal level. I'm saying that at an individual level I see it as a waste of energy to get stressed out about something like ads in video games. There are so many ways to enjoy life, and stress is so bad for health.
They shouldn't be.
Also, cars? You get ads in your own car? Wow.
But I paid for my Oculus Quest, and then I just paid for a game. I do not therefore want my eyeballs rented out.
Edit: I'd also much rather the Quest platform not become the cesspool that is the free-to-play ad-infested world the iOS AppStore has become. Please can we emulate the Nintendo model and encourage quality games you pay up front for.
It is vastly underpriced for the hardware it gives. Some is paid upfront and the rest is paid in data collection etc from facebook.
They have a "unconnected" version for sale for 800 USD and a service fee of 180 bucks. You can see how much you have not paid for in those prices when you go with the ad version.
If the Quest 2 was not associated with facebook I would have owned one a long time ago.
That pricing isn't for an "unconnected" version, that's for a business/enterprise version and yearly support. You can't use that figure and directly convert that into a value you place on your data or ad revenue.
Your point still stands, the Quest is heavily subsidized by user data on the premise of future ad revenue. This has been a given from the moment Facebook decided merge Oculus and FB acounts into one. I'm just correcting a false assumption that the $800 model is just "Quest -facebook", it's not.
The same Facebook account that FB can at any time arbitrarily block and demand the owner properly ID themselves.
A situation that originally was deemed as “will never happen” when Occulus originally got acquired by FB.
At least there is also Valve to offer an alternative that’s more privacy minded. But this makes their hardware offerings more expensive by default, as the device prices can’t be subsidized by monetizing their users.
Valve exists but Valve's alternative is way pricier and requires a computer right? Facebook would be able to mass-produce these devices at a low cost in a completely different way it seems.
So since it is an android system under the hood it would be very possible to make VR apps that would work on all android systems. This would be so much better for the ecosystem as a whole.
Surely there are WebXR standards that would basically be webapps so they would be totally platform independent however this will surely not cut it for all applications.
Seeing how social media companies can manipulate politics and steer behaviour through ads imagine what happens in a VR only reality. This is a total nightmare scenario.
Would it be possible to try to create some sort of campaign to make people more aware about the bad effects of this lock in. Perhaps by finding a suitable chinese device that remains open and try to favour that over facebooks versions. Sort of how Huawei managed to more or less copy devices at a lower costs and get into the market that way?
Microsofts Mixed Reality standard deserves some attention as well obviously. Again this requires a PC and they seem to be a bit more pricier as well. These wouldn't require base stations as well.
The problem isn't technical, it's monetary. Facebook pours out tons of money to kickstart developers and get games out which is why they have a monopoly. There are few technical hurdles in the way of making Oculus games work on other headsets.
Well, the only "new" headset is the HP Reverb G2 which is indeed in the premium segment. But if you consider the used market, Samsung Odyssey+ is an incredible value option.
I hope Microsoft aren't completely sitting on their asses, they have everything they need to enter the standalone market and provide an alternative to Facebook. They have the Qualcomm partnership, they already have a standalone AR hardware project, it really shouldn't be hard to offer Windows-for-headsets to partners like HP…
I think the problem with the PC ecosystem that it is difficult to find an open framework that covers all the different systems.
All in all I am quite impressed with the Microsoft effort. It doesn't seem to lock customers in. There seems to be a possibility to use them with Linux as well.
Also the Microsoft AR system seems quite well executed as well even though it is definitely to costly for mainstream adoption. This is probably by design though and will go down for sure due to economy of scale.
So there would be web technologies that covers most of the platforms, albeit at a performance cost. At the end of the day maybe this is all about which SDK that covers the most platform and is the best for the developers.
So I pose the question: What actions may we take in order to help ensure a future of non-implementation of "the user is the product" systems, with a specific focus on those actions that are most likely to be the most efficacious at accomplishing the stated goal in an expedient and lasting manner?
Very interesting. The Oculus is quite a good deal at 299 USD given its technical specifications. I suspected that they were selling them below cost and subsidising them through stuff like this.
The issue is that, as a data-driven organisation I am certain that they would have assessed the likely impact of including ads on turning away users and made that the decision.
1. A powerful PC (at least $1000)
2. The headset (at least $300)
3. The game (Beat Saber $30)
So after paying this much ($1330) why is advertising needed? Do AAA games need additional ad funding after selling their games? Do indie game devs need additional ad funding after selling their game?
The problem with ads is that is it inherently disruptive and annoying wherever it is inserted (billboards, movies, TV, youtube, webpages). Why do you want to annoy and irritate customers paying a premium for your next gen platform?
I don't regret my purchase quite yet though. It's been an amazing device for our whole family. The VR bar has been set in eyes of my kids and they want more.
I wonder if my PiHole will block these ads?
What VR lacks in game variety, it makes up for in how unique the experience is. VR consoles will be able to get new games and apps, while "regular" consoles won't get more unique without releasing new models.
Gaming in VR is also a lot more beginner friendly. Console Controllers are not intuitive, whereas VR controls almost always are.
In short, VR is already very viable and its future is extremely promising. But if you want to short stuff, be my guest.
Almost all console controllers follow a similar control scheme for decades (minus the front buttons like "share" or the touchpads). I don't see them as unintuitive.
I invite you to watch this extremely enlightening video: https://youtu.be/nyJUza39ELE (it's also a good channel in general)
hold wand to chin to Doubt
(https://www.statista.com/statistics/1005403/global-xbox-one-...)
VR seems to be one of these things that keep on being promising I suppose...
VR as is today is a new tech. The Quest 2 is a recent release, second model of a new lineup. Xbox 360 was released in 2005 so look at xbox sales in like, 2006 instead. Which… checks numbers, hey look, 4 million units.
VR will be a strong niche for years to come.