Facebook & EssilorLuxottica › The Future of AR & VR

Early signals of a monumental shift towards AR & VR

By Lucky 33

Facebook & EssilorLuxottica › The Future of AR & VR

Facebook › $FB › partnered with European eyewear conglomerate Essilor Luxottica, Ray-Ban's parent company, to launch smart glasses in early 2019. Ray-Ban Stories, the smart glasses developed by Facebook & Ray-Ban, was launched on September 9, which marks a new chapter for Facebook as an eyewear developer that caters to the booming smart glasses market. These glasses allow the consumer to capture photos, record videos from a first-person perspective, listen to music, & take phone calls just like a normal smartphone.

Ray-Ban Stories come with a dual integrated 5 MP camera that allows the user to capture photos & easily record videos as experienced by the naked eye for up to 30 seconds, through a click of a button on the right-hand side of the glasses, or using Facebook assistant voice commands. Streamlined open ear micro speakers are built-in with a three-microphone audio array that delivers voice and sound transmission for calls and videos. Beamforming technology & background noise suppression algorithm provide an enhanced calling experience similar to what a user would expect from dedicated headphones. These features & an optimized Snapdragon processor, a capacitive touchpad, & a battery are fitted into the smallest possible frame one could imagine, which only weighs just five grams more than the original Ray-Ban Wayfarer design.

The glasses have a specially designed portable charging case to charge on the go. The technology of Ray-Ban Stories allows the user to pair up captured memories & stories with Facebook View app to import, edit and share them seamlessly on Facebook, Instagram, WhatsApp, Messenger and also on Twitter, TikTok, and Snapchat while facilitating to save content on the camera roll as well. Facebook View is a standalone app available on iOS and Android that lets the user import photos & videos from glasses and create unique content while having the freedom to control over what and when to share.

Ray-Ban Stories is just the first product of the multi-year partnership between Facebook & EssilorLuxottica. I expect the partnership between these 2 companies to result in more innovative VR products hitting the market in the next few years, but that is not the main reason why I believe investors should take Facebook's Virtual & Augmented Reality targets seriously. There are many reasons for that.

Facebook is taking Virtual Reality technology seriously, which itself is a good enough reason for investors to take things seriously as well. According to data collected by The Information, nearly 10,000 Facebook employees (or one-fifth of the total workforce), are engaged in developing augmented & virtual reality devices & software, which highlights that Facebook is very serious about pursuing the growth opportunities available with the increasing popularity of the VR technology. 

When I recently spoke with a few industry experts regarding the AI technology used by Upstart › $UPST › I made sure to inquire from them how Facebook could possibly integrate the VR & AR technologies to improve the user experience. These experts broadly discussed this topic and claimed that they would not be surprised if Facebook leverages this technology to become a mainstream VR & AR company that caters to the technological needs of multi-billion-dollar industries such as healthcare and education. One thing these experts agreed on is that these technologies will make connecting with people virtually feel much more realistic in the future, and I thought to myself, Facebook is going to be a big winner of VR ‹› AR technology.

Facebook imagines this will be a much broader thing than just meetings, think free-to-use courses online that teach everything from language to technology, an open-source project needs a contributors, a community charity that needs a volunteer fundraiser, a co-worker who needs coaching on a new presentation, a story that needs to be told. Facebook, the service we now know, will be entirely subsumed by the metaverse. The seriousness of its ambitions is reflected in its headcount.

Facebook realizes that there are a lot of scary dystopian elements to this, and in combination with all that lost trust, this can derail the whole thing. They have recently allocated $50 million to research ways in which to alleviate these issues. Facebook is working with experts in government, industry & academia to think through issues and opportunities in the metaverse.

Here are a few key areas where we’ll work with others to anticipate the risks and get it right:

Economic opportunity: how we can give people more choice, encourage competition and maintain a thriving digital economy

Privacy: how we can minimize the amount of data that’s used, build technology to enable privacy-protective data uses & give people transparency and control over their data

Safety and integrity: how we can keep people safe online & give them tools to take action or get help if they see something they’re not comfortable with

Equity & inclusion: how we can make sure these technologies are designed inclusively and in a way that’s accessible

—Andrew Bosworth, VP, Facebook Reality Labs and Nick Clegg, VP, Global Affairs, September 27, 2021

You can think of the metaverse as a massively multiplayer game, except it includes all social activities: meetings, conferences, education, live events, and of course gaming. As such it subsumes gaming, webcasts, video meetings, distance learning, & just about any activity where two or more people are together virtually.

Early signals of a monumental shift towards AR & VR

Facebook EssilorLuxottica Augmented & Virtual Reality

Facebook acquires Downpour Interactive, the developers of Onward. Facebook’s Oculus division has snatched up yet another popular virtual reality game developer. Recently, the company announced it has acquired Downpour Interactive, the studio behind the hit multiplayer military simulator Onward.

“We’ve seen great success with Onward on the Oculus platform for several years — first on Rift and more recently on Quest,” Mike Verdu, Facebook’s VP of AR / VR content, said in a blog post. “Becoming part of the Oculus Studios family will give Downpour Interactive the opportunity to cultivate both the Onward community with the full support of Oculus Studios resources, and, in the future, pursue other projects.”

Everyone from Downpour Interactive will move over to the Oculus Studios team “in some capacity,” Verdu said. He also confirmed that Onward will still be supported on all of the platforms where it’s currently available: the Oculus Rift, Oculus Quest, and Steam.

Dante Buckley, founder and CEO of Downpour Interactive, said in an FAQ on the studio’s website that Onward’s feature roadmap “remains unchanged” and that the studio plans to “accelerate the speed of our development” because of the acquisition. Downpour Interactive will also continue to retain “full control of all development,” he said.

The acquisition is Facebook’s latest to beef up Oculus Studios. The company bought Beat Saber developer Beat Games in November 2019, Asgard’s Wrath maker Sanzaru Games in February 2020, and Lone Echo creator Ready at Dawn in June 2020.

The launch of Ray-Ban Stories did not attract a lot of attention from investors, but with a good understanding of Facebook's VR strategy, it is very easy to see why this product launch marks a significant milestone for the company - Facebook wants the mass market (not just gamers) to embrace VR and AR products. With an effective strategy in place to pursue the growth opportunities available in this unique sector, I believe Facebook is poised to become the leader of the AR industry. Facebook stock price could hit $500 in the near future, and I am not making any adjustments to my valuation model at this time although I feel I will be obliged to make some positive adjustments in the coming months.

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