[Week 39/52]: My XR Opinion. Meta’s new VR goggles glasses.
[Topic] More wasted VR money? Do it even matter when you’re drowning in advertising income?
Feelings on Meta VR
Back when everyone was sooooo hyped on Apple VR, I returned mine the day I bought them. I could tell in my gut this was not a hit product
Unfortunately, I’ve not yet tried the META VR, and everyone I’ve asked so far also said, “not yet.”
Those are insiders.
So.. who has actually tried this thing? Message me.
Out of Favor is the Bargain
I was very excited when the stock was beaten down on price, because the company value in that scenario, even with the extra spending on data centers and the off-balance-sheet debt, still felt like a pretty great deal.
We’ll get into how I’m starting to value companies at a later date, but let’s just say it was near an idiot-proof price many months ago, in my eyes. NFA.
Warren Buffett put it perfectly:
“Be fearful when others are greedy, and be greedy when others are fearful.”
Then they launched Muse a few weeks ago, and the world opened up to the idea that maybe Meta actually has a very smart and coherent AI strategy. Maybe they’re being a lot more intelligent with their capital than we thought.
At Meta Connect, it seemed that excitement peaked. The stock had run up 30% in the month and was now in the $700s, and investor sentiment was once again getting very bullish.
“Should I buy Meta?”
In my opinion, that’s the first yellow flag.
When I was buying it, nobody else wanted it, and people said, “Why would you buy Meta?” I had to live with that for months.
Now that everyone’s buying it, I’m way less excited about the bargain.
The potential returns are highest when you’re most uncomfortable.
As Buffett wrote, passing along a lesson from Ben Graham:
“Price is what you pay; value is what you get.”
If you let the price tell you it’s going up, fundamentally that means you already most likely missed the first 15%. Anything short of a re-rating on multiple then will result in mediocre investment at best.
The business can still be great while the bargain gets a lot less great.
And that gets me to virtual reality.
Back to the Goggles Glasses
Just when investor sentiment was turning positive on Meta AI, just when people were starting to associate Meta more with Muse than the metaverse, Zuckerberg decided to get on stage and once again remind everyone of the tens of billions poured into a technology that consumers don’t seem to want at scale.
He unveiled another pair of virtual reality goggles. To me, it’s another reminder of the tens of billions in potential earnings power that we’re essentially throwing down a drain.
That drain is not clogged, and money is being flushed down by the minute.
Now, this was also my bullish thesis on Meta, because I recognized how much money they were wasting and, at the same time, how insanely profitable they remained.
For the most part, this is a business drowning in cash.
However, that cash still has a particular value, and what Meta does with it matters. That’s where ROIC, or return on invested capital, comes in. Are they generating 30% or more annually on the incremental capital they invest?
Muse was spot on, but sentiment already feels like it’s shifting. It’s starting to feel a lot like Threads.
In my eyes, Meta needs the results and the narrative to support a move toward $1,000. Otherwise, I can see it heading back toward $500.
Light-Weight.. but I Might-Wait
I think Meta got closer to what they needed to do in the eyes of consumers. But this should have been done in 2022!!!
And don’t tell me it wasn’t possible. There were SO MANY extra bells and whistles that nobody used in mixed reality headsets.
Standing on stage in 2026 with yet another pair of virtual reality goggles, even lighter ones, still leaves me wondering what I would actually do in them if I owned them.
Zuckerberg described them at Connect like this:
“It is a glimpse of the future.”
I want something I’ll use every day.
Plus, the price tag makes it so that I really have no interest in buying them. At $1,299, I would rather save that money and put it toward the iPhone Duo. Meta says the glasses will ship in the spring.
Now, I’m not saying Apple is a good value or a bargain either. I’m just saying that, as a consumer, if I’m going to spend $1,500 to $2,000 on a piece of technology hardware, I’m definitely going to spend it on the iPhone Duo, and definitely not on Meta VR glasses.
I do respect and appreciate that they decreased the weight of these glasses. I would agree that’s a huge win.
But there are other fundamental issues that have always been an issue, including battery, comfort, performance, social acceptance, use cases, the developer ecosystem, and more.
Where Did the Developers Go?
While many incredible people still grind hard (shout out Alix Olivier), I think probably the biggest challenge for Meta currently is not just winning consumers over to VR. It’s winning the developers back.
From what I’ve seen, it feels like they’ve lost about 80% of VR devs to AI and other correlated technologies. That’s my impression from the ecosystem, not a measured industry statistic.
In my opinion, Meta has some of the best computer vision technology for AI, thanks to billions of dollars spent over the decade on outward-facing cameras and spatial localization. Apple is another obvious heavyweight here.
That’s an enormous foundation to build on.
And to be fair, Zuckerberg did explicitly describe the shift toward AI at Connect:
“So, we have shifted our focus to building the best devices for personal super intelligence.”
That’s the direction I want to hear.
But then we’re back to the VR goggles, and for me, that brings back all the same questions about consumers, developers, and how much more capital this will take.
I Want VR to Work
As many of you know, virtual reality has a dear place in my heart.
Frankly, if these glasses were to take off and be owned by 30, 40, or 50 million people, nothing would make me happier. It would make me feel that I actually spent the last 10 years working on something that matters.
However, I’m getting a ton of yellow flags with this. I’m also not really grasping why Meta is showcasing this now when I still need to see whether the finished product is ready for consumers.
This feels a lot to me like Apple telling me Siri AI was coming in 2024, and yet I’m still waiting for the actual product that works and is up to company standards.
How I Could Be Wrong
Let’s put the probability at 35% to 45% that I’m wrong.
These would be the reasons:
1. I’ve never demoed them.
My estimate is that they’re amazing, but not ready for prime time. I could be wrong, and they could go viral after release.
2. The remote work advantage is 10x a laptop.
If so, sure, I’d absolutely buy a pair!!! Happily!!!
3. The experience is ACTUALLY seamless.
Battery, sign-in, AI first. The whole thing. Actually seamless, not just hand-waving seamless.
If those three end up leaning in Meta’s favor, then I will be the next man in line waiting to buy my headset.
But until I see it for myself and hear from trusted sources, I don’t plan on buying it, sadly.
~Don
Sparknotes Post: https://x.com/donversationz/status/2104750712613667080?s=46
Ps. I feel I have a great perspective given my background: I invested in VR and helped founders for a decade, worked at Meta, ran my own avatar startup with $5 million in funding, and was the AI chatbot advocate on my Meta team while working ther… BUT…. I could be soooo wrong!!! I can’t be sure until I demo them... that seems to be the exact issue. Where are the demo’s?