Reviewing Mark Zuckerberg's AR/VR Strategy From 2015
Around the announcement of the consumer Oculus Rift in 2015 Mark Zuckerberg made clear the long-term strategy for AR & VR.
The document in this post was originally published by TechCrunch in 2019 in the build up to the release of a book by Blake Harris called The History of the Future. The email was sent by Mark Zuckerberg on June 22, 2015 with the words “VR / AR strategy” in the title. I’ve bolded key segments and interspersed each paragraph with questions and commentary looking back at how this document was applied first to Oculus then to Facebook and finally to Meta.
With our recent discussions about accelerating our work in VR / AR, I thought it would be useful to articulate what goals I hope we accomplish with our investment.
Our vision is that VR / AR will be the next major computing platform after mobile in about 10 years.
Why is Zuckerberg having staff think about 10 years from now instead of how to improve the experience in VR headsets next quarter through constant regular value production?
It can be even more ubiquitous than mobile - especially once we reach AR - since you can always have it on. It’s more natural than mobile since it uses our normal human visual and gestural systems. It can even be more economical, because once you have a good VR / AR system, you no longer need to buy phones or TV’s or many other physical objects - they can just become apps in a digital store.
Apple enters the market at year 9 of this 10 year timeline with a VR headset that does AR incredibly well and uses a battery pack shaped very similarly to iPhone while designed to replace TVs.
Beyond the sheer value we can deliver to humanity by accelerating and shaping the development of this technology, we have three primary business goals: strategic, brand and financial.
How does “shaping” this technology deliver “sheer value”? That word does too much work here.
The strategic goal is clearest. We are vulnerable on mobile to Google and Apple because they make major mobile platforms. We would like a stronger strategic position in the next wave of computing. We can achieve this only by building both a major platform as well as key apps.
Whatever definition Zuckerberg and his lieutenants have for “major” and “key” helps contextualize moves like attaching Facebook accounts to Quest activity, killing Echo Arena and shuttering game studios.
I will discuss the main elements of the platform and key apps further below, but for now keep in mind that we need to succeed in building both a major platform and key apps to improve our strategic position on the next platform. If we only build key apps but not the platform, we will remain in our current position. If we only build the platform but not the key apps, we may be in a worse position. We need to build both.
It is hard to imagine phrasing that would create a less focused management structure underneath Zuckerberg’s vision than framing the plan in this way. Again, why is this not about regularly stacking value for people excited to explore what it means to wear a VR headset from Oculus?
From a timing perspective, we are better off the sooner the next platform becomes ubiquitous and the shorter the time we exist in a primarily mobile world dominated by Google and Apple. The shorter this time, the less our community is vulnerable to the actions of others. Therefore, our goal is not only to win in VR / AR, but also to accelerate its arrival. This is part of my rationale for acquiring companies and increasing investment in them sooner rather than waiting until later to derisk them further. By accelerating this space, we are derisking our vulnerability on mobile.
The users of services are called “humans” and when a bunch of them get together they form a community. “The actions of others” in a business environment is called competition, so Zuckerberg is suggesting here that competition might make people “vulnerable” to leaving him, which is how abusers think.
The brand goal is also simple. The weakest element of our brand is innovation, which is a vulnerable position for us as a technology company dependent on recruiting the best engineers to build the future. Having an innovative brand will pay dividends not only in recruiting but therefore across all of our products and other efforts as well.
The idea that Zuckerberg sees the weakest part of the brand as innovation rather than trust and providing actual value to users buying a computer highlights one of the biggest failures in this strategy. The Oculus Rift in 2016 used multiple cameras to do proper tracking while competition at Valve shipped lasers that were architecturally the reversed concept. Whether they actively thought about it or not, Vive users visited VR without their bodies seen by cameras. Now Zuckerberg ships a camera on every device just hoping people will learn to need computer vision in their lives everywhere they go. But where is the value in that? And what is the effect on trust?
An innovative brand comes from building tangible new products. Our work in VR / AR is the best example we have. Our core social networking work is no longer new, Internet.org is extending something rather than inventing it, and Al is not yet tangible. We can do more to tell our story in each of these areas, but succeeding in VR / AR has the most innovation potential in the next 5-10 years. Of course we need to succeed in VR/ AR to gain any of these brand benefits, but if we do, this will be very valuable.
This is one of the most salient points of this document. How did this insight that ““our core social networking work is no longer new” get lost by 2020 when their “tangible new product” got forcibly linked to Facebook accounts? Who decided to link the part of the brand in freefall, that Zuckerberg recognized was a problem in 2015, to the freshest part of the company?
The financial goal is the most specific and this is where I’ll discuss which aspects of the VR / AR ecosystem we want to open up and which aspects we expect to profit from.
Now we’re getting to the good stuff.
I think you can divide the ecosystem into three major parts: apps / experiences, platform services and hardware / systems. In my vision of ubiquitous VR / AR, these are listed in order of importance (although it’s worth noting that Apple has built the world’s most valuable company with a high-end vision by reversing that order).
Echo Arena. Beat Saber. Supernatural. How did Zuckerberg’s lieutenants forget the focused thinking associated with the word “ubiquitous” while acquiring software that asked people to carry around a headset and two controllers? Zuckerberg has teams working on hand and eye tracking throughout this entire journey, but they only ship one eye tracking headset in 12 years. I demoed eye tracking in 2017 and never wanted to use a headset again without the feature. Headsets without eye tracking are arguably a dead end now that we have hindsight.
The key apps are what you’d expect: social communication and media consumption, especially immersive video. Gaming is critical but is more hits driven and ephemeral, so owning the key games seems less important than simply making sure they exist on our platform. I expect everyone will use social communication and media consumption tools, and that we’ll build a large business if we are successful in these spaces. We will need a large investment and dedicated strategy to build the best services in these spaces. For now though, I’ll just assert that building social services is our core competence, so l’ll save elaborating further on that for another day.
Oof. The idea that Zuckerberg could not figure out how to align social services with this strategy document suggests he hadn’t any real solid plan for how to benefit from the discovery of affordable consumer virtual reality.
The platform vision is around key services that many apps use: identity, content and avatar marketplace, app distribution store, ads, payments and other social functionality.
Bigscreen was unable to set up a video rental store on Quest headsets due to the Facebook’s need for “payments”. Why make competition instead of partners out of passionate developers? When it comes to ads, you can also imagine someone high up at Facebook thinking “the real world has ads so why wouldn’t VR have them” without realizing that one of the chief benefits of putting the headset on would be to escape the constant creep of advertising.
These services share the common properties of network effects, scarcity and therefore monetization potential. The more developers who use our content marketplace or app store or payments system, the better they become and the more effectively we can make money.
This is what you say to staff if you want them always trying to kill good things by arguing that there’s greater “monetization potential” elsewhere.
It’s worth noting a few things. First, these platform services should be cross platform.
Valve kept Oculus out of Steam and Apple policies changed to stop apps tracking behavior.
Most of the services can be offered on iOS, Android, on desktop, etc. On Android, we can both offer an app store and offer many of these services to apps distributed through Play - if we app switch to our preloaded marketplace for purchases, we won’t even have to pay Google’s 30% rev share. Second, this platform definition is not actually an OS in the technical sense. In modern OSes, however, most of the value comes from advantaging the OS provider’s own platform services on the devices where its OS is installed. I think our primary platform strategy should not be focusing on building a fully independent OS, but owning these core platform services across all systems. This will be challenging as OS providers will try to push us out, but if we build superior services and provide things OSes need (eg Unity support), then we have a good shot at success.
Within a few paragraphs of reading why Facebook wouldn’t allow Bigscreen to make a profit from video rentals on Quest, we see Zuckerberg make clear he’s waging a very specific battle against Apple, Microsoft, and Google for the very same funds.
The last part of the ecosystem is hardware / systems. This category includes all of the core technology required to make VR / AR work but that has little sustainable business value independently: the headsets, controllers, vision tracking, low-level linux and graphics APls. These pieces all need to be very good for the overall ecosystem to be viable. For example, smartphones needed good touch screens, battery management, radio technology, etc. But aside from brand, patent enforcement and building teams that are consistently far ahead of everyone else, this is the most difficult part of the ecosystem to build into a large business. Even when companies do succeed, no single hardware company gains ubiquity like our vision requires us to do with apps.
Arranging hardware / systems as the least important of the three priorities is why Meta shipped Oculus Rift, Rift S, Go, Quest 1, 2, 3, and 3S all targeting specific prices rather than minimum viable consumer experiences. He even acknowledges that “vision tracking” is key here, and yet it is absent from all those devices.
Developing hardware and low-level systems is very important for a few reasons. It helps us accelerate and influence the development of VR / AR. It gives us a significant opportunity to integer our platform services across all systems (not just ours). And if we do consistently great work, it could potentially become an important revenue driver like it has for Apple.
Giving hardware teams this little ground to stand on with an “if” here is why we have Framework laptops in 2026 running Linux and they aren’t made by Facebook.
Our overall vision for the space is that we will be completely ubiquitous in killer apps, have very strong coverage in platform services (like Google has with Android) and will be strong enough in hardware and systems to at a minimum support our platform services goals, and at best be a business itself.
This is the ultimate failure in Meta’s strategy thus far and the likeliest reason for a massive pull back at the start of 2026. In 2022, I visited Meta’s research offices and saw their full body codec avatars and wrote that they were likely VR’s killer app. That Apple shipped Vision Pro with hyperrealistic avatars before Meta could ship anything like it at all suggests Apple agrees with me. Pretty much anytime Meta does layoffs it is in service of hiring more expensive people to do more expensive things elsewhere. So getting full-body hyper-realistic avatars to be “ubiquitous” after Apple set itself up for a multi-year lead here raises serious questions about exactly how Meta is able to compete in VR going forward. Would they seed the full body codec avatar technology in early access kits to influencers to hype it ahead of release?
Zuckerberg’s document should probably have ended here, but it doesn’t.
In order to achieve this vision, there are many different investments we’ll need to make. In key apps, we have no social app effort yet and our video effort is weak. We’re going to need to jumpstart both. In platform services, we’ve started building an identity, app store and payments with Oculus, but we’re years behind Valve and Google, and we haven’t even started on the avatar and content marketplace. In hardware and systems, we are leading in headsets, controllers and low level SDK for VR, but we don’t have a real development / graphics system and we’re far behind on AR.
This document is so old Facebook launched and killed several social and video efforts after this.
Over the next few years, we’re going to need to make major new investments in apps, platform services, development / graphics and AR. Some of these will be acquisitions and some can be built in house. If we try to build them all in house from scratch, then we risk that several will take too long or fail and put our overall strategy at serious risk. To derisk this, we should acquire some of these pieces from leading companies.
I can’t tell what any of this would mean to anyone. If you had read this paragraph back in 2015 when it was sent, it should have indicated periods of chaos, confusion and wasted effort were in the future for the company.
Given our own strengths, we will probably be best served building most apps and platform services internally while using acquisitions opportunistically, and then acquiring most of the core VR / AR and 3D tech where we have little experience. This is why I am supportive of acquiring Unity, expecting we will acquire an AR company in the next few years and opportunistically acquiring VR app teams, while also consistently encouraging us to ramp up our internal investment on our platform services ourselves.
They did acquire VR app teams but, without Unity coming into the fold, many of the words around that are functionally meaningless. In fact, the rest of the document is largely about the Unity acquisition strategy and how it would solve so many of Facebook’s structural problems in the space.
Since that acquisition never happened, the rest of the document is largely meaningless strategic confusion.