Facebook's VR push unlikely to be profitable in 2016

Despite the hoopla surrounding the much-hyped launch of the sell-out Oculus Rift, Facebook has conceded that may have to wait a while yet to see any return on its $2bn investment, after the firm admitted virtual reality will make no appreciable impact on revenues this year.

In a statement to analysts Facebook CFO David Wehner remarked: “VR will not have a material impact on revenue in 2016.”

Facebook founder Mark Zuckerberg isn’t too perturbed by an absence of immediate payback however, affirming that he had always viewed VR as a long-term bet, with big profits perhaps still some years off.

In the longer term Facebook is pinning its hopes its hopes on the sale of software and content as opposed to the headsets themselves, which it is selling at cost. Until that moment Facebook will focus on building a critical mass of users

The social media giant isn’t short of a bob or two however after it saw a tripling of first quarter profits from a year ago to $1.51bn, with advertising revenues now standing at $5.2bn courtesy of the continued rise of mobile, which now accounts for 80 per cent of the sector.

Join us, it's free.

Become a member to get access to:

  • Exclusive Content
  • Daily and specialised newsletters
  • Research and analysis

Join us, it’s free.

Want to read this article and others just like it? All you need to do is become a member of The Drum. Basic membership is quick, free and you will be able to receive daily news updates.