Is Facebook Inc (NASDAQ:FB) Winning Or Losing In Virtual Reality Space?

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Facebook Inc (NASDAQ:FB)’s CEO, Mark Zuckerberg has repeatedly said that he considers virtual reality to become a serious business opportunity in the next few years. To demonstrate his faith in VR industry, Zuckerberg led his company into the space through the more than $2 billion acquisition of Oculus VR, a maker of VR gears.

Recently, Facebook Inc (NASDAQ:FB) reached into its pockets again and forked out an unknown amount of money to purchase another VR-themed startup called Two Big Ears (TBE). The acquisition complements Oculus because while Oculus is focused mainly on the hardware side of VR, TBE is primarily focused on VR content. In particularly, TBE is a specialist in 3D gaming and cinematic experiences.

Attracting third-party VR developers

Following the acquisition, Facebook announced the launch of a platform that it calls 360 Spatial Workstation. The platform contains a range of VR-themed tools for content creation built by TBE. According to Facebook, third-party developers will be able to access the platform for free and download the tools they need to create VR content that can run on Oculus and possibly other VR systems.

Facebook Inc (NASDAQ:FB) has figured out that shortage of content threatens the growth of VR industry and it can be seen working to pave the way for a vibrant VR content industry. Therefore, the acquisition of TBE and the subsequent launch of 360 Spatial platform should enable Facebook to not only attract more VR developers to its ecosystem, but also provide them with tools to create exciting VR content.

Fueling Oculus sales

One area that Facebook stands to benefit from a vibrant VR content industry is in the increased sales of its line of Oculus Rift handsets. Accelerated uptake of Oculus Rift would also open up more monetization opportunity for Facebook in the VR space.

The other major area that Facebook Inc (NASDAQ:FB) is poised to gain with a rich portfolio of VR content is through the sale of VR-themed video advertising. A growing number of big brands including Coca-Cola Co (NYSE:KO) are finding VR-based advertising compelling to get their message out to customers. The rise of VR advertising could also accelerate the shift to video advertising spending from legacy TV to online platforms.

Neha Gupta

Neha Gupta has been in the financial space for over six years now. Gupta earned her MBA degree from Symbiosis Centre of Distance Learning in 2009 and her passion for finance led her to pursue Chartered Financial Analyst (CFA) course. She has successfully completed Level II of her CFA. She is a veteran in article writing, which is depicted in her numerous pieces published on SeekingAlpha, Nextiphonenews, InsiderMonkey, MarketWatch, and Techinsider. Her crisp and eloquent writing finds its best place in Researchcows, where emphasis is given on developing rich content for various websites, products, business plans, trainings, and book writing.

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