Facebook, one of the biggest brands in social media, recently released its earning remotes for the fourth quarter of 2020. According to the company, the revenue in the “Other” category was more than double the intake in the same quarter in 2019.
In 2019, Facebook gathered $346 million in non-advertising revenue, which increased to $885 million in 2020. The increase (around 156%) seems to come from a variety of factors. Not only is the Oculus Quest 2 more affordable than its predecessor, but it also comes with a more powerful processor, higher resolution display, and it’s generating more demand.
Zuckerberg himself claimed that the preorders for the Quest 2 were 5x higher than for the initial Quest.
A Rising Demand for Accessible VR
The reported numbers from Facebook make sense in the current landscape. With more people spending time at home over the last year, the market for games and at-home entertainment is stronger than ever. In 2020, the value of the games market went from $159.3 billion to $174.9 billion.
It’s not just avid consumers that are interested in the Quest either. Facebook believes that the Quest 2, with its fantastic processing power and better-quality visuals, will offer an easy entryway to all kinds of VR experience. This includes driving new collaboration and communication opportunities for businesses and teams in an increasingly remote environment.
Commenting on the financial results, Zuckerberg said that he’s spoken about long-term future goals for the company in the past and the impact it wants to have on virtual reality. However, according to Mark, this quarter’s output demonstrates that the future is already here.
Understanding the Facebook Earnings Report
The Oculus Quest 2 headset and its sales fall under the “Other” category for Facebook revenue. This segment contains all the things that Facebook does to make money outside of advertising.
Aside from the Oculus equipment, various miscellaneous payments and Portal hardware purchases also fall into the category. That means it’s hard to tell for certain how many units of the Oculus Quest 2 sold. Of course, the $539 million increase demonstrates a much stronger set of headset sales.
In Q4 of this year, Facebook still made 97% of its total revenue through advertising, down from around 99% in previous quarters. This could represent an exciting new direction for Facebook to move in, as it continues investing in new VR and AR experiences.
Zuckerberg told investors that the Quest 2 was one of the most exciting holiday gifts of the 2020 period, and that it’s also one of the things that he’s most excited about investing in as Facebook heads into 2021.
