Facebook Social VR Head Rachel Franklin presents the company's new Facebook Spaces VR platform during the company's F8 developer's conference on April 18.

Published: April 19th, 2017

The Facebook Spaces virtual reality (VR) platform and AR (augmented reality) Studio software that the social media giant announced at yesterday’s F8 developers conference could provide large brands and small and medium-sized businesses alike with new revenue streams, if the company – and the partners who will ultimately use them – plays its cards right, analysts say.

Currently in beta, Facebook Spaces is the social network’s new VR world that invites users to interact with their friends in a variety of real-time animated and 360-degree photographed spaces using digital avatars; while the company’s AR platform can be used to add digital notes or artwork to real-world environments which can then be seen using a smartphone and, eventually, its Oculus headset.

Brian Blau, a VR and AR analyst with international consulting firm Gartner Inc., says there’s a reason Facebook CEO Mark Zuckerberg was most excited about the company’s new camera-based augmented reality features: Inspired by competitors such as Snap Inc., many of Facebook’s most popular apps among users now utilize the camera, he says, and if businesses want to reach those users, they’ll now find opportunities too.

Gartner analyst Brian Blau thinks Facebook’s push into virtual and augmented reality could prove a boon for businesses, but feels it’s too early to know for sure.

“The cool part about the the augmented reality piece is that it’s not just Facebook adding some twinkly, blinking lights that are going to appear on your face, but actually sharing an augmented reality content creation tool that developer can use to make whatever they want for any brand they choose,” he says.

“We’ve seen this before, with emoji, for example,” Blau continues. “It’s another way that brands can express themselves. So I think you’re going to see quite a proliferation of these types of face-mapped or scene-mapped graphics.”

More importantly, he notes, computer vision – that is, the algorithms designed to first recognize the elements of a picture, then map additional objects onto them, not to mention the cameras used to shoot the photographs in the first place – remains in its infancy, so the technology is only getting started.

VR is a different story, Blau says, noting that Facebook runs a separate conference for VR developers, Oculus Connect, that is likely to be held this fall.

“I think [Facebook Spaces] is interesting, because it’s seemingly counterintuitive,” he says. “You’re wearing a face-masking device and thinking, ‘that’s going to cut me off from the rest of the world,’ but what you see on the inside is pretty dynamic, and I think that when you share it with other friends, family, coworkers, it can have a lot of benefits in everything from entertainment to business.”

However, Blau warns, just because Spaces has the potential to take the already well-known virtual world concept to “another level” doesn’t mean it will succeed – a cautionary stance shared by Alan Lepofsky, vice-president and principal analyst at Silicon Valley-based Constellation Research Inc., and Michael Inouye, a principal analyst with New York City-based Allied Business Intelligence (ABI) Research.

The perils of VR

While Lepofsky says that VR will play a role in future collaborative spaces, by helping people engage with others across distances in a more realistic way, they have little in common with how most people experience Facebook today – through its News Feed and the one-on-one conversations with friends and businesses that remain the meat and potatoes of its mobile Messenger platform.

“The news feed does not represent the way we interact with people in the real world,” he notes. “Instead people walk in and out of conversations, move between different spaces, engage with different groups.”

Moreover, the barrier to entry for any virtual space must be low, Lepofsky says: once released to the public, the Spaces platform must be easy to set up, personalize, and maintain.

“Years ago, the reason Second Life did not take off is because the experience was more of a burden than a benefit,” he says.

ABI’s Inouye says that Facebook and the businesses who consider using its platform might want to consider the hardware they’re asking users to purchase, noting that while VR presently creates more revenue than AR, it relies heavily on hardware sales, which account for more than 60 per cent of its total. (AR hardware sales account for between 30 and 40 per cent of industry revenue.)

“AR has tremendous viral potential because it leverages mobile devices already in most end users’ pockets, with service availability in the home, public spaces, and workplaces,” he wrote in an email sent to ITBusiness.ca, noting that AR is forecast to surpass VR in total revenue opportunity by 2019.

Who watches the metaverse?

Facebook product manager of platform monetization Deb Liu imagines users leaving notes at cafés for their friends using the company’s new Camera Effects platform.

One other element worth mentioning is the role of privacy in this brave new world of alternate reality applications. As with Facebook today, Constellation’s Lepofsky says, there will be times users want to interact publicly and other times they will want their actions protected.

More importantly, it’s doubtful that Facebook will be this alternate reality’s only player – and the company has already come under fire more than once, alongside contemporaries such as Apple Inc., Google Inc., Microsoft Corp., and Twitter Inc., for not being vigilant enough about the user information it collects and the damaging sentiments that sometimes spread across its platform.

Gartner’s Blau chuckles at Facebook’s idealized vision of tags in the real world, noting that other AR software has invited users to tag real-world locations and it hasn’t always gone well.

“What are appropriate tags?” he asks. “Is Facebook going to be the moderator of their virtual world, if you will, and what does all that mean? There are a lot of open questions here that I don’t think anybody’s answered.

“I mean, that’s Facebook’s part of the world, but what about others?” he continues, citing Apple and Google as two players likely to eventually join what he calls the “metaverse.”

“Are others – potentially competitors – going to do the same thing?”

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