#942: The Facebook vs Apple XR Battle – The Information’s Alex Heath on Facebook’s XR Hardware Bets


alex-heathAlex Heath reports on Facebook and their competitors for the subscription-only site The Information, and he’s been able to get some exclusive interviews and do some in-depth reporting on some of Facebook’s VR and AR hardware initiatives. As we’re on the cusp of Facebook Connect on Wednesday, September 16th, there are a lot of questions as to what other companies will be able to compete with Facebook’s current dominance in the consumer VR space, especially when it comes to their standalone VR headset of the Oculus Quest and the leaked videos of the Oculus Quest 2, which are expect to be announced tomorrow at Facebook Connect #`1 (which would have been called Oculus Connect 7 had Facebook not rebranded it).

Apple had an Apple Event on September 15th, 2020, but there wasn’t any XR news announced. Back on November 11, 2019, Heath and his colleagues reported on an internal October 2019 meeting where “Apple executives shared the company’s product roadmap for two augmented reality devices” including “Apple’s headset, code-named N301, will offer a hybrid of AR and VR capabilities” set for release in 2022 as well as Apple’s AR glasses code-named N421 set for release in 2023 that are “meant to be worn all day, and current prototypes look like high-priced sunglasses with thick frames that house the battery and chips, according to a person who has seen them.”

Apple seems to be the only other major tech conglomerate that will actively be battling Facebook in the consumer XR space, but we also talk about the other major players including Microsoft, Google. Qualcomm, Niantic, Amazon, Snap, Valve & HP + Microsoft, HTC, Magic Leap, NReal, and Tilt5.

But there is enough happening with Facebook that Heath can just focus on reporting on all of the many different dimensions of Facebook from their cryptocurrency plans, to their corporate news, as well as some of their XR hardware investments.

We also talk about some of the implications of how Mark Zuckerberg maintains a majority of voting shares to have unilateral control within Facebook, but also generally why Facebook and so many other major tech players expect that VR and AR represent a spatial computing paradigm shift in the next major computing platforms.

There aren’t a lot of other mainstream technology journalists who have been paying much attention to Facebook’s pioneering efforts in VR and AR, but the subscription-only business model of The Information allows him to go beyond the latest transgressions of Facebook’s social media network, such as this latest article from Buzzfeed on Facebook turning a blind eye to global political manipulation or the variety of issues covered in the The Social Dilemma documentary, which was recently released on Netflix on September 9th, 2020.


This is a listener-supported podcast through the Voices of VR Patreon.

Music: Fatality

Rough Transcript

[00:00:05.452] Kent Bye: The Voices of VR Podcast. Hello, my name is Kent Bye, and welcome to The Voices of VR Podcast. So Facebook's annual developer conference for Oculus used to be called Oculus Connect. It would have been Oculus Connect 7, but this year they've changed the branding over to Facebook Connect in order to cover the full breadth of everything that they do at Facebook Reality Labs. So that's going to be happening on Wednesday, September 16th, 2020. And ahead of that, I wanted to talk to the information's Alex Heath, who is a reporter who focuses specifically on Facebook as well as Facebook's competitors. So I had a chance to sit down and talk with Alex back on September 4th. And then the next week on September 8th, there's actually an announcement that Apple was going to be having an event the day before Facebook Connect on Tuesday, September 15th, 2020. I wanted to watch to see what Apple was going to announce, if they're going to announce anything. They didn't announce anything specific to AR VR. But as Alex talks about in this interview, Apple is working on different competing products with Facebook, both a combined AR VR headset that's perhaps a competitor to the standalone quest that Facebook is creating. And then also the pair of AR glasses that they're working on. Now for Apple, they're not targeting anything to be released until like 2022. That would be like their standalone AR VR headset. And then for the glasses that wouldn't be until 2023, Alex is reporting that Facebook essentially has the same timeline. So I wanted to wait to see if Apple announced anything they didn't. We'll see if Facebook announces anything tomorrow at Facebook Connect regarding what they're working on with What Alex has reported on the code name Stella, which would be their collaboration with Ray-Ban. It's the equivalent of a snap style glasses. And then the more fully fledged AR glasses, which is code named Orion. Each of those is launched for 2022 and 2023, at least according to the information reporting, as well as some of the reporting that Bloomberg did as well. So I wanted to sit down and talk to Alex Heath and just get a lay of the land of what's happening with Facebook and why he's been focusing on their AR VR hardware initiatives, which, you know, not a lot of other mainstream journalists have been covering it. So the information is a subscription based site, and he explains a little bit more of that context and why he's taken an interest on what Facebook is doing when it comes to their hardware initiatives. So that's what we're covering on today's episode of the voices of VR podcast. So this interview with Alex happened on Friday, September 4th, 2020. So with that, let's go ahead and dive right in.

[00:02:37.553] Alex Heath: My name is Alex Heath. I'm a reporter for the information. We're a subscription only tech and business publication headquartered in Silicon Valley. And I cover Facebook for us along with its competitors, which keeps me very busy.

[00:02:51.421] Kent Bye: So maybe you could give a bit more context as to your background and your journey into what you're doing now in terms of covering Facebook.

[00:02:58.460] Alex Heath: Sure, I've been covering tech for a long time, let's say eight or nine years in some kind of blogging journalism capacity. I've been at the information for about a year and a half. Other media jobs that were similar, I had previously in New York. I live in L.A. now actually. Gosh, yeah, I've been covering Facebook since pre Cambridge Analytica. So I've seen the company go through quite a bit. And I would say in the last few years, I've been particularly focused on their hardware efforts, as I've noticed them really ramping up their investments in AR and VR. And yeah, that's kind of how I've approached it. But I also I cover everything Facebook. So the corporate side, all the current controversy, you know, and all of the above, they have their fingers in a lot of different areas. So definitely no shortage of stories.

[00:03:50.885] Kent Bye: Yeah, well, as someone who's covering specifically the VR space, I don't cover like one company, I cover the entire industry. And actually, my method is to more talk to the developers and the creators. And so I think more of a bottom up oral historian approach rather than reporting on the top down what's happening from the companies. And I have a relationship with Facebook, and I've done interviews, but I've also found that recently they've are resistant to do more live on the record interviews. I used to have more access when it came to like Oculus, but when it comes to Facebook themselves, they seem to want to deal with text and written forms and they'll answer questions over email, but they're less likely to say, record on the record, someone talking about something. And I don't know if you've noticed that generally with Facebook as an entity, but it's hard for me to have a live conversation. I've had them in the past, but now that Oculus has been more and more consolidated into Facebook, they seem to be more risk adverse and talking to someone like me is pretty risky, I guess. Or I don't know if that's something that you've seen generally in terms of their strategy and how they deal with the press at large.

[00:05:00.123] Alex Heath: I would say to the contrary, they're actually very, almost over-engaged with the process from a corporate side. On the hardware ARBR side, I found them to be very engaged as well. It's interesting that you've had that experience. I wonder if it's because you're more of an expert than they're used to putting their people on with versus like someone who's more of a generalist or just happens to be covering AR or VR that day. That's an interesting observation. I mean, Oculus definitely has been consolidated within Facebook. It's really just a product arm of Facebook now rather than a separate company. It really hasn't even had a separate company feel for a long time. So yeah, that's an interesting observation that they've kind of stopped wanting to engage with you and kind of a more live dynamic.

[00:05:49.209] Kent Bye: Well, it could also be just that I have a lot of questions around privacy and other things that, you know, I have done interviews with them, but I'm also an independent journalist and you work for the information, which is a little bit more of a trade journal, I would say. And maybe you could just describe what the information is, because I've often clicked on links that I haven't been a subscriber up until the last week when I've subscribed to be able to read a lot of your articles.

[00:06:12.378] Alex Heath: Oh, thanks for subscribing. Uh, yeah, we're, we're, we have a pretty tough paywall. It's hard to get around and that's by design because we don't have ads and we are directly reader supported. And we believe that that's the best model for doing in-depth journalism that gets beyond the like clickbait and the overly sexy headlines and all that stuff that kind of plagues media today. So we really. pride ourselves on going deep and kind of doing the stories that no one else is doing. And we try to have a pretty high bar in that sense. We only do exclusive type stories, stories that you don't see elsewhere. And so that kind of informs how I think about the companies I cover because I'm not looking to do the millions. whatever the Facebook controversy of the day is story. I'd like to have something that's a little more distinct that people look to and maybe sites as the basis of their story. So we try to kind of help steer the conversation forward rather than just stay in the churn of the daily news cycle as best we can. And we're read by a lot of people in the tech industry and adjacent industries, executives, a lot of these companies. And yeah, that's, that's kind of our audience.

[00:07:23.574] Kent Bye: Well, so I've been to all six of the Oculus Connect starting back in 2014, and the Facebook Connect is coming up here in September. So I've been tracking what they've been doing for VR for a long time. And there has been some interest from the wider press, but I don't tend to see like a lot of Wall Street Journal or New York Times or LA Times or, you know, big name journalists that are even at some of these smaller events like Oculus Connect and soon to be Facebook Connect. And so if you look at their earnings reports, it seems to be like the hardware has been such a small part that it feels like a lot of the major press has just been kind of ignoring what Facebook has been doing when it comes to hardware. But this is something that you've picked up. And I don't know if you can speak to that generally in terms of this being a beat that you've been looking at. I've been covering closely for over six years now, but the wider press doesn't seem to be necessarily paying much attention to it.

[00:08:21.029] Alex Heath: Yeah. I mean, there's a sense where a lot of, especially like mainstream coverage is pretty late to new stuff like this, just because it needs to be something that a lot of people have heard about or journalists feel that a lot of people care about usually for like a CNN to write about it, for example. Whereas for us, we can really go pretty niche and pretty deep on certain topics and we can find an audience there that's willing to pay for that information because it's interesting enough to them. And I think for me and Facebook, if you get to know any of the like executive team at Facebook and the people who are kind of calling the shots, you realize that hardware is is a massive bet for them, that it's something that the CEO, Mark Zuckerberg, is very, very passionate about and involved in. And if I'm covering the company, I have to kind of be attuned to what they are focusing on internally and what they see as the next big thing. I'd rather do that almost than focus on what is the current problem or the current thing that's going well, because we're all going to forget about that in a month anyway. But if you can kind of stake your flag on like, You should be caring about this because in two or three years, these devices are going to be much more widespread, or at least the company thinks that. I think there's value in that. Just the more time I spend talking to really interesting, powerful people in Silicon Valley and in the tech industry, people who run these consumer tech companies, they all think that some version of AR and VR is going to be the next dominant computing platform. They all do. And I mean, maybe not all, but certainly a very large percentage of the decision makers do feel that way and they're investing that way. And so you can't ignore where all the bright minds are looking. Certainly there's a ton of skeptics, like I'm not saying there aren't. but I've found a surprising amount of people that are like, yeah, this is going to be huge. I think AR more than VR. Though I think Facebook thinks VR could be akin to the PC in terms of usage or game consoles. So you're talking low double-digit millions potentially at its max, whereas AR glasses, for example, could become mobile phones in terms of their ubiquity, which is hundreds of millions of devices. So I think what you're saying is like the early stages of the gold rush in Silicon Valley, where a lot of these companies are looking to what is going to come next after the mobile phone, which created Apple, which is the world's most valuable company now, thanks to the iPhone. And they're all like, what is next? And people think some form of compute and eyewear is next seems to be the consensus. So I think a lot of mainstream journalists just aren't there yet in terms of saying that as like, cause it's not coming anytime soon, right? Like we might get the first Apple headset in like two years and we might get glasses a year after that from Facebook and Apple. So until we get closer to that, I don't think you're going to see a lot of mainstream interest. And these devices have just been so just kind of focused on niche audiences, the gamer audience and stuff that you just haven't seen it percolate up to the big national outlets yet.

[00:11:30.880] Kent Bye: Yeah, well, one of the things that I've theorized in terms of a big motivating factor has been that Facebook has really been needing to interface with both Google with Android, as well as Apple with iOS. And so they haven't been able to be in complete control of their destiny because they don't have control of the hardware stack. And so Microsoft is kind of in a similar situation where their Windows phone never really took off. And so, you know, they had extra incentive to invest hundreds of millions and billions of dollars into augmented reality and virtual reality with a hollow lens. They're going down the enterprise industrial route with AR glasses. And you have Facebook that seems to be making the moves towards not only creating their own investments in augmented reality, virtual reality, but buying things like control labs to do neural interfaces, brain control interfaces, and potentially, as you report, some of their own silicon that they're making, and then potentially even their own operating system, because the Quest runs on Android, to be able to move away from their dependence on anything from any other company. They want to create their own tightly integrated stack, or what could potentially become a walled garden after that. But maybe you could just talk to that a little bit in terms of the fact that Maybe they kind of missed out on that mobile revolution, or they were a beneficiary of having one of the top apps. And now they want to have that investment into the hardware as we move into this next computing platform to really not have to be interfacing with any other company there.

[00:12:54.280] Alex Heath: Yeah, I think they've learned a lot from the mobile era and how they got boxed out of really being a substrate of the mobile era in the sense that Apple and Google are. And they have to play by Apple and Google's rules. You know, the Facebook mobile app is not, at the end of the day, distributed by Facebook, right? It's distributed by Apple and Google. And there's this really interesting power dynamic at play there and this like symbiotic relationship where they hate to love each other, basically, and they love to hate each other. And we're seeing that even now lately, if you follow any of the tech headlines, you see Facebook and Apple are kind of at it over App Store stuff. So this tension is always here while these companies have to rely on each other. And I think the reason Apple's worth over 2 trillion or whatever, and Facebook is still worth under a trillion, it's arguably because Apple owns the stack, right? And they control the platform. And if you control the platform, you are king. And I think Facebook wants to not repeat the mistakes of the past where they missed that. And it's the only rationale for why would you invest billions and billions of dollars for years when there's no sign that VR, especially right now, is going to become something that is really mainstream. I think it's definitely picking up. It's definitely moving out of a very, very niche audience, but I think we're still a long way away. I think everyone would agree from VR just being this normal thing that you pick a random group of friends and three out of five use VR regularly. I don't think we're anywhere near that stage. So why would a company like Facebook where they don't make any money off of hardware, why would they be investing billions and billions of dollars and designing their own operating system from scratch, which is a huge undertaking and has really only been done a few times in the history of technology, right? It's because they see this as such a huge potential, right? the next iPhone potentially. And Apple, by the way, it feels the same way. And Apple is very, very invested in this as well. And I think probably the most interesting business consumer tech story in the next five to 10 years is going to be Apple and Facebook trying to duke it out and figure out who's going to get the early market share when it counts for AR glasses. So it's definitely motivated by that. It's motivated by a desire to kind of control their own destiny.

[00:15:11.352] Kent Bye: Yeah, and there seems to be other competitors that are out there with Google and Apple. I mean, Bloomberg has reported that Apple has been working on both like a Quest competitor, as well as like AR Glasses. And Google has created a bunch of, you know, the Google Glass and then the Daydream, but that seems to be shuttered. And, you know, they seem to be focused on a lot of their ARCore and augmented reality integrations into their existing apps. But I haven't heard much in terms of what they're doing with hardware or if they're still really pushing forward. Microsoft seems to be pushing forward this enterprise play. And I suspect that with a big part of something like augmented reality, that you may need to have that enterprise level. But it seems like both Apple and Facebook seem to want to maybe skip that enterprise industry level and just kind of jump right to the mainstream for the augmented reality classes. I don't know. I feel it's risky in terms of just seeing how technology diffuses that it feels like what Apple is doing is that they may be in a position where they're able to really be grounded and really scaling it up organically, but they want to potentially take these billions of dollars and maybe they're subsidizing this on the back end. And there's an email from Mark Zuckerberg that was leaked from Blake Harris, who wrote history of the future. an email from Mark Zuckerberg written on like June 22nd, 2015. It was an ARVR strategy document that spells out how there's really three different layers. There's the app experience, the platform services, and then at the bottom level is the hardware. And in the strategy document, Zuckerberg says, Apple's been able to do the reverse. They've been able to focus first on the hardware, focus on the hardware, but Facebook wants to do the opposite, which is they're creating the apps and experiences on top of it. but they're also a platform provider, which means that sometimes they're creating the apps that are competing with the people that are on the platform. And so you have this weird tension between those two. But I guess just to look at the larger ecosystem and what's happening out there, what do you see what's also happening with Google, Apple, Microsoft, and the wildcard being Valve, which has been collaborating with both Microsoft and HP with HP Reverb, You know, and there's been some reports or rumors of valve potentially collaborating with apple. So yeah, I'm just wondering if you have any other additional information in terms of what's happening with the larger ecosystem with this.

[00:17:31.578] Alex Heath: Yeah. Yeah. I mean, we've actually done a lot of reporting on this and especially with apple, like you cited that Bloomberg report. And we had a story last year about a meeting where apple gathered a bunch of people working on its AR efforts, which is in and of itself, highly unusual. They try to keep people siloed. So people don't know the full story. So it doesn't leak. And they basically confirmed that they have a plan to debut this kind of mixed reality headset, ARVR, by 2022, and then a sleeker pair of fully AR glasses by 2023. Obviously, those dates could slip like they have in the past, but that's their timeline. Facebook has the same timeline for its AR glasses. It wants AR glasses by 2023. And so, you know, with Google, we have reported that Google's efforts aren't really that material right now. They have a few things they're tinkering away with, you know, like Google Glass lives on in some kind of weird enterprise kind of way. They may be toying with a consumer version. You know, they invested in Magic Leap. They got pretty burned there. They're definitely interested in the space. But I think what we could actually see is that the Android equivalent to, I guess, AR, whereas Android was the kind of more open mobile phone rival to Apple, could actually come from someone like Qualcomm or you know, one of these other hardware makers that is prioritizing AR chip development and kind of framework development. And it could be something random like a Niantic and a Qualcomm or something like that. You know, I actually, I'm not even sure that we will see this play out again where it's Apple and Google again. I think if Facebook had its way, it would be Facebook and Apple. They'd be the two dominant platforms, but I mean, Apple's going to give it everything they have. Yeah, I guess if you were to kind of like rank the companies, the big tech companies by seriousness, in terms of like consumer plays, it would probably be Apple and Facebook tied for first, sometimes going up and down. And then I guess Microsoft, I'm actually a little more fuzzy on what Microsoft's end game is, because they have so many other things going on. And I'm not sure if they see HoloLens as a consumer play in any too distant future or near future, but they certainly have the history, so they could. So you've got Microsoft in the mix, you have Google kind of a little farther down, we're not really sure. And then you've got the kind of interesting more peripheral players who will be very important players but may not own everything in this AR future, like a Qualcomm and a Niantic. And yeah, that's kind of how I see it right now. I think Amazon has aspirations as well, but I'm not really sure where they're at. We haven't heard of anything substantial with them on like AR, eyewear front, but it's certainly a thing that all of these big tech companies and their leadership are looking at, you know, something that's very top of mind as people, again, I keep coming back to this, but it's really about like what comes after the phone. And, you know, I don't think phones are going away. But once these devices get compelling enough, you know, I wear glasses, you wear glasses, why wouldn't we want supercharged glasses? And then the next phase is, are they good enough that people who don't wear glasses feel like they need to wear them, which is kind of akin to an even more extreme consumer shift than people realizing that they want to carry like little computer bricks in their pockets, which was kind of ludicrous until the iPhone came out, you know? So yeah, it's going to be very interesting. I think five years ahead as this all kind of like, we start to see the first devices come to market and like, it's going to be kind of like early iPhone days, you know, early adopters first, very expensive. And as the tech gets better, people start to feel like it's so compelling. And then who knows, like, I think, you know, people like Zuckerberg and Adam Spiegel and snaps another, you know, they want to be involved, but they don't really have the reach yet. But I think they have a unique approach. So Spiegel, Tim Cook, Zuckerberg, they all think this is going to be huge in like 10 years. So I think it's going to be probably the main tech business story eventually, you know, like once we get closer to these things coming out.

[00:21:31.603] Kent Bye: Yeah, I've been primarily focused on VR just because it's first and it's more fully better. But I also think there's a part where VR is maybe more private in the sense that you're more likely to do VR at home. I don't foresee people walking around in public with VR headsets. It's more of like when you're in public, maybe you're going to have an AR headset, but When you ask, would you be wanting to wear these glasses, you know, my hesitation would be that do I really want to be wearing cameras on my face and potentially wear these devices where I think the privacy aspect I think is going to be a big developing story on this issue and is something like these devices on our face, not only potentially providing risks to other people's privacy as we're walking around in public, but also our own privacy. And I know that it seems like you talked to Jenny Hall, which I've talked to before, one of the Facebook's privacy architects. Facebook's philosophy on privacy, I think, has issues. It doesn't actually have very much grounding when it comes to the philosophy of privacy of anybody who's an expert in privacy. They kind of make up their own definitions, or at least their definition of privacy is like whatever record you have control over. But I think that with the implications of the third party doctrine, and there's all sorts of issues when it comes to that, that I'm looking forward to at some point maybe getting a chance to interrogate them a little bit more intensely. But they did say in this latest announcement on their future products that they're really architecting from privacy from the ground up, which is an interesting claim, given that their business model of surveillance capitalism could be heavily subsidizing the hardware that they're releasing. It could be taking a loss of what it actually costs to produce these VR headsets, and then maybe potentially making up by gathering all this biometric data to be able to associate it to your Facebook identity and to be able to psychographically profile and serve ads in other contexts. and potentially eventually even in immersive contexts. But do you have any sense of if they're taking a loss of producing this hardware and if they are trying to subsidize it by these other advertising or methods of surveillance capitalism to be able to actually fund some of this, specifically Facebook?

[00:23:36.997] Alex Heath: Yeah. I mean, I think this is a very important topic and it's only going to get more important as these devices, you know, gain market share. I think you're right. That is their business model. And, you know, I kind of had hoped that, you know, we shouldn't rule anything out, right? Like this is still early. Maybe they do switch to this, but recent signs we've seen with like the forced merging accounts and stuff points to this not being the case. But what I had hoped was that if they have this opportunity to be a premium hardware company, and if they really want to be like Apple and be vertically integrated and build everything themselves and have the best device in the market on the merits of the technology itself, I'd hope that that would maybe give them an opportunity to have a new business model, especially with regards to like VR and AR in terms of you pay for what you get. And because you are paying us, we don't need to serve you ads. We don't need to plug you into our, the rest of our ecosystem. We've actually seen that they feel the opposite. They feel that this is crucial to their longterm data play. I mean, that's their DNA as a company, right? So it's Apple's DNA is the opposite. Apple doesn't have people who, have spent their whole careers figuring out how to collect and monetize data. They have people who've been doing that, trying to build amazing hardware. And so the DNA of these companies really gets shown in moments like these. And that's going to be a huge question for people is, you know, who do you feel has your best interests at heart? You know, these headsets cost money to make. I don't think Facebook is making a profit, like definitely not on a unit basis for these devices. And it's really more about kind of feeding the market. And, you know, everything is so behind in terms of criticism and in terms of public understanding of how tech works, just because it moves so fast. And I almost worry that we are just now starting to get to a place as a society where we're reckoning with the last 10 years of privacy and data collection on the internet, that we're just going to be finally collectively figuring that out and how to mitigate that in a proper way and protect ourselves. when this next platform is already here and it's already like gaining market share and it's going to be a whole new set of problems. And we're not, definitely not like legislatively. And I just think like collectively thinking about this enough because these devices aren't here yet really. Right. But like, if you think they are going to be here, that has huge implications. And so Facebook says that they're treating it very seriously. You know, they told me that this whole like merging accounts thing with the headset, with the Facebook accounts was, partly because they wanted to have more control over the privacy elements of the experience and the safety elements and to be able to like, I guess, control it that way. But I was skeptical. I mean, I wish that they could go more to like a more simple hardware model where it's just I pay for what I get, and you don't need to monetize my data after that. But that's just not their DNA as a company.

[00:26:34.378] Kent Bye: Well, just yesterday, Ars Technica had reported that there was like this GDPR complaint that was put forth by a German, I guess, oversight entity from Hamburg that was saying that there's some coupling rule within GDPR saying that you can't require someone to have an unuser license agreement to use a piece of hardware, but to have that conditionally connected to the collection of data in the sense that part of the GDPR's intention was to have people have the agency to be able to say, no, don't collect this data. And that. the fact that the potential future of these VR headsets being connected to that conditional statement of this privacy policy for Facebook actually has data privacy built in and there's no way to use the, well, there's still going to be ways, well, there's going to be certain features that you can't use on the existing hardware, but for all new hardware moving forward, there's going to be no option to even use the hardware without having that Facebook account. And it seems like that these European privacy regulations and GDPR and oversight, if there's gonna be anything that's gonna be on the front lines of that defense, they're, you know, at least five to 10 years, maybe 20 years ahead of where the US is in terms of legislating some of these issues around protecting the interests of privacy of the users. And so I'm not sure if that's something that you've cover or look at at all in terms of the reactions of like Oculus just announced that they had to take the Oculus and voluntarily stop selling it in Germany until they can resolve this. But it's kind of like the situation where moving forward, they are probably going to have more issues when it comes to meeting the regulatory obligations of Europe, but in the past, it seems like they've been a little bit more of like willing to just violate whatever these FTC consent decree orders are, and they just pay the fine because they can end up making more money on the data than they can from following these rules on privacy. And there's a pattern there of settling these lawsuits or paying the fine and continuing as business as usual. But I'm not sure if that's going to be sustainable in the long run if they keep having that type of regulatory impulse when it comes from the European Union and the GDPR.

[00:28:37.828] Alex Heath: Yeah, I mean, I agree. I think Europe is much more strong here. And like we saw with them having to stop sales in Germany, there's clearly issues there. I think this all speaks to like, also in my mind, like, what are you providing? Like, if you think Oculus, you think VR represents a platform? Do you think it represents something to build upon, like your PC or your Mac, right? I would prefer for it to be an open platform. Facebook would have preferred for Apple to be an open platform. They would have probably done even better if Apple didn't have such stringent control. They are taking the Apple approach, which is an almost even more intense way where they're forcing this account stuff. It shows where their headspace is at. It shows like they want to control every aspect of this environment and not have it be more of an open platform where developers can build whole entire economies and businesses on top of it. I'm sure some will, that'll still happen, but it definitely shows kind of how they view it. Whereas like when I set up an Apple device, I don't know if you need an iCloud account anymore or not actually. I know for a while you didn't need like any kind of online account to get into your device. Maybe you do now, but I don't think so.

[00:29:51.433] Kent Bye: I just set up the iPhone recently. I don't think you need to.

[00:29:54.816] Alex Heath: Yeah. And that's kind of more like if you have a platform and you think the value is the platform, which is like. There was some Bill Gates quote that was actually mentioned recently by Facebook's former head of growth, I think, Chamath Palihapitiya, but it was like Bill Gates was saying a platform is when the accrued value from the platform exceeds the value of the platform itself. It's essentially like when you are creating so much value through the existence of your platform that the economy of it is bigger than the value of your platform. That's a true platform. And Facebook seemed to be approaching it differently. And I don't know how that's going to play out. Maybe they get pushback and as VR really takes off and AR takes off, they realize like there's more value in having it be more open. I don't know. I think it's really interesting to see them criticize Apple and criticize the App Store and the 30% and the control and all of this when they're doing the exact same thing in VR. And just because it's a smaller market and people don't notice it, but I mean, they're literally doing the exact same kind of things.

[00:30:54.358] Kent Bye: Well, yeah, I saw there's a few articles that you had written covering this lawsuit from Epic Games versus Apple, as well as Google. But Epic is trying to make the claim of the Sherman Act of 1890 is creating this antitrust, anti-competitive environment. And I'm not sure if you've looked at the legal arguments, if you think there's a valid argument there, because whatever happens in this case may help set the context for what happens in the future. Because when I talked to Chris Pruitt, the head of the content ecosystem, he's essentially said, yeah, we're modeling this exactly after the Apple store model. So we're creating this future of the computing platform being this tightly controlled thing where anything that is published is going to have to go through the payment system and everything. And that there's no ability to have competing stores or competing payment systems. And so you have this functional monopoly, but yet that platform wouldn't exist unless they spent billions of dollars to create it. So are they justified and be able to have that as a business decision? Or is that creating some sort of antitrust according to the Sherman act of 1890? Yeah.

[00:31:54.862] Alex Heath: I mean, I'm definitely not a legal expert on this, but my limited knowledge tells me that you have to define monopoly first. And like, can you legally make the argument that Apple has a monopoly on its own platform and you got to start there and, That seems kind of shaky, you know, like companies don't have a duty to deal with third parties, especially in the U.S. So like Apple doesn't need to open its platform up legally. So I guess it's more establishing that they do have a monopoly, that they've abused said monopoly to either restrict pricing, which is kind of the most common way that antitrust is approached in the U.S. It's a little more loose in Europe. So I think maybe what happens is we see concessions from Apple. We see some kind of, Mac-type side loading allowed, where if you notice over the last several years, Mac apps have become a little more under Apple's control. There's Gatekeeper, Apple has to sign apps, you have to opt into getting apps that aren't signed by Apple. So maybe they go that way, like maybe they start to open iOS up a little bit, but it's still more tightly controlled, but at least a little open. I don't think you're going to see the whole thing broken open or 30% gone or anything like that. I mean, I think Apple has plenty of legal grounding. They've actually had cases like this that have been rolled on Apple's favor in the past. So I don't know. It's going to be really interesting to watch. I think Facebook and all these other players that are trying to play more in AR and VR are watching to see kind of how it shakes out. I don't know, man. I think we're seeing the sins of the past, or however you want to phrase it, repeated all over again in VR. We've seen that recently with the complaints about Oculus and how Facebook policies are. I don't know, man. It's a fascinating time to watch all this unfold. This lawsuit with Apple, I think, is just going to show where the winds are headed.

[00:33:45.696] Kent Bye: There was a report at the beginning of 2019 at the shareholder meeting for Facebook, Vanity Fair had reported that with all the different shares and types of shares that Mark Zuckerberg owns within Facebook, he essentially has like 58% voting power, which means that no matter whatever the shareholders vote, he can basically overrule it. So I don't know if you can comment on that in terms of like, if that's a unique situation where one person is able to essentially have complete and total control and why Facebook says that's okay. And what the downside to that is to not be able to have the feedback mechanism from the shareholders in that capacity.

[00:34:24.205] Alex Heath: Yeah, I mean, that's a fascinating topic. Yeah, it's not unique in Silicon Valley. The structure was actually one really popularized by Google in the late nineties. They were the first of their kind to come out and say, we're going public and you have no voting power. Our founders are going to keep all the voting power. Mark then modeled Facebook after that and actually even went a step further in terms of how he's kind of solidified power. Apple, because jobs passed and it has a new CEO who's not the founder, and just also because of its share structure and it was built in an earlier time, doesn't have that model. So Tim Cook is accountable to his board and the shareholders in a way that Mark is not. Mark could fire his entire board tomorrow and they'd have no say. He is the chairman of the board and the CEO. So, It means he has unilateral decision-making power over everything at Facebook. I mean, to a degree, right? He could do something that's so controversial that he loses the support of his executive team or what have you, or there's lawsuits, you know, that has happened to a degree in certain cases. And Snap has this to an even greater degree. Evan Spiegel's controls like more shares than Mark does on a percentage basis. So, you know, these founders and the people who surround them say that this rewards long-term thinking. If a founder isn't beholden to the whims of maybe more short-term interested shareholders, they can make bets that will pay off longer term because the street is so tied to quarterly performance. And I think even now with Facebook being what, a $700 billion company, 50,000 employees, they do move a lot faster than they would if they weren't unilaterally controlled by Mark. I can say that unequivocally. I mean, I also have covered Google and you talk to anyone who works in Google, they just move way slower, even though the founders are controlling shareholders, they're not really involved day to day. So it's more bureaucratic. And it allows Facebook to make really big bets very quickly, like buying WhatsApp for $24 billion or buying Oculus. So seeing both sides, I mean, I kind of wish that someone that was as powerful as Mark had more external forced accountability, especially if they're going to invent the next computing platform. But unfortunately, right now, from a governance perspective, there's nothing that we can do about it. But it definitely creates blind spots too, because it creates this halo effect where the closer you are to the person with power, the more you're inclined to be a yes man, because there is no other power. So I can see both sides too, which I guess is the journalist answer, but yeah.

[00:37:06.539] Kent Bye: Well, I guess my concern is that it feels like Facebook is a company, they're publicly traded, but at the same time, they're involved with 2.7 billion people around the world. And so the policies that are set forth are actually impacting people around the world. And there's a bit of a unilateral decision making that feels like they're becoming more powerful than a lot of governments, but yet less oversight and less democratic say of like, there's no algorithmic transparency. What are the ways in which people can like vote on this from a privacy perspective? It's like, there's all sorts of ways in which that they could be gathering de-identified data. They could be tracking our biometrics or galvanic skin response at some point, they're going to be able to literally read our thoughts. with brain control interfacing and speech synthesis with externalized EEG within the next five to 10 years. I mean, UCSF has done demonstrations with ECOG, which is invasive to be able to actually put nodes on the brain to synthesize your thoughts. So with brain control interfaces, within the next five to 10 years, they're gonna be able to have a device that reads your mind. And so Facebook is gonna have the capacity to know what you're thinking. And that level of control just seems like without any sort of checks and balances, I don't know, I just have concerns that we're moving towards this dystopic big brother situation where one entity is too big and has too much power without any checks and balances.

[00:38:33.330] Alex Heath: Yeah. And I mean, perhaps we get meaningful regulation before that metaverse kind of concept actually takes root in our world, right? Like there's definitely more of a groundswell here in the U S and in government to regulate these companies, Facebook in particular, you know, and maybe that's the answer. Maybe introduce more competition and people have more choices and, and that helps. But yeah, it's definitely scary. I mean, you know, I may say like, yeah, we are inventing this technology, but we're going to put guardrails here. We're going to do guardrails here. And you can believe that Facebook has a history of either ignoring or abusing guardrails and there's fines to prove it. So, you know, maybe people will just vote with their wallets, like hopefully, right. Like in a free market society, that's what you hope. So, You know, if you care about privacy and you care about your data not being used, you buy Apple. And if you want a cheaper device that also has all these social features, then you buy Facebook. And if you don't care, then you don't care, right? But like, hopefully people have enough choice, right? Is the hope.

[00:39:43.561] Kent Bye: Well, just within the last two or three days, they've announced on October 1st, 2020, and Section 3.2 of their Terms of Service is going to be updated to include the statement, we can also remove or restrict access to your content, services, or information if we determine that doing so is reasonably necessary to avoid or mitigate adverse legal or regulatory impacts to Facebook. Now, I don't know if that means that if I start saying, Hey, we should regulate Facebook, if that means they can delete that piece of content, the way that's worded, it sounds like that, but I don't know exactly what that means, but it seems to imply maybe there's other things that are just illegal, but that, that seems like that would already be potentially included. So I don't know if you have a read of what that means.

[00:40:29.191] Alex Heath: Yeah. I mean, it's actually a common misconception. Facebook could delete whatever it wants. I mean, it can do whatever it wants to any of your content, you know, within the bounds of a policy agreement you agree to, right? Like there's that sense of like that handshake that happens with in terms of service, but they're within their grounds to remove content for whatever reason they feel is appropriate. You know, that's kind of how laws have been set up in the US for private companies. I think that particular notice is probably more about covering themselves from lawsuits and stuff, because we're seeing an increasing wave of authoritarianism around the world, and governments that want to control speech, and Facebook operates in a lot of these countries, China notwithstanding. And they have to follow the laws in the countries that they work in. And so that means maybe they're projecting that they're going to have to start doing more censorship because they're being asked to. And I think it's probably more about that than anything else. But yeah, those are very ominous terms of service update. The only reason we all know that is they're legally bound to disclose very upfront what their changes are to that because of past settlements. Otherwise, we wouldn't have even probably known that they were slipping that in.

[00:41:41.726] Kent Bye: So are you going to be covering Oculus connect at all? Are you going to be trying to, I'm sorry, I keep calling it Oculus connect Facebook connect. Yeah.

[00:41:51.294] Alex Heath: Yeah, I am. I am. Yes, I am not much I can talk about yet, but yeah, I think it'll be a really interesting presentation and they're making a lot of bets in the space, right? Like whether it pans out or not, I think, I think it'll be an interesting one this year. Just put it that way.

[00:42:09.369] Kent Bye: Hmm. Well, for you, what do you see as the most exalted potential for what VR and all these immersive technologies might be able to enable?

[00:42:19.381] Alex Heath: I think once we get like the hardware to a place where it doesn't hurt your face and it doesn't give you sickness. It's like, why would you not want to work in a VR world, you know, that has all this freedom, you know, workspace freedom, like windows, feeling a presence with people, conference calls, etc. Once that gets good enough, I think it'll be really compelling. You know, I interviewed Michael Abrash, who's Facebook's kind of chief scientist on all this stuff late last year. And he was saying he sees the VR trajectory being like the PC in terms of becoming more of a work device for people, as well as gaming, but that he's kind of seeing it following more of the PC route in terms of usage. And I believe that. I think once the technology gets good enough, that will happen slowly. So that's kind of where I see VR. And then AR, I think will potentially be more ubiquitous in terms of like a utility for just everyday communication and navigating the world and understanding the world. But I think VR holds tremendous, even in the last couple of years, how good the devices have gotten. Tremendous potential in terms of like immersive sensory required experiences where I really want to like be in depth on something and I go in VR and get it done. But the device is just still, man, they're just, they don't work for longterm usage. So until that's cracked, I think VR is going to be artificially limited and what people want to do now.

[00:43:44.705] Kent Bye: Yeah, and you reported that Mark Zuckerberg had a conversation with Andrew Bosworth, also known as Boz, in June of 2017, and that starting in August 2017, Boz started to be in charge of all of this hardware. And he used to run the ads and the newsfeed. And so it seems to be a different strategy in terms of buying up game companies and trying to acquire different AR device displays. And so what can you say in terms of what's happening once Boz took over, what kind of shifted in terms of maybe trying to consolidate and focus on just gaming and certain specific industry verticals, but to really kind of double down and build out what they're doing in this whole space?

[00:44:23.849] Alex Heath: Yeah, I mean, I think they've gotten more serious. I think the organization has got a lot more investment and headcount. There's thousands of people working on AR VR spend billions of dollars on that annually. And I think what he did was kind of consolidate all the efforts under an umbrella. And as we saw even recently with reorg, they did again and the rebranding, like it's Facebook reality labs, Facebook, everything. And then there's product arms underneath. And this is analogous to what they're doing at the corporate level with Instagram and WhatsApp. They're all kind of just a giant consolidation that's happening. And that allows them to hopefully like work together better. And like, they're not be like, teams that aren't communicating. So he's kind of trying to figure out all the building blocks for this AR future, right? Like we need an AI assistant, we need some kind of input mechanism, that's BCI, that's mind reading, essentially, hand tracking, we need all the hardware, we need the silicone, we need the OS, like there's all these puzzle pieces that have to be put together for this kind of vision to become a reality. And that's the stage they're in is kind of building the puzzle. And Apple's doing the same thing. So it's a race.

[00:45:31.659] Kent Bye: Have you tried out any VR? Do you? Oh, yeah.

[00:45:34.379] Alex Heath: Yeah. Yeah, I have the quest. And I've tried the rest. I mean, I've tried pretty much all of them. And again, I can't use them for their cool demos. But like, that's still kind of what it is to me. It's like they're increasingly impressive demos. But until the comfort is figured out, I can't be in it for more than 30 minutes. I just my neck hurts, my face hurts. And that's kind of the same for people that I let try it. So that's kind of the hurdle I see that needs to be overcome.

[00:46:03.395] Kent Bye: I see. Yeah, I think it's dependent. I've definitely heard the same. I've maybe I've have a tolerance that I've built up. I can spend longer, but you have to be our face tolerance. Yeah, more. Actually, I think at the very beginning of when I started VR, I actually would get a lot more susceptible to any motion sickness. So I do think that I have cultivated some degree of VR legs because it doesn't make me as like eye strain or get me motion sick as much. And so I do think there is a certain amount of your brain adapting to the different stimuli that happens, but it's also, there's good VR design that could be done so that you don't have to force people to have to like have their VR legs to be able to have a good experience. So yeah, I think it's, having a good design experience, but also building up whatever your tolerance might be. So yeah, just to kind of wrap things up here, what do you see as like the biggest open questions that you're kind of tracking down right now?

[00:46:53.899] Alex Heath: Well, I had hoped that AR and VR weren't going to be just dominated by the existing incumbents in tech. And that increasingly looks like what's happening. It looks like the bigger independent players, the Magic Leaps are all kind of struggling. to find their way. They all bet too early. And what seems like is happening is the incumbents are going to invent this next platform. And I was really hoping that we were going to have the next Apple come in and get to reset expectations and do things that the incumbents can't and really be bold. And it doesn't look like that's going to happen. I just don't see any... Some startups are getting funding, but I don't see any really strong indie players anymore, especially on the hardware side that are doing like very strong consumer plays. There's like in real and China and there's a couple, but I just, and even on the VR side, I just don't see that happening. I think we're going to be down, but it's going to be like the fang stocks are getting to just because of their sheer might and wealth are getting to basically invent this next era because of how they benefited from the last one. And so a big question is, will someone come along? Will some third player, indie player come along and just be able to be a strong player in this future? And I hope that's the case. That would make for a more exciting market and a more exciting story, but I'm still kind of on the lookout for that.

[00:48:19.292] Kent Bye: Yeah, the two wildcards I would throw out there would be Valve and what Valve does, although they've been more focused on the high-end consumer PC VR. They've been collaborating with Microsoft and HP and rumored to potentially be working with Apple in some capacity. But also Microsoft slash Qualcomm have both put forth like open source design specs. But again, to really pull that off, the Windows Mixed Reality hasn't necessarily taken off to the degree to really be a viable player. Although I will be curious to see how the collaboration between HP and Microsoft and Valve with HP Reverb will be kind of like this weird independent company mixed with two big players and see if you see more of those little factions that start to come together to make up some consumer plays. So for me, that's the biggest wild card when it comes at least to the VR space. AR, like you said, doesn't seem like it's very likely, but Valve is somebody that I'm just curious and they're very secretive and private, but they seem to be a wild card here for having a lot of money and at least the will to be able to make a lot of big innovations in the VR space. So, and there's Tilt 5 with Jerry Ellsworth that has, again, that very niche AR that's going to be for very specific use case, but maybe starting there where it's very limited and not necessarily trying to do everything, but people that are trying to play games with their friends or something like that. So. I'd say top five and Val would be the ones that I would be keeping an eye on. So. Cool. Also, is there anything else that's left unsaid that you'd like to say to the immersive community?

[00:49:45.480] Alex Heath: No, just I'm Alex at the information.com email. My Twitter's Alex E Heath. I would love to talk to more people that work in this space and hear your stories and things you think should be reported that aren't getting the attention that they deserve. So please do reach out.

[00:50:02.677] Kent Bye: Awesome. Well, Alex, thanks for joining me here and give me a little bit more of the inside scoop of what's happening in the larger XR industry of Facebook and all their competitors. And, uh, yeah, thanks for coming on the podcast and, uh, sharing all your information. So thank you. Thanks for having me. It was really fun. So that was Alex Heath. He's a technology reporter covering Facebook for the information. So I have a number of different takeaways about this interview is that first of all, well, uh, just the fact that the information is a subscription site, which means that they're able to cover a lot of these different stories about what's happening within the tech industry. That's a pretty hefty subscription fee. I think it's like $59 per month. I did it just for this month to be able to read these articles and do this interview, but I'm not sure if I'm going to maintain that subscription just because It does cost quite a bit. But that said, they do do a lot of in-depth reporting about what's happening, and they've had stuff about what's happening in the AR industry that I hadn't seen anywhere else. There was the Bloomberg report that came out in June of 2020, but a lot of that information had already been reported by the information all the way back from November 11th of 2019. So the report that Alex is talking about was this October of 2019 meeting that happened at Apple where they were talking about their long-term strategy with the N301 which is the equivalent of their AR VR headset It's what I presume to be somewhat of a quest competitor not having much information about it, though I don't know for sure and it's a little confusing how it's both an AR and VR device But that's what has been reported at least And then there's the AR glasses that Apple is working on, which is scheduled for like 2023. So 2022, 2023, and Alex reports that Facebook essentially has the same timeline. So we'll see tomorrow at Facebook Connect whether or not they're gonna announce any of that information. Apple is supposed to have another event because their iPhone has been delayed. And so they're gonna be having another event talking about iPhone, and then they may also be announcing some of the stuff that they're working on as well. Because the bottom line is that when looking at what's happening in the ecosystem, there isn't a lot of competitors that are stepping up to really go head to head against Facebook. It was leaked by Facebook themselves accidentally that the Oculus Quest 2 is going to be coming out and announced during Facebook Connect. And so we know some of the specs and details about that. And all the other players and competitors aren't necessarily stepping up and getting something on the market right now. Apple seems to be more interested in AR. Tim Cook has actively spoken out against VR. And I think in some ways, Facebook is being able to iterate and actually get the developer ecosystem to really build up the content libraries. And so I really wonder if Apple is going to be able to just swoop in out of nowhere and be able to start to compete at some of the same level of what Facebook has been doing. especially if they're skipping over that step of doing anything in VR. And Microsoft's taking that enterprise route. Will they be able to pivot into translating what they've been building with the HoloLens into a consumer product and to really push on that? We'll see. I mean, I think right now they have the best AR headset that's out there of anybody else that's out there. I haven't seen any of the prototypes or anything else that both Facebook or Apple has been working on, but they've been getting it into the field and iterating and working with enterprises and I expect that something like the early iterations of the HoloLens have to be more of an enterprise scale because it's just the cost and everything else that they had to do in order to pull that off is at a price point that's just not affordable. And we can look to see what happens magically with their price point of $2,300, but with all the other additional stuff that you have to get, it ends up being around $3,000 as well. That's just too high for what consumers are able and willing to be able to spend. But also that was interesting to hear Alex talk about Qualcomm as like this dark horse in some ways because they're building all these chips Has done some reporting saying that Facebook is investigating looking into developing their own silicon whether or not they do that and go down that route or whether or not they just continue to rely upon the XR series chips from Qualcomm and to be able to use the cutting edge that they're building because Qualcomm is trying to create these platforms and create these chips from all these other devices that are out there and so I When Facebook's Oculus Quest first launched, it was using a Snapdragon 835, which was launched back in 2016. The XR2, which was in the leak of the Facebook release of Oculus Quest 2, was saying that that's going to be the XR2, which was announced and released December of 2019. So it's a number of generations more updated. But will Facebook continue to work with Qualcomm? Will Qualcomm try to develop their own headset? They've certainly created reference backed hardware that other folks can take and start to build out. But I haven't seen anybody really pick that up and start to really produce it on mass scale that is going to match the same level of quality. Having the hardware is one thing, but having the software is a whole other deal. And without that software ecosystem and everything to run it without that operating system and everything else, then that's just like a lot to expect of any independent company. We're seeing what happened with Magic Leap and we'll see if they're able to make a real viable enterprise play. And Tilt 5 is another dark horse in terms of what they're doing, trying to really focus specifically on very small niche tabletop gaming contexts, but a small indie player. I wouldn't put them in the same realm of any of these big major tech corps. And Valve also is a dark horse in terms of their collaboration with Microsoft and HP. So we'll see if there's any collaboration of adding up all those different technologies to do something that's more standalone since Windows Mixed Reality is doing a little bit more of that standalone computer vision and all that other development that they've been working on. So that would make sense if they came out with a collaboration between those three entities as well, which I think is interesting to see these collaborations from these both big companies and independent companies to be able to come up with some sort of viable competition. And then Niantic he mentioned is a little dark horse. Google just seems to be a little bit AWOL in terms of producing new hardware. They've continued to, I guess, innovate on the software side on the Android platform, but haven't seen much material evidence is what Alex said of what Google is doing. They didn't actually buy North. I didn't mention that in this conversation, but they have done a number of different acquisitions that are AR glasses related and they have the Google Glass which is trying to have a little bit more of enterprise application. So we'll see where that ends up and whether or not Google is going to start to come back into making different hardware plays since the Daydream kind of fizzled out and never really took off. Amazon, whether or not they have any aspirations, there's not been any material evidence for them as well. Yeah. And just generally the mainstream coverage on this issue is pretty late. Alex says that it's probably going to take until they come out with some sort of consumer product at AR scale level. That's going to be a mass consumer product before some of the other tech journalists and journalists from other newspapers start to cover it. We'll see what kind of coverage comes out of Facebook connect, but typically haven't seen a lot of attention paid to what's happening at these developer conferences. But now that it's Facebook connect, maybe they'll get a little bit more attention from other mainstream press. And talking to the different executive teams at Facebook, Alex says Facebook sees that this is a massive bet that they're taking on hardware and that they're told to believe that this is going to be the next competing platform. And that as he talks to lots of different powerful people who are in decision-making positions within Silicon Valley, they're seeing that AR and VR is like the next computing platform and that there's a lot of strategic things that are happening within all these different companies to prepare for this paradigm shift from 2D to 3D, which from my perspective, I've been seeing and hearing that from Alex and other reporters to see that, okay, this is a thing that really does seem to be like a potential pathway to where things are all going. And yeah, because Facebook didn't have their own mobile platform, then they really got boxed out of being an underlying substrate of the mobile ecosystem is what Alex says. And so they're very interested in not having that happen again, and maybe even developing their own operating system, which he said is extremely rare. I'd be very curious to see where that goes, if they're using some existing Linux fork, or if they're developing literally from scratch their own operating system to do spatial computing. It was rumored, I guess, online, people speculating a bit, have they developed their own game engine? Back last year, as History of the Future was coming out, there was a memo that was written by Mark Zuckerberg on June 22nd, 2015. That was their AR VR strategy document. And in that document, he talks quite a bit about the potential of buying Unity and Within the last couple of weeks, Unity has announced that they're going to be having their IPO. So they're going public. So clearly they're not going to be bought out by Facebook. They resisted all sorts of different attempts to be able to buy them out. And so it's highly, highly likely that Facebook has gone off and developed their own game engine and a lot of stuff that they're building and releasing. That could be one of the reasons why some of their previous social VR initiatives were little experiments and they rolled back. They didn't really ever take off. Maybe they've developed their own engine to be able to run all these different experiences. As I launch into venues, I start to see that there's some custom loading screens that I haven't seen in any other platform. So I expect that they've developed their own engine to be able to run a lot of different stuff. So they're trying to control the stack from the silicon all the way up to the operating system and all the experiences. And so I'd expect that they're trying to really tightly integrate everything. And whether or not they're going to develop their own chips or continue to rely on Qualcomm, that's a bit of an open question. One interesting point is that Alex said, you know, we're about 10 years behind trying to reckon with some of the implications of social media and a lot of these networks at scale and what's that mean for the fabric of society. And that we're just now starting to wrap our minds around that. And as we start to try to deal with that, then we're moving on to the next compute platform where there's an entire new issues that are being brought up. And it's going to take even more time to see what kind of risks and harms that can be done there and what needs to be done, maybe a regulatory level or from a market competition level, to see whether or not we need to have some sort of checks and balances when it comes to some of the unintended consequences of where all this is going. We already see a lot of that. There's an amazing documentary called The Social Dilemma, which has a lot of documentary elements, some more contrived narrative conceits to try to describe the different dynamics. But I think it explains a lot of the different issues that I think the social media platforms have. And, you know, it doesn't necessarily get into any solutions with data sovereignty or self-sovereign identity or GDPR or anything like that in terms of trying to curtail some of the impacts of surveillance capitalism. But there's certainly a lot of other risks to the functioning fabric of society that Facebook at the social media side has that we're still trying to reckon with. And the documentary, The Social Dilemma, I'd recommend folks just checking out because there's a lot of open questions for how to reign this in to some way. We want to have this free expression of the technology, but we also don't want to have a computer network with 2.7 billion people that makes it attractive for nation states to be able to use the tools that are made available to further and accelerate different polarization within society and try to disrupt the underlying fabric of democracy. So there's a lot of big issues there that I think the social dilemma starts to handle. I'm talking about a little bit here on the podcast, but that documentary does a real big deep dive on that and the work of Tristan Harris, which I featured on the podcast here last year. Two last points is that it was interesting to hear Alex say that it is not a unique situation for Mark Zuckerberg to be a majority shareholder and to have like unilateral control of the company that was pioneered by the founders of Google. And then Evan Spiegel of Snap has also followed that. Apple doesn't follow that. Microsoft and other companies, Google doesn't. have that at a day-to-day operating level. And so that's a little bit more slower and bureaucratic. So the trade-off is that Facebook is able to perhaps make these unilateral decisions to make a big bet on AR and VR. And even if it's not going to have any short-term payback for their quarterly reports, that they're going to still be committed to investing all this money because it's just a matter of time before there's a platform shift from the mobile phones into the spatial computing with AR or VR, you know, generally just this XR spatial computing paradigm shift. And they're able to make a lot of strategic decisions that maybe the investors wouldn't necessarily be fully ramped up on to be able to read the tea leaves for where the technology trends are heading in the future. The downside is that there's very little independent accountability to anything that Mark Zuckerberg does as the unilateral benevolent or not so benevolent dictator of Facebook which he has access to 2.7 billion people in the world and so there's one person who can control the destiny what the algorithms are doing to modulate people's experiences for around the world that's quite a lot of responsibility and I think some would argue too much responsibility Section 230 of the Communications Decency Act here in the United States is what has created this liability shield for this situation to even exist. There's been a lot of debate around that as to whether or not that needs to be reconsidered. But yeah, just what does it mean to have a network that is that large and what kind of new risks and harms come from that? So that's a lot of open questions on that side. But the deeper question for me is as individual, like Mark Zuckerberg, who has that much control and power, and what's that mean for the checks and balances for people that are around them to be able to maybe stand up to them. Or, you know, what Alex said is that when you have that situation, you tend to cultivate this environment of having a lot of yes men around you, because if someone could basically fire the entire board and do whatever they want, regardless, then. there's not a lot of incentive there to really stand up and to question some of these assumptions. So I think the lack of diversity, lack of accountability, lack of transparency, what is the infrastructure that we have moving forward? Do we want to have this technocracy where we have these companies that are essentially functioning as the governments and that there's no democratic say, and that we have this benevolent dictator model, which, you know, has happened in open source, but in this case, it's more of a unilateral totalitarian control over so much aspects of society. And I think the risks and harms is that there's so much that's happening around the world that they really don't have the regional expertise in all the different realms that they're operating. And so what's it mean to have this unified communications network? It's already there with the internet. So whatever you do to address Facebook as an issue, then what's to prevent it from coming up and popping up again? I mean, these are why it's such an intractable problem, because if you just focus just on Facebook, then what's the deeper way that you try to organize that? Is that more regional control over what's happening with those networks? been this whole jumping through the hoops of what's happening with TikTok and being owned by China and just in the United States have like a regional control of the systems and the operations that are happening for TikTok in the United States. And Oracle got that gig and that deal that was just signed last week. And so there's a little bit of should that happen and all over the countries around the world of having like regional intermediaries to the technology companies. Do we need something like that to have these different firewalls or is just all jumping through hoops and is that going to not really functionally change the way that things are operating? And the final point that I just say is that, you know, as journalists, as we cover this, in the absence of having any strong regulatory impulse for how to actually control or have some of these different checks and balances, we're kind of left up into the market competition. And so is it going to be like Apple going to step up at some point and start to provide products that are going to compete with Facebook? In the absence of that, then there's very little incentive for Facebook to not just dial their surveillance capitalism up to 11 and just push forward and trying to accelerate the adoption of virtual reality and how much of our privacy are we mortgaging in the future if we start to go down this route where there's no real viable competition for what's happening and we can start to have everything consolidated into Facebook accounts and all of our VR activities starting to be aggregated into these psychographic profiles and really just creating this situation where whatever we say or do in these virtual spaces is going to be monitored, harnessed, and data mined. So lots of different things there that in the future of XR, certainly very exciting, but there's a lot of high stakes things that are happening here. And we didn't see anything from Apple today. So maybe we'll see something within the next couple of weeks. We'll see if they add it as one more thing as they typically do at the end of their press conferences is kind of have a surprise at the end. So, we'll see if Facebook starts to reveal some of their long-term plans with augmented reality. And, you know, they had already this leak of Oculus Quest 2, so expect to hear a little bit more about that as well. So, that's all I have for today, and I just wanted to thank you for listening to the Voices of VR podcast. And if you enjoy the podcast, then please do spread the word, tell your friends, and consider becoming a member of the Patreon. This is a listener-supported podcast, and so I do rely upon donations from people like yourself in order to continue to bring you this coverage. So, you can become a member and donate today at patreon.com. Thanks for listening.

More from this show