Is it? I listened to about 10 minutes and couldn't figure out why I would listen to that. This isn't a scandal. I'm not sure why we're reviewing the tapes now.
I'm interested in how they pitch it to their staff/investors as a guide to where Zuckerberg intends to take the company. I agree investor conference calls are tedious to listen to but then SEC filings and annual reports are also boring unless you are interested in analyzing a firm.
I doubt the upvoters of this actually listened to it. It seems like when there is a big acquisition, people make it a point to cover the front page with relevant information, even when it's something with very little substance like an internal conference call.
Best quote from Zuck: "We're clearly not a hardware company. We're not gonna try to make a profit off of the devices long term. We view this as a software and services thing, where if we can make it so that this becomes a network where people can be communicating and buying things and virtual goods, and there might be advertising in the world, but we need to figure that out down the line."
CCP might make more sense, but they still don't really have technology for building these sorts of worlds. I deeply respect them, and think that they probably have more appropriate tech to offer than most, but I think that one of the most important parts of virtual worlds is Second Life's original killer feature - content creation, which is something they have little experience in.
The ability for anyone to create is powerful, as recent games like minecraft have shown. Second Life just never kept up with technology, and now the best ways to create content for it involve the use of modeling software with a high barrier to entry. (Of course, it's terrible in many other ways, but that's a separate discussion).
If someone can build a virtual world platform from the ground up, with tightly integrated content creation that is intuitive (maybe something like sketchup), and all in-world, it would be very powerful.
I've actually been wanting to build just such a platform for a long time, but learning 3d graphics isn't the easiest thing out there :)
As exciting as all this appears, you're looking at a 2016 release date a the absolute soonest; which essentially puts this project in the "vaporware until proven otherwise" category.
Is Second Life still a viable buy? Linden Labs seem pretty quite these days. Are they still growing?
They rarely get mentioned in the hallowed corridors of HN.
The last mention I could dig up was this, about 4 years back!!!
https://news.ycombinator.com/item?id=1032309
Could Carmack have been lured by an interest in being the guy who nails Second-Life-done-properly? That would be a pretty massive thing to put on your life CV if you got it right.
Facebook missed mobile. This was a concern pre- and immediately post-IPO. It took an engineering overhaul and tens of billions of dollars in acquisitions to bridge the gap.
The Occulus VR acquisition looks like Facebook hedging its bets with the future of consumer computing UX. Better $2 billion and, say, $200 million a year for ten years today than $19 billion tomorrow. Or so it seems he is thinking.
Still, I like to check the math. Occulus VR says it has sold 75 000 "development kits" [1]. It has been 1 year and 7 months since August 2012 [2], when Occulus VR began selling its development kits. Let's assume a 200% YoY 2013 growth rate - that means 56 000 kits were sold in 2013. Let's say these keep selling at the $350 the Developer Kit 2 goes for [3]. That's $20 million in 2013 revenues. Let's turn that into $2 million of profits - a 10% margin.
Let's value Occulus VR as if it were a growing perpetuity. If Facebook had a cost of capital of {10%, 20%, 30%}, Occulus VR free cash flow (FCF) would have to grow at least {10%, 20%, 30%} a year. Otherwise, its $2 billion price tag would not make sense.
Companies are not immortal. Let's value Occulus VR as a 20-year growing annuity. Setting Facebook's cost of capital at {10%, 20%, 30%}, Occulus VR's FCF would have to grow at least {45%, 58%, 71%} a year.
Using development kits sales as a base for such estimates doesn't make much sense. Development kits have low resolution, cause motion sickness, there are no playable games for them, you need to wait 1+ month for one. It is safe to assume that the kits were bought mostly by developers willing to experiment with the new platform. It is very hard to estimate how many end users will buy Oculus based on this number.
Sounds more like a pre-recorded greeting than a "conference call." Conference calls in our company sounds kind of like a huge argument at any given time.
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[ 3.0 ms ] story [ 79.7 ms ] threadBest quote from Zuck: "We're clearly not a hardware company. We're not gonna try to make a profit off of the devices long term. We view this as a software and services thing, where if we can make it so that this becomes a network where people can be communicating and buying things and virtual goods, and there might be advertising in the world, but we need to figure that out down the line."
Caprica holobands here we come...
http://caprica.wikia.com/wiki/Holoband
I think I'd prefer if the ultimate VR social network was actually open source and decentralised if possible.
They've both managed to maintain long-running virtual communities.
The ability for anyone to create is powerful, as recent games like minecraft have shown. Second Life just never kept up with technology, and now the best ways to create content for it involve the use of modeling software with a high barrier to entry. (Of course, it's terrible in many other ways, but that's a separate discussion).
If someone can build a virtual world platform from the ground up, with tightly integrated content creation that is intuitive (maybe something like sketchup), and all in-world, it would be very powerful.
I've actually been wanting to build just such a platform for a long time, but learning 3d graphics isn't the easiest thing out there :)
[1]: http://investor.fb.com/releasedetail.cfm?ReleaseID=835447
The guidelines say the title can be changed if the original is misleading, which would seem to apply here.
The Occulus VR acquisition looks like Facebook hedging its bets with the future of consumer computing UX. Better $2 billion and, say, $200 million a year for ten years today than $19 billion tomorrow. Or so it seems he is thinking.
Still, I like to check the math. Occulus VR says it has sold 75 000 "development kits" [1]. It has been 1 year and 7 months since August 2012 [2], when Occulus VR began selling its development kits. Let's assume a 200% YoY 2013 growth rate - that means 56 000 kits were sold in 2013. Let's say these keep selling at the $350 the Developer Kit 2 goes for [3]. That's $20 million in 2013 revenues. Let's turn that into $2 million of profits - a 10% margin.
Let's value Occulus VR as if it were a growing perpetuity. If Facebook had a cost of capital of {10%, 20%, 30%}, Occulus VR free cash flow (FCF) would have to grow at least {10%, 20%, 30%} a year. Otherwise, its $2 billion price tag would not make sense.
Companies are not immortal. Let's value Occulus VR as a 20-year growing annuity. Setting Facebook's cost of capital at {10%, 20%, 30%}, Occulus VR's FCF would have to grow at least {45%, 58%, 71%} a year.
Not a bad deal.
[1] http://www.oculusvr.com/blog/oculus-joins-facebook/
[2] http://en.wikipedia.org/wiki/Oculus_Rift#History
[3] https://www.oculusvr.com/order/
Tens of billions of dollars for Facebook's mobile efforts?