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Strategy Analysis Project – Facebook and Magic Leap on Virtual Reality

Because Facebook has a broad presence throughout the technology sector, it can provide valuable products and services to many customers (Kim et al., 2019). Due to its ever-increasing popularity since the company’s inception, the social networking website has broadened the demographics of its user base beyond only high school and college students. Therefore, those who use other social media platforms are at the forefront of Facebook’s user base. However, the network also delivers significant economic advantages to other parties, such as advertising, which gain from Facebook’s vast user base, or companies who may employ the platform’s professional services. On the other hand, Magic Leap is the first head-mounted device in the planet’s history to take a significant leap into augmented or mixed reality (Caruso et al., 2021). It is a startup firm that is kept under wraps but has a lot of energy, and they are putting the final touches on its headgear right now. This headset will change the technology that is used in the area of augmented reality. The needs of consumers will be met, and the areas of communication, entertainment, and gaming will get immediate attention. This essay is a depiction of the strategic study that was conducted between Magic Leap and Facebook.

Key Differences in Strategies


Facebook Spaces is a virtual reality software that allows you to invite up to three of your Facebook friends to join you in a shared virtual environment, where you can all chat and share content. The Facebook Spaces app is now available for Oculus Rift and HTC Vive users to download. To use Facebook Spaces in virtual reality, you must first remove your headset and sign into your account. Mark Zuckerberg, CEO of Facebook, demonstrated his forward-thinking stance (Kim et al., 2019). Facebook plans to dominate the virtual reality (VR) gaming market by building a solid technical basis, recruiting top-tier developers, acquiring established virtual reality hardware and software firms, including adverts, and tapping into the network’s large user base.

Magic Leap

Magic Leap’s strategy of targeting businesses rather than consumers with augmented reality glasses has more significant potential. Its first headgear, released in 2018, cost $2,300, which scared off all except augmented reality (AR) software and content producers (Caruso et al., 2021). Magic Leap will concentrate more on training, production, healthcare, brand activation, and programmers in the business sector.

Assumptions behind the Strategies


Because of the sheer amount of prospective users, the Oculus platform might stand to gain significantly from Facebook’s 2.8 billion monthly active users (Kim et al., 2019). This would be especially true for popular social virtual reality games. The value of social play may be increased by having more individuals participate in it. Facebook is concentrating on establishing a solid foundation for its technology operations. Investors more suspicious of Facebook’s growth potential in virtual reality may also want to wait until the company has completed testing in-game advertisements before buying the company’s stock. The rate at which new users are acquired may be slowed down if advertising content is not presented effectively (Kim et al., 2019). The Facebook stock looks pretty valued, considering the firm’s growth potential. However, it would not be easy to dig into the company’s fundamental value and growth story in a single session.

Investing in the abilities of developers to produce a virtual reality device that can replicate genuine workplaces for OSHA training, education, and other workplace goals is another alternative (Kim et al., 2019). In a controlled environment, students may test their newly acquired skills and work to improve them. Some areas that have benefitted from and investigated the use of this technology include elementary school, anatomy training, the army, astronaut education, flying simulations, mining instruction, building style, driver training, and bridge inspections.

It is possible that Facebook currently has the product. Still, its immediate plan is to acquire and integrate with existing virtual reality hardware and software companies to secure a competitive edge. Suppose the company can discover a method to incorporate advertisements without damaging the immersive nature of the gaming experience. In that case, it will allow game creators to earn more money, attracting more game developers to the Oculus platform and making games more realistic. Actual adverts shown on in-game TV screens and billboards, for example, would not interfere with the players’ experience but would still generate revenue for the game’s developers and Facebook (Kim et al., 2019).

Facebook’s massive user base in social networking provides them with a unique edge when it comes to enticing consumers. In addition to drawing in top-tier content providers, Facebook also has an advantage in attracting customers (Kim et al., 2019). There is no other virtual reality headset that can match the low entry barrier and great potential for network externalities that the Rift provides. Additionally, there is no other virtual reality headset that is as affordable and independent from consoles as the Rift. Consequently, it is anticipated that Facebook would boost the quality and quantity of the unique items to entice new users and maintain the ones it already has. Facebook is in an excellent position to swiftly raise its share of the virtual reality gaming business so long as it continues to distribute commercial content in a way that seems to Oculus players to be very natural.

Magic Leap

At the same time, Magic Leap provided select media members with early access to its prototype (Caruso et al., 2021). The reviews published by the press were, on the whole, unimpressive. So, by letting customers try out the product on their own, they may better understand how it works. Of course, providing sufficient supply is as simple as putting in place a production system, whether or not that system is located all over the globe. The focus also impacted the corporation on healthcare and cited facts gleaned from actual product use, which revealed both the product’s benefits and drawbacks. With the assistance of brand activation, they could establish a foothold in the virtual reality (VR) ecosystem, giving them a significant advantage in the rapidly developing area of cutting-edge technology (Caruso et al., 2021). Finally, it is important to spotlight the developer’s skills so that additional groundbreaking innovations may be made.

Despite the company’s troubled past, it successfully transitioned to an enterprise focus. They analyzed consumer and business data (Caruso et al., 2021). They considered creating some of their material in-house. This is a huge project. Integration with business processes is crucial for businesses. Instead of blindly introducing new technology and expecting people to adjust, you should learn how to integrate with their existing processes. That’s what most of the effort has been directed upon. Putting a premium on understanding not just the requirements of our corporate clients but also the ecosystems in which they operate.

Systematic Analysis and Conclusion

It should thrive if Facebook sticks to those fundamentals over the next five years. There’s always hope that technology will make a big leap forward and become useful in construction, military, and medical industries beyond simply video games. There will always be a massive virtual upgrade in the future of employment, entertainment, travel, and society. Virtual reality is much like the privileged white child of famous parents who keeps getting better grades and praise regardless of their performance.

Facebook sees resistance in the real world as it tries to take over the emerging virtual reality industry. Mark Zuckerberg, CEO of Facebook, sees virtual reality (VR) as the dawn of a new age of computing in which people can collaborate and have fun in vibrant, online environments. In recent years, Zuckerberg has spent tens of millions on virtual reality (VR) projects, including a two billion dollar purchase of VR gear company Oculus in 2014 (Kim et al., 2019). Facebook’s virtual reality plans revolve around Oculus, the company’s flagship VR headset and the acquisition and financing of a slew of VR developers to guarantee that consumers have access to a wide variety of VR games. It turns out that content is still king, even in the virtual reality industry.

At some time, Facebook will need significant revenue from its Oculus virtual reality division. Oculus is a division of the corporation that does not disclose sales numbers; nonetheless, given the very cheap price of its virtual reality headsets compared to those of its rivals, it is likely to be unprofitable. Like other digital firms like Amazon and Google, Facebook is eager to lose money on physical items in the hope of making it up in other ways (Caruso et al., 2021).

For two reasons, this has far-reaching consequences. Initially, this endeavor focused on the progress and improvement of virtual reality (Kim et al., 2019). Second, VR has made it abundantly evident that the clinical dimension is one of the most researched, both quantitatively and qualitatively, and that this expansion is accompanied by not just technical advancement and articles in computer science, engineering, and allied sciences. Interfaces for kids and medicine, everyday usage and behavioural evaluation, special effects, systems views, and tutorials all advanced noticeably as virtual reality research got underway. Because the virtual reality was utilized in trials related to new technical impulses, we may date the beginning of this pioneering age to the development era. It should come as no surprise that this occurred just around the time that the so-called “dot-com bubble” burst in the late 1990s, coinciding with the rise and fall of the “new economy” and its emphasis on IT expenditures (Caruso et al., 2021). During this period of progress, the first truly effective clinical systems for surgical procedures, telemedicine, human spatial navigation, and the initial stages of the evolution of therapeutic and laparoscopic techniques were developed thanks to the convergence of pioneering techniques into ergonomic studies (Kim et al., 2019). Research into virtual reality shifted significantly towards the turn of 2000, focusing on therapeutic applications such as therapy, laparoscopic surgery, and neurorehabilitation (Kim et al., 2019). There has been a corresponding increase in the number of apps and papers published over the last five years, both on the hardware side, with the introduction of several HMDs, and on the software side, with the rise of numerous independent programmers and virtual reality communities.

If you look at the published research from the previous several years, you could get the impression that the majority of VR research progress has been made in medicine. The truth, however, is more nuanced; thus, it is important to dispel this misconception. Studies on the use of VR in healthcare settings are published; however, their results vary widely depending on the tools at the researchers’ disposal. In the recent decade, virtual reality (VR) technology has advanced rapidly in the business world (Caruso et al., 2021). When creating virtual solutions, hardware solutions were formerly prioritized, but increasingly software takes centre stage. Hardware has become a commonplace item that can be purchased for a little outlay of cash. The development time and resources needed to adapt the program to each new experiment are substantial. Today’s virtual reality researchers must have the skills to modify the software in their laboratories (Kim et al., 2019).

As with any other field, advances in computer science are essential to the development of virtual reality for use in the modern therapeutic setting. Each day brings innovative new ideas and products that make VR even more technologically advanced than it already is. The development of virtual reality hinges on quantum leaps in software and technology (Caruso et al., 2021). The difference between previous and future virtual reality research is that the emphasis was on realism, but now it is on interaction. To begin, 30 years of virtual reality have been spent constantly improving resolution and perception (Kim et al., 2019). After years of hard work, researchers have now reached a high enough resolution to concentrate on making virtual reality as lifelike as possible. Indeed, a genuine experience requires a satisfying conclusion and a credible exchange of ideas between the participants. Improvements in technology and software provide unlimited possibilities for enhanced interactions.

Virtual reality interactions will increasingly include physical movement, which has important implications for neuroscientists developing innovative approaches to existing technologies. Using hands with contactless devices, i.e., without gloves, facilitates more natural engagement in virtual worlds. The Leap Motion device1 eliminates the need for gloves or markers while interacting with virtual reality. Users of virtual reality systems may now interact with virtual items and situations more naturally and for a far lower price. The so-called “feeling of presence” is achieved when consumers feel more immersed in virtual surroundings despite intervening technology (Kim et al., 2019).

It is not impossible to have different kinds of interactions, and new ones keep popping up. Tactile and haptic gadgets, for instance, may provide users with constant feedback by simulating the sense of touch and the real weight of virtual things via force feedback. Low-priced motion tracking systems, like Microsoft’s Kinect, also allow engagement (Kim et al., 2019). Users may move their bodies and interact with virtual worlds naturally using body-tracking technologies. The position and orientation of the HMD and any controllers held by the user are typically tracked by an embedded system. Because of this, monitoring makes a far higher level of engagement possible, enhancing the virtual experience.

Taken together, they indicate that the therapeutic applications, behavioural considerations, and technical advancements in virtual reality are all part of a more complicated scenario than was the case with the older platforms employed before the massive proliferation of solutions (Caruso et al., 2021). We hope that by showcasing the links and consequences of the study in numerous domains, including clinical, psychological, commercial, recreational, and academic, among many others, our effort will give a clearer picture to stakeholders.


Caruso, T. J., Hess, O., Roy, K., Wang, E., Rodriguez, S., Palivathukal, C., & Haber, N. (2021). Integrated eye tracking on Magic Leap One during augmented reality medical simulation: a technical report. BMJ Simulation & technology enhanced learning7(5), 431- 437.

Kim, T., Kim, H., & Kim, Y. (2019). How Brands’ Facebook Posts Induce Consumers’e-Word-of-Mouth Behavior?: Informational versus Emotional Message Strategy: A Computational Analysis. Journal of Advertising Research59(4), 402-413.


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