Facebook’s growing grip over the VR space reached new heights last month as the company’s Oculus headsets exceeded 60% of the share of monthly-connected headsets used on Steam.

Facebook was already a major player in the VR market before the launch of Quest and Quest 2, but those headsets have significantly accelerated the company’s share of devices on the market—even on PC. Although Quest and Quest 2 are designed primarily as standalone headsets, both have the ability to act as PC VR headsets by connecting to a PC through a cable or wirelessly.

The hybrid PC VR capability has certainly not been overlooked by customers. Quest 2 became the most popular PC VR headset used on Steam just months after its release. It also quickly propelled Oculus headsets overall to more than 50% of the headsets used on Steam for the first time since the first generation of VR headsets hit the market.

Now just seven months later, Oculus headsets account for 60.18% of the share of VR headsets used on Steam, per the latest data from Valve; a growth of nearly 1% each month.

Zooming in to look only at Facebook’s headsets, we can see just how quickly Quest 2 blasted onto the scene. While it has crunched the original Rift and Rift S, it looked like the biggest bite came out of the original Quest, suggesting that a significant portion of those users traded up to the newer headset. When looking at Facebook headsets alone, Quest 2 makes up more than 50% of those used on Steam.

It’s not entirely surprising that Quest 2 broke onto the scene so quickly. At $300, it’s far and away the most affordable headset of its generation while offering extra value on top thanks to its standalone and PC VR capabilities. This is no doubt the result of heavy subsidy by Facebook, which is believed to sell the headset at a significant loss with the hopes of making up the difference through software revenue.

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Ben Lang
Ben is the world's most senior professional analyst solely dedicated to the XR industry, having founded Road to VR in 2011—a year before the Oculus Kickstarter sparked a resurgence that led to the modern XR landscape. He has authored more than 3,000 articles chronicling the evolution of the XR industry over more than a decade. With that unique perspective, Ben has been consistently recognized as one of the most influential voices in XR, giving keynotes and joining panel and podcast discussions at key industry events. He is a self-described "journalist and analyst, not evangelist."
  • oomph2

    All VR headset makers must learn from it.
    Quest is the right kind of h/w concept.
    No body wants to be tethered and a tether is very bad while playing in a high action game which require split second decision especially in MMO.
    But in next version I would prefer a lightweight glasses like headset connected to a powerbank in pockets and powerful enough to run Skyrim.

    • Christian Schildwaechter

      While non tethered HMDs are without doubt the right way, the Quest has serious deficits regarding usability due to comfort (heavy, very unbalanced) and performance. Considering that most apps run on both Quest 1 and 2, and the Quest 2 being ways more successful, this boils down to the price as being the main advantage. Untethered makes it convenient, and at that price many people are willing to deal with the bulk and the simpler graphics.

      But the price isn’t real. We know that the Facebook Reality Devision is losing billions every year. This is not all due to the Quest 2 being sold at a loss, but due to the amount of development and (wo)manpower they are throwing at it. Nonetheless this severely limits how much all VR headset makers should learn from it. Sure they could try to create a similar or better AIO to compete with Facebook, but only if they also can eat the losses for years like Facebook.

      I think that the HTC Vive Focus is a better HMD then the Quest 2 in pretty much every aspect besides the price, but it has no chance outside the business market. The problem isn’t that other manufactures don’t recognize the value of untethered VR HMDs or that they lack the ability to build them. They lack the financial resources to compete with Facebook’s dumping pricing.

      • shadow9d9

        They are making a lot back with 30% on all game store sales.

      • digitaldeity

        So in otherwords it’s like consoles from Microsoft or Sony where they take losses and try to make money from games and other areas. Or, like the recent Steamdeck where Gabe Newell, said that the pricepoint is painful for Valve. But, Valve is keeping the price point low hoping that they can sell a ton of them and think about potential for profits for the long haul. Sounds a lot like what Oculus/Facebook is doing. I’m not sure why people feel that by taking lower margins on an unestablish medium/product to ensure that the ecosystem can grow is a bad thing.

        Facebook/Oculus other option is to sell the device high and see adoption of the VR space crawl to a few niche users. That didn’t work so well with the original Oculus Rift.

        Maybe we’ll get lucky and Oculus will raise the price a few hundred dollars to make all their haters happy.

        • Christian Schildwaechter

          We aren’t asking Facebook to increase their prices to a level where it reflects the actual costs. Most of us are very happy that Facebook is willing to take a loss, because it provides consumer VR with a much needed boost. In fact without Facebook, consumer VR might have died altogether.

          Instead we are asking the Facebook “haters” to understand that other companies cannot replicate this. When HTC revealed the Vive Focus 3, they got a lot of negative feedback for the business level price. Many people want an AIO VR HMD, but without Facebook, and they point to the Quest 2 when arguing “look, if Facebook can make it for USD 300, then HTC can sell one for USD 500, so they must be just greedy for not offering me that.”

          I reacted to “All VR headset makers must learn from it”, pointing out that this is not so much a technical, but a financial problem, and unless someone big like Microsoft, Sony or Valve throws their hat into the consumer VR ring, Facebook will remain the only player. Which is exactly why Facebook is willing to do this, because it is the only way they can escape their current dependency on Apple and Google, since they are forced to run their apps and ads through the respective iOS and Android stores and platforms, with all the revenue sharing and tracking limits that implies.

    • ZarathustraDK

      I’d much prefer a physical tether to my pc over the virtual chain of Facebook.

      People gushing over baubles like this is why we can’t have nice things. You’d think that a technically impressive movie like “Ready Player One” would be able to hammer home that most basic of lessons.

      Then again, slaves were also a thing once. I mean free labor, who wouldn’t want that, right? Reading people’s excuses for giving Facebook a full record of their movements and voice plus a partial 3d-render of their surroundings while restricting their behavior to an approved code of conduct (or run the risk of bricking), all for the sake of getting rid of an effin’ wire, is so f****** discouraging and a far cry from what VR could have been,

      • JB1968

        Exactly. Sadly, statistically, in every such mass of customers there is a majority with significantly low inteligence (to say it politely) which can’t see the real consequences of their behavior.

        • shadow9d9

          The wire pulling on my head physically hurts and the constantly reshuffling of wires is immersion killing. I have 2 VR rooms set up for my son and I to pay separately. Wire free is the future. Unfortunately, Valve has chosen to do nothing for the last 2 years. They could have made a nice wireless option but they haven’t.

          • JB1968

            Sure, Wire-free is the future, but with the current tech we are not there yet until a really robust solution with no compromises on latency, framerate and image quality is made. I can wait with the one cable (it’s not hurting me at all, not sure what setup are you using) in the meantime.

      • jbob4mall

        It ain’t about the wire for most people. It’s about the expense of buying a pc.

  • Ad

    “which is believed to sell the headset at a significant loss with the hopes of making up the difference through software revenue.”

    Facebook is not making the money back through software and they don’t intend to. They’re losing 3 dollars for every dollar they’ve taken in on FRL. That’s not a loss leader, it’s a loss loser. Zuck himself has said the App Store is irrelevant. They are losing heavily in the hopes of killing all competition in the VR space so it can be their personal launchpad into AR against Apple.

    • Andrew Jakobs

      Oh please, it’s bullshit they are loising heavily on the headset, it’s sold at cost.

      • Christian Schildwaechter

        This not contradictory, it mainly depends on whether you only look at the production costs or all cost accumulating at FRL, when their sole selling products are the Quest 2 hardware, software and services.

        We’ve heard that FB has almost 10,000 people or about 20% of all employees working on XR under FRL. You don’t need 10,000 humans to develop a Quest 2/3/Pro, run the app store, develop services like Horizon, talk to developers etc. So most of them will be working on Augmented Reality, developing business models for monetization, research for projects that will never become products etc.

        Facebook isn’t losing billions because they sell the Quest 2 at production cost, not recouping development costs etc. The Quest 2 is just one item on their expenses list, and most likely not the largest, all part of a large, strategic investment that will cost a couple of billions. The sole reason to offer the Quest 2 at production cost might be that selling it for less could get Facebook into even more trouble with the FTC.

        And while this may change over time, income from the app store is insignificant right now. Last September they reported USD 100mn in total software revenue for the Quest. With 30% going to FB, they made back USD 30mn in software, pretty much negligible when compared to what they payed for Beat Saber alone.

  • Ad

    The actual point of Link, beyond the fact that it let them drop the Rift S, was to make sure that PCVR cannot exist independently of the quest. And as they fund software and devs stop developing for PCVR or develop just ports, PC quest users will just use it standalone instead, with crossbuy to grease the wheels. It takes the value of something like Alyx being a system seller and makes it pointless.

    • VR5

      It’s good strategy though, isn’t it? FB aren’t furthering VR out of kindness of heart. But they are furthering it.

      Thanks to Quest, more people get to play Alyx. And if other pubs are willing to fund games that can only run on PC, thanks to the affordable Quest there is a bigger install base to sell to.

      It’s win-win for everybody. FB of course are trying to maximize their own share. Valve are still reaping the benefits as Steam VR also thrives.

      • Christian Schildwaechter

        The link is a win for FB, as it removed a lot of the argument for buying a non FB HMD. It is not necessarily a long term win for PCVR. And I seriously doubt that the success of the Quest even on Steam will motivate publishers to fund games that can only run on PC.

        For one the total percentage of Steam users with any VR headset hasn’t significantly increased, despite the Quest 2 winning a large share. Partly because a lot of Quest 2 seem to be upgrades by existing VR users, not new users, so there aren’t more buyers for PCVR titles all of a sudden.

        And we know from some game developers that their titles on Quest are outselling other VR platforms by up to 4:1. So if anything the dominance of Quest 2 on Steam will tell publishers that the Quest 2 is where the money is, while PCVR is stagnant. Which means there is even less incentive to develop games that can only run on PC, while throwing all resources at the Quest and then porting back to PC makes a lot more sense financially.

        • VR5

          According to this very site you’re posting on, Steam VR had 1.7 million new users in 2020. Since Valve managed to provide steady shipments, the Index has constantly been in the top 10 revenue charts. The PC VR install base is increasing, both thanks to high budget hardware like the Index or Reverb and the affordable Quest 2.

          https://www.roadtovr.com/valve-steam-vr-2020-new-users-revenue/

          So not only is PCVR in fact doing better, it certainly wouldn’t be doing better than it is now without an affordable HMD.

          That devs will primarily support the platform that sells the most is obvious, and non VR games also prioritize consoles over PC. But the reason why PC cannot compete with dedicated gaming devices is price and ease of use. And those issues wouldn’t just resolve if consoles didn’t exist.

          • Ad

            Oh my god, anyone source with anything between their ears says steamVR is in a bad place. You’re such a cringe troll spinning everything to be the opposite of what it is. I told you a long time ago to just screw off and stay away, your corporate zombie comments are never welcome.

          • VR5

            It would be in a worse place without Index and Quest 2 growing the install base. Don’t blame Quest for PCVR not doing as well as you’d like it to.

          • Ad

            Keep up your hailcorporate delusions and your cultish devotion to more bodies in VR at any cost.

      • Ad

        You are absolutely illiterate and brainless. It’s the exact opposite. The kiss of death isn’t a real kiss.

        • VR5

          Oh wow, you convinced me by insulting me. That always works, you certainly don’t need a different approach.

          • Ad

            There’s no point arguing with someone who can read words and see the opposite. Slimy and pointless.

    • kontis

      Embrace, extend, extinguish.

      Invented by Microsoft, perfected by Google, but Facebook also knows how to do it.

      Rift CV1 was the embrace. Quest is the extend (you want the best bang for buck PC headset, we have Quest for you, it’s cheaper and wireless, it’s also a standalone device with none of the hassle and broken Nvidia drivers).

      • Ad

        They sponsored a video with Linus Tech Tips, like the number one PC youtuber, where he said you should get an eight core CPU for VR, and then said “but if you don’t want to worry about all that, just a get a quest.”

    • philingreat

      Oculus launched the Rift S and Quest at the same time at the same price. They let the users decide which headset they prefer and Quest was way more successful. Don’t blame Oculus for dropping the Rift S, the market decided.

      • Ad

        So they released a rift s and a rift s with a phone inside for the same price?

  • NL_VR

    Impressive. Quest is a really good VR-Headset but i wish there were competition.

  • Anonymous

    Funny how the PC master races ridiculed the Quest in every single level at first as if they wanted to keep VR a privilege only to those who can afford it.

    • kontis

      BS. The ridiculing has a completely different reason and you know that.

      • Anonymous

        BS what? I have been reading your narrow minded posts since two years ago and how you were one of the front runners in here riduculing AIO VR since day 1 and continue on bashing Oculus just because it is FB regardless if they did something good for VR industry as a whole. You even just admitted above you had no idea what ARM SoC chips are already capable of.

        • guest

          Yeah the different reason is they were to close to Microsoft. Now Steam needs to be get on a mobile distro because its do or die!

    • Toto_Dot

      Valve, any day it wants, could put a block on ALL Facebook VR headsets from using Steam. Then we’ll see how see how the VR landscape changes.
      Fuck Facebook.

      • RealPoorman

        That will be stupid

  • kontis

    BTW, I always assumed that the idea of PCVR standalone VR headset is doomed because of x86 architecture and games designed for more power than Quest 2 has, but I compared Valve’s SteamPal(switch competitor) specs to PCVR minimum specs and surprisingly it actually slightly exceeds it (it’s well above 2 TFLOPS). It should be able to run even Half Life Alyx at lowest settings, especially with Valve being able to “calibrate” the drivers/steamVR sdk and their engine, to eliminate the performance issues that are common in PCVR and not caused by the hardware, but software.

    It’s actually quite impressive that mobile PC SoCs are getting to that level of performance. This could be the chance to take over Quest 2, but if Valve waits too long or makes it too expensive it won’t work.

    The big.LITTLE approach is apparently also coming to mobile PC CPUs, so the power efficiency and battery life issue may also be solved on x86 in the near future.

    • Blaexe

      I don’t think there are any confirmed specs but keep in mind that first, PCVR games at low settings AND resolution is not exactly a great experience and second, a VR HMD is even more restricted when it comes to heat, power draw and battery consumption than a “small console.”

      A standalone headset that runs x86 software good enough is not viable.

      • Christian Schildwaechter

        I would also doubt that x86 will catch up with the ARM performance to power ratio anytime soon, but a tethered PCVR running of a ARM based mobile console might actually be an intriguing option and very much in Valve’s interest.

        Just from the user perspective, it would allow to create a much smaller, lighter, cooler and better balanced HMD. It would only contain the display, a couple of sensors and a simple SoC to decode a DisplayPort signal. Removing the expensive high end SoC, most of the RAM, Flash and the battery means it can be produced cheaper. If they add at least WiFi, it could also be used for Streaming just like the Quest 2 connected to a PC with an extra battery pack, possibly on the back like with the Focus 3.

        It gets really interesting if you add a portable Switch like console. We already know how fast ARM SoCs can be from Apple’s M1, which runs circles around the XR2. Nvidia now owns ARM and they have (simplified) versions of their excellent DLSS upscaling on their Tegra GPUs. The Tegras are too power hungry for phones or VR AIO, but with the console strapped not to your head, but to your hip, you can make it a lot more powerful with a much higher battery capacity. So a super lightweight HMD tethered to a device on your hips running HL:A at not only low end setting is quite feasible, esp. if Valve can get Nvidia to cook up some dedicated silicon not restricted by weight/power limits of an HMD.

        From the software side many of the necessary pieces are already in place, with Valve pushing gaming on Linux with the Steam Machine, pushing everything towards Vulkan with MoltenVK, and Proton to run Windows software on Linux. What is missing are the extra instructions to the ARM SoC that Apple added to the M1 to handle x86 byte ordering, which allow the M1 to run x86 software at similar or higher speeds than on their Intel based machines. This again would be a job for ARM/Nvidia.

        But combine all this, and you get a very light HMD that can run existing VR titles just as well as a entry/mid level VR PC, and titles recompiled for it and using ML based upscaling a lot better. Such a device would be vastly superior to the Quest 2. And a lot more expensive, but the console part would also work as a Switch alternative running the whole Steam library, so people would most likely be willing to pay more.

        The concept is very exciting, technically feasible, and so far a rumor at best. But Valve might actually have a real incentive to do it. They came up with the Steam Machine when Microsoft pushed their app store with Window 10, threatening the Steam cash cow. Steam Machines were a backup in case Microsoft tried to shut Valve out, allowing them to switch gamers to Linux.

        We are seeing a similar situation in VR. Facebook very successfully pushes the Quest 2 into the market, and while the Oculus store for Rift wasn’t a big threat with most VR gamers still buying on Steam, the Oculus store for Quest really means that FB could steal the VR gaming crown from Valve.

        They need to react without breaking the bank, and their best option is to leverage the vast Steam library, because FB has no chance to compete in this area. And since outsourcing all the risky hardware to partners while keeping all the software profits didn’t really work out with Steam Machine and VR, they will probably have to do it themselves this times.

      • Remember Intel Alloy? x86 didn’t fare well there, though the headset concept was forward thinking

        https://newsroom.intel.com/chip-shots/intel-unveils-project-alloy/#gs.6hgefi

    • VR5

      I was going to reply to this but thought it’s better to wait for official specs. That happened sooner than thought, wow. Obviously with its weight, the SteamDeck won’t make a good VR HMD on its own, but it might be an affordable (and portable) Quest 2 streaming machine.

      Gotta wait until December for confirmation of how well Alyx runs on it but the 256GB model might be a good recommendation for Quest owners without a gaming PC.

      • Blaexe

        The specs are below minimum specs for VR. Not sure what people are hoping for.

    • xyzs

      x86 days are numbered. This isa is dead – dead – dead and it will never catch up with Arm in the futur. You should have hope about games being compiled for Arm or x86toArm translators becoming a norm for old software instead of being excited about upcoming x86 portable products.

      That’s why China invests heavily right now on risc-v by example ( arm equivalent but technologically cleaner and more free ).

      • realclassicman

        Or.. They are not allowed to use x86 architecture? Because they are tyrrany dictatorship treating the world perhaps? They can’t develop or invent air shit themselves. Stole or ripped all tech they now have. Gr8 Country indeed..