During investigations by the United States Federal Trade Commission (FTC) into Meta’s acquisition of VR fitness game devs Within, a filing revealed that the company was initially looking to expand popular block-slashing rhythm game Beat Saber into a dedicated fitness app.

It’s been a little over a year since Meta announced its intention to acquire Within, the studio behind the VR fitness app Supernatural. In July, the FTC blocked the deal for allegedly limiting fair competition among companies in the VR fitness space. At the time, FTC Bureau of Competition Deputy Director John Newman said that Meta was “looking to buy its way to the top.”

Now, as the suit is expected to conclude by year’s end, the FTC is attempting to prove that Meta had clear intentions to enter the VR fitness market with its own solution prior to the acquisition of Within, which would show the company could have competed with its own talent and resources, but decided to buy out Within instead, thereby reducing marketplace competition.

In the ongoing process to formally kill the deal, the FTC revealed Meta was looking to expand its top-performing game Beat Saber into “a dedicated fitness app,” a Bloomberg report maintains. Beat Saber was itself the result of a separate acquisition in 2019.

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According to the filing, in March 2021 the Beat Saber team presented plans internally to pivot the rhythm game into a fitness-focused app. By June 2021, efforts to transition Beat Saber were abandoned when Meta decided to acquire Within.

“Meta already has engineers with the skill set to both expand Beat Saber into fitness and to build a VR dedicated fitness app from scratch,” the filing states, maintaining that “[b]uying Within was not the only way Meta could have developed the production capabilities and expertise needed to create a premium VR fitness experience.”

Meta is set to submit an outline of its defense soon as it heads into a two-week hearing before US District Judge Edward Davila in San Jose, California. Here’s a statement from Meta regarding the process:

“As we approach next month’s hearing, we are confident the evidence will show that our acquisition of Within will be good for people, developers and the VR space, which is experiencing vibrant competition,” a Meta spokesman told Bloomberg. “As we have said from the beginning, the FTC’s case is based on ideology and speculation, not evidence. We are ready to make our case before the court.”

Judge Davila is expected to decide by the end of the year, so we’ll soon find out whether the alleged $400 million deal is officially dead in the water or not.

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  • KD’s Burner ✔️

    I am impartial on an issue like this because we can agree that consolidation isn’t good. However, the FTC shows that a fitness app like Supernatural is a category inside a subcategory proving that they are stifling fair competition. The FTC easily proved that VR fitness is a niche inside a niche putting Meta in a bad position. If the VR fitness markets were larger this would not have taken place. Supernatural’s market share in VR is substantial but still small. But when its competitors make a smaller subset of that market the FTC is prone to sue. Comparing it to the Activision deal, Microsoft is on an easier edge because they are able to prove that gaming existed before COD and will continue to do so even if they left other platforms.
    If the deal fails IMO it is a blessing in disguise. As someone with 700hrs in Beat Saber and purchasing every music pack I’m surprised the fitness aspect doesn’t get developed more. At the same time, the FTC will be able to put another badge on the wall to show us, consumers, that they are actually doing their jobs. Now I am waiting to see what the FTC will do about the Activision deal if the CMA doesn’t blow it up.

    • MeowMix

      Now I am waiting to see what the FTC will do about the Activision deal if the CMA doesn’t blow it up.

      or the current proposed Kroger and Albertsons deal. Even in my area, if the merger were to go through then over 50% of the grocery stores in my area would be Kroger-Albertsons (thus, meaning Kroger-Albertsons will be closing some stores).

      Mind you there’s both Republican and Democratic Party Attorney Generals BEGGING the FTC to put a block in the merger right now; yet we see thumb twiddling away and going after a $400M acquisition.

      • KD’s Burner ✔️

        Yep that comes along with FTC playing a lot of politics. Although you can say that the K and A merger might be good because look at Walmart they have some of the lowest prices. However, the commission picks and chooses where they put their nose into. You putting into perspective that the FTC following a 400$ million fitness VR app that less than 10 million have paid to play is funny.

        Especially when Kroger and Albertsons feed millions of people. With a combined revenue of over 200 billion against a fitness app that I would be surprised if it even made 100 million. I think the FTC might forget that food is more important than a fitness app on a mobile device.

        • Ad

          That deal shouldn’t go through. Hell, I’m sure you could prove that the least competitive food markets have the most shrinkflation.

        • wheeler

          Is there any evidence that the FTC won’t block this merger if it even comes down to that? Kroger is already under investigation by the FTC due to supply chain disruptions. Everything I’ve heard from anti-trust experts indicates they will block this (if it even needs to come down to this, given the existing lawsuits). The situation is complicated by the fact that the execs are deliberately (artificially) sabotaging Albertsons so it can claim it “needs to be saved”. But it seems silly to start prematurely coming to conclusions that they are playing “party politics” and that this is somehow disproportionate application of antitrust against poor facebook (especially when facebook is clearly aligned with corporatists on the Democratic side–not saying the Rs don’t have just as many)

          And the idea that we should tolerate monopolies on the sole merit that they supposedly lower prices has been an absolute failure.

      • Ad

        Stop all the deals.

  • another juan

    Whatever plans they proposed internally at beat games, turning the most popular VR app into a completely different thing sounds like a terrible business idea. Making a brand new, fitness-focused app, sharing the “beat saber” branding sounds way more sensible

  • MeowMix

    I’m glad Beat Saber and Supernatural are separate apps; both are waaaaay different and go beyond just ‘hitting music targets’ (which is the only thing they have in common). Heck, I don’t even use Supernatural’s Flow (Beat Saber clone) mode, I’m 90% using their Boxing selection.

    Even in comparison to the gameplay, Beat Saber rewards accuracy and hitting targets regardless of how much force you use. That’s why you see the typical ‘wrist-flinging’ maneuver used for Beat Saber.

    Supernatural rewards hitting the targets with power/force, and puts a greater emphasis on dodging obstacles than does Beat Saber (dodging being a key Boxing skill). Supernatural is all about moving the user, so 360 tracks are the baseline experience (whereas, 180 foreard tracks are the baseline Bat Saber experience).

    Lastly, Supernatural is an entire fitness offering – it includes 5-10 min full body stretching modules w/ a coach, 5-10 minute meditation/cool down modules w/ or w/o a coach. Supernatural is a very compelling Fitness program.

    Regardless of what Beat Games was proposing, at the heart of Beat Games is a Game studio (their ‘fitness app’ would be a glorified game). Whereas at the heart of Within is a Fitness studio – 2 different philosophies that created 2 very different experiences.

  • Ad

    They should absolutely cancel this deal, if the price was rational than supernatural was a real player and keeping it off the other headsets narrows the market a lot. If the price wasn’t rational, then facebook is being extremely aggressive and trying to harvest the crop of devs and prevent any of them from being real third party players. Facebook is committed to being a dangerous monopoly and they need to be stopped, and honestly they should be broken up into multiple companies, with the XR division also being multiple companies.

    • CURTROCK

      If Byte Dance wanted to buy out Supernatural, would you be ok with that?

      • Ad

        Not really, no.

  • geronimo

    Never having heard of Within, this was a very confusing headline to read.

  • digitaldeity

    Apple purchased “Dark Sky” weather app even though they had their own competing weather app in a much less crowded field of weather apps on mobile phones. There are so many other deals that you could scruitinze. I don’t see how in the world the FTC wins this case, but you never know.