Wagner James Au / New World Notes

Based on earning reports from Q4 2020 and Q1 2021, we were able to estimate that Oculus Quest 2’s install base was around 3-4 million as of this April. Facebook announced its Q2 2021 earnings yesterday, so we can now update that figure based on this data:

Revenue from Facebook’s Other segment, including consumer hardware such as Oculus virtual reality headsets, totaled $497 million, up 36% and less than the $685.5 million StreetAccount consensus estimate.

If we reasonably assume that most of that $497 million was generated by sales of the $299 Quest 2, and do some simple thumbnail math, that translates into roughly 1.6 million units sold during April-June 2021. Bringing our estimate of Quest 2’s install base to 5-6 million total.

And given the news earlier this week, we can be even more confident that this range is roughly accurate:

On Tuesday, the U.S. Consumer Product Safety Commission announced a recall of “about 4 million” Quest 2 units owned by US and 172,600 Canadian consumers. So that’s a solid figure for the North American install base. With Facebook’s earnings report, the non-US install base is 1-2 million more on top of that. This puts us in striking range of Zuckerberg’s goal of a 10 million unit install base, which may very well be reached during the next holiday sales season. Whether 10 millions represents a “critical magic number” to have a self-sustaining ecosystem, of course, is a very different, untested question. (Videogame consoles are often seen as being self-sustaining only after the install base reaches 50 million+.)