Early Quest 3 Data & The Enterprise Movement

By JP Minetos

The Quest 3s has entered its first post-holiday season, and while some numbers are emerging, the picture remains somewhat hazy. Reports from developers suggest a notable trend: free-to-play experiences are outperforming paid titles, with all-time highs in engagement and leaderboard positions. In contrast, traditional holiday surges for paid titles seem to have plateaued, with 2024's peak performance matching—or falling short of—2023’s benchmarks. So, what’s driving this shift?

Insights from LIV, (a Hartmann Capital portfolio company) tracking usage through its SDK, shed some light. The combined sales of Quest 3s and Quest 3 now rival historical Quest 2 figures, with the Quest 3s outselling the 3 by a margin of 2:1. Despite this hardware success, developers reliant on paid titles are struggling to maintain traction.

One explanation lies in the evolving ecosystem. The Quest store has undergone rapid expansion, nearly doubling its total app count over the past year to approach 6,000 titles. This explosion of content, coupled with Meta's introduction of a unified store merging App Lab with the main storefront, has created a crowded marketplace. The combined store lacks the curated spotlight once offered to premium experiences, diluting visibility for paid titles amidst an influx of free-to-play games.

The rise of free-to-play is another critical factor. Casual, accessible titles like Gorilla Tag have captured massive audiences, redefining success in the ecosystem. Meta’s strategic pivot to promote Horizon Worlds, their flagship social platform, underscores this focus on engagement, retention, and download conversions over upfront revenue. As a result, the shift mirrors the transition seen in mobile app stores, where a volume-driven, freemium-dominated model replaced the console-style emphasis on premium, curated titles.

This holiday season highlights a turning point for the VR market. As Meta's platform matures, the ecosystem is beginning to resemble a mobile app store, prioritizing accessibility and scalability over exclusivity. For developers, adapting to this reality—whether through free-to-play models, social integration, or new monetization strategies—will be crucial for long-term success. Interestingly, this is positioned against other popular VR marketplaces like the PSVR2, where the expectation and status quo are still paid, premium experiences.

Sony’s New (Non Gaming) Headset

Sony's XYN XR headset represents a branching out from its core PlayStation VR (PSVR) consumer line into professional-grade AR/VR solutions. While the PSVR remains focused on delivering immersive gaming experiences to a broad consumer audience, the XYN XR headset caters to specialized industries like animation, game design, and engineering.

Unlike the PSVR, which emphasizes affordability and ease of use for gaming enthusiasts, the XYN XR is designed as a professional tool, integrating advanced spatial capture technology to create photorealistic 3D objects and enabling precise manipulation within virtual environments.

The XYN XR aims to tap into the rapidly growing markets for simulation, training, and productivity. By targeting applications such as industrial design, virtual prototyping, and professional collaboration, Sony is addressing the increasing demand for AR/VR tools that enhance efficiency and innovation across industries. This move positions Sony to serve not only entertainment but also the broader professional landscape, marking an expansion of its immersive technology into new and promising domains.

The XR market is reaching a critical inflection point, signaling its maturation as a platform for both consumers and enterprises. This evolution is not happening in isolation—it's being actively shaped by the Magnificent Seven type tech companies. These giants are driving an arms race in Augmented Reality (AR), which many believe will become the ultimate medium for immersive technology, transcending VR.

The maturation of the VR ecosystem is underscored by the shift in monetization models and user expectations. Meta’s pivot toward free-to-play games and its expansion of the Quest Store aligns with a broader strategic goal: fostering mass adoption by lowering barriers to entry. This mirrors the evolution of mobile app ecosystems, which grew exponentially when freemium models became the norm. For developers, this is a wake-up call—adapting to this new paradigm isn’t just an option; it’s a necessity for survival in an increasingly crowded marketplace, at least on the quest ecosystem.

At the same time, the Mag 7 companies are using VR as a proving ground while directing significant resources toward AR, which they see as the future of spatial computing. Meta’s Horizon Worlds emphasizes social integration and engagement, while Apple’s Vision Pro focuses on blending AR into daily life through seamless hardware-software ecosystems. Meanwhile, Microsoft and Nvidia are doubling down on industrial applications, from simulation to digital twins, using AR to enhance productivity and collaboration. Google’s XR project Moohan is likely a glasses formfactor end game. This race is not merely about owning the headset market—it’s about building the foundational ecosystems and technologies that will dominate AR in the years to come.

For more insights on XR, Gaming, and the Metaverse, follow JP Minetos on LinkedIn or @JPMinetos on X.