On Monday, Facebook owner Meta Platforms (NASDAQ:META) launched a virtual reality (VR) subscription service for its Quest headsets.
As it tries to make its VR headset business profitable, the company said users can pay $7.99 a month or $59.99 for an annual subscription and receive access to two new games a month. The company said Meta Quest+ is available for owners of the Quest 2 and Quest Pro headsets and is forward-compatible with the Quest 3.
The social media giant is facing competition from other tech giants, including Apple (NASDAQ:AAPL), in the mixed-reality headset space.
Reacting to the news, BofA analysts, who have a Buy rating and $320 price target on Meta, said the Quest+ service is modestly priced, but given the limited number of VR gaming and Quest users, they "don't expect any material revenue impact over the next few years."
"According to WSJ, Meta's Quest platform had approx. 6.37mn MAUs as of Oct '22. Assuming 9mn Quest users by 2024 and a strong, 20%, adoption of Quest+ subscription at an average price of $70/year, yield approx. $126mn in additional revenues," they explained.
"In addition to Meta Verified and Quest+, we think Meta can introduce new services offerings for businesses, leveraging its AI capabilities. The company already has an enterprise messaging subscription offering with WhatsApp for Business API and we see opportunities for content and customer service offerings (through messaging) to help Meta diversify its revenue base," they added.