At the start of this year, I wrote about Meta and how user retention rates on its Oculus Quest headset are essential for the company going forward.

One can assume that a company that changes its name to Meta suggests it is squarely focused on the metaverse, and sees it as the future.

Luckily for Meta, its Oculus brand mentions skyrocketed over the holiday period, with the Oculus app shooting to the top of the App Store and Google Play charts at one point.

Great news for Meta at the time…

But, as highlighted, headset sales alone are not enough.

Jon Carmack, Chief Technology Officer of Oculus VR, had explained that the company sells the headsets at a loss or breakeven.

So what does Meta need to make its VR products a success? 

User retention. 

Keeping users engaged in the product is the key for the company and something it has struggled to achieve so far.

Logically, this is something Meta is looking to address, previously testing out the launch of the virtual reality version of the game "Resident Evil 4."

Furthermore, Zuckerberg said recently that the company is testing tools that allow creators to sell virtual assets on Horizon Worlds, its free virtual reality video game in the U.S. and Canada.

While it is yet to be seen whether the tools being tested will work, recent consumer data suggests Meta’s metaverse is struggling to retain users… 

Usage Tumbling

In the chart above from SimilarWeb, you can see the Oculus app usage rank on the Google Play store for the last 28 days…

Not good. Usage has tumbled since the initial Christmas frenzy.

In fact, according to the data, its usage rank is now at 459 across all categories.

For the iOS App Store, Oculus now ranks all the way down at #187… a swift fall from its peak as the number 1 app over the holiday period.

In the entertainment category alone, the company is performing reasonably well, ranking at 17 on the App Store and 25 on Google Play (rankings are for the US only).

The recent decline in app usage data aligns with a key trend we track at LikeFolio — Virtual Reality Usage Mentions.

After a surge from late October to late January, consumer mentions of using virtual and augmented reality products and games are now on the slide, trending at -37% QoQ, with year over year numbers pulling back to just 48% growth.

Back in January, Facebook leadership said there were plenty of headsets in closets or ones that are not regularly being used, describing the buyers as "lapsed VR users." 

Clearly, this remains a problem for Meta’s flagship VR brand. 

Consumer Demand Waning 

LikeFolio’s Consumer Purchase Intent tells a similar story…

The rise through the Christmas period has been met with a decline soon after.

In the chart below, we can see just how sharp that decline is…

Consumer demand levels for Oculus VR headsets are currently trending at -67% QoQ...