Virtual reality (VR) pioneer Palmer Luckey is leaving Facebook (FB), nearly three years after the social network paid $2 billion to acquire Oculus, the company he co-founded.

Luckey’s role at Facebook was clouded in uncertainty and he had kept a low profile since he became embroiled in controversies. It emerged in September that he secretly made a $10,000 contribution toward a pro-Trump Reddit group that circulated memes mocking Hillary Clinton. Oculus was also fighting a lawsuit that alleged it stole trade secrets. In February, it was ordered to pay $500 million after a court decided its executives violated a non-disclosure agreement. Luckey was eventually passed over for the role to lead Facebook’s VR drive, which was instead given to an external candidate, Xiaomi’s Hugo Barra, in January. (See also: Did Facebook Just Turn Virtual Reality Mainstream?

Facebook’s Oculus Acquisition Flops

Luckey’s departure might also have been motivated by a series of missteps within Facebook’s VR subsidiary. Early sales of Oculus headsets, which Luckey helped to pioneer, have fallen well short of expectations, due in part to delayed shipments and several software bugs. Oculus has since cut the price of its Rift headset in a bid to energize demand.

When Facebook acquired Oculus three years ago and brought on board Luckey, the man credited for reviving interest in VR, the social network was seen as the leading player in the market. (See also: 3 Reasons Facebook Is Interested In Oculus Rift.)

An industry rush to invest in the technology soon followed. Rising competition from the likes of Google (GOOGL) and Microsoft (MSFT), coupled with an exodus of staff and general mismanagement at Oculus, eventually saw Facebook lose market share. Games publisher Valve, and Sony (SNE) reportedly outsold Oculus’ Rift headset last year.

Virtual Reality: A Fad or the Real Deal?

According to data from the International Data Corporation, total headset device shipments will increase by nearly ten-fold in 2021 to 99.4 million units, representing a compound annual growth rate of 58 percent. That exciting forecast appears to justify Mark Zuckerberg’s decision to continue investing in the technology.

Should VR live up to its expectations as the next big computing platform, the likes of GoPro (GPRO), Intel (INTC), Apple (AAPL), Qualcomm (QCOM), Disney (DIS) and Nvidia (NVDA) also look likely to benefit. (See also: 10 Stocks That Stand to Benefit From the Rise of Virtual Reality​.) 

 

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