A shorter newsletter today given the usual holiday slow down. If you're celebrating Thanksgiving this week, I hope you get a chance to slow down too and relax for a bit.
Fit for the job
In the course of the Federal Trade Commission's attempt to block Meta's ~$400 million acquisition of Within, the agency's argument shifted a while back on a key point: though Beat Saber gets users working up a sweat, it's not a fitness app. That doesn't help make the case that Meta buying Within for its VR fitness app Supernatural would be anticompetitive.
But as Bloomberg was first to report, a new filing contends that Meta had considered expanding Beat Saber into a fitness app, then pulled back before moving to acquire Within in early 2021. The FTC is now angling to show that Meta planned to and could have made an "organic" entry into VR fitness and that buying Within therefore lessens actual and perceived potential competition. The suit has been viewed by critics as a long-shot for the FTC since the start. Now the outcome might hinge on these discussions around Beat Saber.
If you haven't been following all the back and forth, here's a quick rundown: after Meta and Within announced their agreement a day after Meta's rebranding, the FTC began an in-depth probe. The FTC sued in July, later dropping Meta CEO Mark Zuckerberg as a defendant and narrowing its claims to focus on potential anticompetitive effects in VR fitness should the deal go through. Meta filed to dismiss the FTC's complaint in October and has stood by the arguments in support of the Within deal that it made publicly earlier this year.
In late July, Meta stated that it had "looked into building a fitness-specific service" and decided that it was not "in a position to do so." Based on the new FTC filing, and setting aside other questions–like whether Within worried Meta might compete or if Meta just wanted to nab Within before Apple could–it's worth wondering how Meta could find incidental fitness success with Beat Saber and yet conclude that expanding from there was a nonstarter.
Cue this line from Meta's recent opposition filing that made the rounds on Twitter last week: "Meta has no fitness expertise, limited and non-fungible VR engineering resources, and no history of successfully building VR apps from scratch."
There's an idea here worth chewing on besides the seemingly harsh dismissal of the VR apps Meta has created in-house. Beat Saber was already a hit when the Beat Games was made. At the time I even called the studio "about as attractive an acquisition as you can get." For all that's changed since the acquisition, the core appeal and gameplay of Beat Saber remains the same. That's a hands-off, if it ain't broke, don't fix it approach that might reasonably follow from Meta's struggles to find success with VR apps internally.
Fast forward to fitness. If you'd like, you can find the FTC's proposed findings of fact right here courtesy of Free Law Project's CourtListener. Pages 24 through 28 cover the arc of the Beat Saber discussions. Though this filing is heavily redacted, it points Meta talking for months about the notion of working Beat Saber into plans "to get serious about doing something big in fitness."
We may never find out how close Meta really was to changing course with Beat Saber before moving to buy Within, but that may end up being the heart of the matter here. If Meta can make the case that these Beat Saber discussions amounted to little–and perhaps that they resulted in Meta recognizing that it shouldn't mess with a successful rhythm game it didn't build in order to chase fitness usage–then it's likely to score Within and a win over the FTC.