Wall Street cornered Mark Zuckerberg on Wednesday, asking when Facebook will make money from virtual reality.
Facebook told investors Wednesday that it is still a decade away from reaching its virtual reality goals. Stifel analyst Scott Devitt asked if Zuckerberg could explain the "friction points that are keeping [Oculus] from a more accelerated commercialization path."
In response, Zuckerberg noted that Oculus was "a little behind" and timing was a "disappointment," but touted the strength of....Samsung.
Zuckerberg also subtly compared his competitors to BlackBerry, versus Apple, which just sold its billionth iPhone this year.
"You know, I think there are parts of this that are on a good trajectory, and parts where we're a little behind, where we would want to be. I think Samsung shipping 5 million Gear VRs — that's their product, not ours, but we build technology that powers it. I think that's quite a good result, and one that we're very happy with. It just shows how strong of a company that Samsung is, being able to build these products and sell them through into the world.
"On the side of the products that we built, Rift and Touch, were both a little delayed, so that was obviously somewhat of a disappointment. And if you want to accelerate development, obviously, we need to get the product to the market at a good pace.....
"But I don't think there really is a strategy to pull this in from 10 years to five. I just think it's going to be a 10-year thing. The analogy I always use is, the first smartphones came out in 2003. The BlackBerry and Palm Treo, and it took 10 years to get to a billion units. I don't know if there was something folks could have done to make that happen fast. But I think that was pretty good. And if we can be on a similar trajectory of anywhere near 10 years for VR and AR, I would feel very good about that....
"I would ask for the patience of the investor community in doing that, because we're going to invest a lot in this and it's not going to return or be really profitable for us for quite a while."
Zuckerberg's comments come after Facebook lost a $500 million lawsuit alleging that Oculus stole another company's intellectual property, although Facebook will probably appeal. The ruling came out on Wednesday just before Facebook's earnings crossed.
Facebook's doing just fine in the meantime. It reported better-than-expected earnings on Wednesday, as advertising revenue rose 53 percent, and the lawsuit is "not material" to the company's financials, Facebook's Sheryl Sandberg told CNBC.
But while there are plans for more social content and immersive educational experiences this year, Zuckerberg said it will be 10 years before Facebook can solve its "chicken-and-egg problem" with Oculus.
"In terms of the content development, I actually think that's coming at a reasonable clip," Zuckerberg said. "Early on, there is this issue that if you're a triple-A game developer, until there's a certain volume of units in the field, you're not going to be able to make enough money to fund your game development, just based off of people buying your content. So that's why we're investing so much capital in content, to seed the ecosystem and solve this chicken-and-egg problem."
— CNBC's Michelle Castillo and Julia Boorstin contributed to this report.