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Forget the kneejerk reactions, Facebook's acquisition of Oculus gives VR another shot at the mainstream

Matt Gardner
Facebook, Oculus, Oculus Rift, Tech, Virtual Reality, VR, VR headsets

Forget the kneejerk reactions, Facebook's acquisition of Oculus gives VR another shot at the mainstream

Yesterday, a cash-rich Silicon Valley leviathan paved the way for the acquisition of a plucky startup. As surprising as Facebook's pending purchase of Oculus might have seemed last night, that's all that really happened. As announced last night, is set to be bought by Facebook for approximately $2 billion USD, with the transaction due to take place sometime later this year in Q2 2014.

First up, the official quotes. Here's what Mark Zuckerberg and Oculus CEO Brendan Iribe had to say about the coming acquisition:

“Mobile is the platform of today," said Zuckerberg, "and now we’re also getting ready for the platforms of tomorrow. Oculus has the chance to create the most social platform ever, and change the way we work, play and communicate.”

“We are excited to work with Mark and the Facebook team to deliver the very best virtual reality platform in the world,” said Iribe. “We believe virtual reality will be heavily defined by social experiences that connect people in magical, new ways. It is a transformative and disruptive technology, that enables the world to experience the impossible, and it’s only just the beginning.”

And the internet went crazy.

Forget the kneejerk reactions, Facebook's acquisition of Oculus gives VR another shot at the mainstream

The Oculus Rift as a gaming device has enormous potential, and I've waxed lyrical about how awesomely immersive an experience the device can offer. But for VR to be a mainstream success, it needs to look beyond games and that is hardly a new concept. Look at the media hubs that our consoles have become, the connected experiences offered by the tiny computers each of us carries in our pockets. There are reactions to this news declaring the gaming applications for the Rift dead in the water as a result of this news, but they rather sound like nonsensical tantrums fuelled by anti-Facebook hate. The key to all of this is independence -- how much leeway will Oculus be given to continue as they have done, albeit with greater financial security, resources, and opportunities?

If the initial soundbites are to be believed, it looks like there'll be a fair bit of autonomy.

"I kept coming back to a question we always ask ourselves every day at Oculus: what’s best for the future of virtual reality?" wrote Oculus co-founder and Rift designer Palmer Luckey. "Partnering with Mark and the Facebook team is a unique and powerful opportunity. The partnership accelerates our vision, allows us to execute on some of our most creative ideas and take risks that were otherwise impossible. Most importantly, it means a better Oculus Rift with fewer compromises even faster than we anticipated.

"Very little changes day-to-day at Oculus, although we’ll have substantially more resources to build the right team. If you want to come work on these hard problems in computer vision, graphics, input, and audio, please apply!

"This is a special moment for the gaming industry — Oculus’ somewhat unpredictable future just became crystal clear: virtual reality is coming, and it’s going to change the way we play games forever.

"I’m obsessed with VR. I spend every day pushing further, and every night dreaming of where we are going. Even in my wildest dreams, I never imagined we’d come so far so fast.

"I’m proud to be a member of this community — thank you all for carrying virtual reality and gaming forward and trusting in us to deliver. We won’t let you down."

That third paragraph is very telling, and it brings with it the idea that Oculus was never best placed to do this on itsown. A buyout was always going to come, the only question in the end would be who. Facebook, of course, will be concerned with social applications and the way we interact with one another, but it looks like Oculus will continue to run the way it has before, just now under a big blue banner. Facebook is not a VR company, they cannot afford to ignore the expertise that Luckey and John Carmack and the rest of the Ocuslus team will bring to the table. Indeed, they're not talking about that at all; they're talking about embracing it and flinging bundles of cash its way.

Forget the kneejerk reactions, Facebook's acquisition of Oculus gives VR another shot at the mainstream

"Oculus's mission is to enable you to experience the impossible. Their technology opens up the possibility of completely new kinds of experiences," said Zuckerberg.

"Immersive gaming will be the first, and Oculus already has big plans here that won't be changing and we hope to accelerate. The Rift is highly anticipated by the gaming community, and there's a lot of interest from developers in building for this platform. We're going to focus on helping Oculus build out their product and develop partnerships to support more games. Oculus will continue operating independently within Facebook to achieve this."

That's good news! That's the news we all want to hear. Sure, he also went on to describe virtual storefronts and commercial opportunities, but as long as that's not all that Oculus becomes, that's fine. Commercial application, not mention the possibility of donning a Rift and sitting courtside at an NBA game, or being transported to look around the Seven Wonders of the World in a classroom, or having a face to face chat with your doctor when you're miles from one another -- these are all possibilities. Sony mentioned that there'd be applications beyond gaming for Morpheus, and this ios no different. In fact, it's essential. For VR to be anything more than a pipedream, it has to break beyond video games.

That doesn't mean abandoning games.

But that hasn't stopped the backlash and kneejerk reactions starting already, from doomslingers on the Reddit boards to high profile abdications. Fans are in uproar over perceived betrayals by the company, failing to grasp that donating to a project on Kickstarter does not make you an investor. You paid for your Rift, and you got it. Oculus owe you nothing. Notch has announced that there's no way an official Minecraft Oculus project is happening now, because he finds Facebook "creepy". That mistrust is understandable -- after all, Facebook is the poster child for privacy scares and data scandals these days -- but one can't deny the pioneering development that Facebook and its initiatives have given us as well. Luckey himself admits to being sceptical when the possible acquisition was first tabled, but there's a chance here -0- one that comes with caveats -- but one that was clearly too good to pass up.

Forget the kneejerk reactions, Facebook's acquisition of Oculus gives VR another shot at the mainstream

"When Facebook first approached us about partnering, I was skeptical. As I learned more about the company and its vision and spoke with Mark, the partnership not only made sense, but became the clear and obvious path to delivering virtual reality to everyone. Facebook was founded with the vision of making the world a more connected place. Virtual reality is a medium that allows us to share experiences with others in ways that were never before possible.

"Facebook is run in an open way that’s aligned with Oculus’ culture. Over the last decade, Mark and Facebook have been champions of open software and hardware, pushing the envelope of innovation for the entire tech industry. As Facebook has grown, they’ve continued to invest in efforts like with the Open Compute Project, their initiative that aims to drive innovation and reduce the cost of computing infrastructure across the industry. This is a team that’s used to making bold bets on the future."

Does that mean that Faculus... Foculus? Faceboculus? FaceRift? gets a free pass? Absolutely not. But neither should we pour scorn onto what is really a fairly standard business dealing. As with every venture that leads to a big company buying out a small company, there are always risks, yet the initial chatter suggests that little is actually going to change in terms of personnel (save for the capacity to hire more talent) or vision. But VR is going big or going home, Oculus has always maintained its desire to see VR become a mainstream medium for as many as possible. Now, with billions of dollars at its back, that might just be within reach.

This will not be a sprint, the consumer Rift is still some way off, but for VR to be more than a flash in the pan or a niche consideration, it needs an environment where a long-term strategy can flourish. Sony have and are incubating Morpheus within a system that affords their headset established software, brand loyalty, and connected, optimised devices to set it up for as strong a future as possible. The Rift has the potential to go further thanks to the open nature of development on the system. That won't change -- the potential just got bigger and broader, and writing that off here and now makes no sense at all.

Add a comment3 comments
Late  Mar. 26, 2014 at 13:01

The directors have made a cubic f*cktonne of money and can now live on their own private islands in the sun.
Makes sense to cash out now, before Sony and Microsoft (and probably others, such as Valve and Razer) bring out VR devices in the next couple of years. If Sony and Microsoft's headsets do really well then the Rift will lose market share. If Sony and Microsoft's headsets don't do well then the Rift becomes a market leader in a failed tech. It's a good move to get out of the race with as much money as possible - and I assume they got as much as they could.

I do wonder if it would've made sense for Microsoft to acquire Oculus though.
Not because they want or need Oculus' research - I'm sure they're proceeding nicely with their own - but because there's (some) awareness of the brand, there's been a lot of work done on re-coding a good few pc games to work with the tech, and Microsoft like to own technology that will integrate with both PCs and xboxes.
These headsets aren't going to be cheap when they hit the market*, and it's an easier sell if your device is compatible with both console and pc.
I'm sure their own headset will do all that, but maybe it's a missed opportunity. Or maybe they've saved themselves two billion dollars by not spunking it on a technology that's not really any different to what they've already built...

And I'm sure that whatever brand of VR you buy into, if any, you'll find it's full of adverts beamed directly into your eyeballs within two years of release. Suddenly it's clear why Facebook want a piece of it.

*Naturally, if the tech is as good as it's promised to be we'll soon end up with every household having several headsets; and the living room will have mum, dad, and the kids all sat there sporting something akin to Stevie Wonder's diving goggles.
And a few years after that it'll be AR/VR contact lenses (at which point the trendsetters will be laughing at those wearing headsets). Gotta love the march of technology!

Drago_MkII  Mar. 26, 2014 at 18:51

Well, I never donated to the Oculus kickstarter since I didn't know anything about it while it was on. I was quite interest in the rift though but I would be rather hesitant now, I'd really rather not give any of my money to Facebook. Or google, if that had been how it went down.

This comment from a reader on a Kotaku article about people demanding their money back pretty much sums up how I would feel about the whole thing if I had donated though.

"While that is one way of looking at it, remember that kickstarter is not an online retailer, and you are never buying anything on it. Those backer rewards are incentives, nothing more. When you donate to a kickstarter you are saying that you believe in someones dream, and you want to help them achieve it. There is an social contract, if not a legal one, that says that the receiving party will use the money in good faith.

When someone cuts and runs, or when they change the plan, or when they sell out - they break that good faith, they break the social contract, and this isn't ethical. Legal? Sure. There is absolutely no legal recourse, and nobody should be expecting any such thing. No backers are not share holders, No backers have no say (unless stipulated in a perk), No backers should not expect anything more than promised. But with that being said, ethically there is an important relationship.

When Oculus sold out to Facebook they did so in bad faith, for a backer to say "I wish I had not donate to this" is perfectly reasonable. Now if anyone out there thinks that for some reason they are actually entitled to a refund - you're a moron. But being upset is totally justified - and it's important. It's very important to remember that regardless of what is lawful, what is right is still going to matter. Selling to Facebook is directly the opposite of what the backers were giving their money too. Facebook has always had this "**** you, I'm going to do my thing my way and **** you if you don't like it - I will make you like it" attitude. Where the whole crowd funding concept has been the opposite - it's about people coming together to make dreams come true, it's about letting the little guy with a brilliant idea shine. Nothing about facebook fits with the ideals behind Kickstarter. Hell, they probably have sold to a dozen other companies and nobody would have blinked - but Facebook? No.

It was unethical. There is no recourse, nor should any have been expected - but that doesn't make it right."

MethicalHead  Mar. 27, 2014 at 15:59

"When you donate to a kickstarter you are saying that you believe in someones dream, and you want to help them achieve it."

And to reserve the right to put limits on that dream?

Regardless of reason, those pledges surely helped Oculus on the road to achieving that dream. But now what? The kickstarter money is likely all used up. Venture funding is there, but *very* expensive; those investors expect steep returns, and a company that fails to return can be mercilessly bought out and sold off. Then what of that dream?

We can't be sure at this stage that Oculus is able to successfully launch a consumer product, with all of the scale, fanfare and hard work that requires. Without the necessary funding, they could experience manufacturing delays, shortages, aggressive component stock purchases by rival (Sony?) companies, bad PR and/or advertising, and worse.

Let's not forget that the product might just not sell. Maybe there are only a few people interested in buying. We don't know yet.

But, I just can't see how a move such as this - which aims to keep the company and its dreams alive beyond the tiny KS and VC funding, and possibly alive even beyond their first commercial iteration (regardless of its success) - can be seen as unethical.

Also consider that Oculus would certainly have had many such offers on the table for some time. No doubt Microsoft, Apple, Google, and other heavyweights all approached, all with their own sets of terms and conditions.

I'm inclined to believe that FaceBook won that bidding war via the quality of those terms and conditions, and not just on the dollar figure. After all, it's quite likely that the other offers had similar value attached.

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