Facebook buys Oculus Rift developer for $2 billion

[Syt]

http://www.theatlantic.com/technology/archive/2014/03/whats-oculus-rift-and-other-questions-about-facebooks-new-foray-into-virtual-reality/359612/

'What's Oculus Rift?' And Other Questions About Facebook's New Foray Into Virtual Reality

"The dominant reaction to the move could be summed up in three letters: WTF."

Late yesterday, Facebook made an announcement: It has acquired the virtual reality startup Oculus VR, the maker of the Oculus Rift headset, for around $2 billion in cash and stock. The news excited some in the tech industry, and confused many others. (As Alexis summed it up: "The dominant reaction to the move could be summed up in three letters: WTF.")

For those outside the industry, however, there was another question at hand: What exactly is Oculus Rift?

Below, some FAQs.

First things first: What's Oculus Rift?

It's a virtual-reality display used primarily, at this point, for gaming. The Oculus hardware features a headset that fits over the wearer's eyes, completely covering his or her field of vision. The interior of the headset—which, significantly, is much lighter than traditional virtual reality sets have been—features a screen that is easy to look at over long periods of time. The idea of the screen is to mimic, in 3D, settings of everyday life.

Here's one example of what an Oculus scene looks like—as seen through this crazily realistic representation of Jerry Seinfeld's apartment:

Does Oculus actually work, though? Isn't virtual reality more "virtual" than reality at this point? 

That's the thing about the Oculus: Its technology represents a significant improvement over previous, clunky incarnations of virtual reality. (Remember the disaster that was Nintendo's Virtual Boy?) VR may have been a pipe dream since the '60s and a joke since the '90s; Oculus Rift is promising to make virtual reality a desirable consumer product. And many critics think it can keep that promise.

In part, that's because Oculus VR's technology has managed to create digital spaces that resemble physical ones much more closely than previous VR devices have. The Oculus, according to Business Insider's Steve Kovach, "makes you feel like you're truly immersed in a virtual environment. It's one of those things you have to try to fully understand." In the words of another Oculus tester, "Oculus games make Grand Theft Auto or Call of Duty played on a TV look like Pong." Using the headset, furthermore, was "one of the most completely bizarre, wonderful, unique, laugh-out-loud, 'holy cow!' video experiences I have ever had."

As a result, the Oculus has been nominated for Best of E3 Game Critics Awards two years in a row, and in 2013 it won for "Best in Hardware/Periphery." Many critics claim that the device has "put virtual reality back on the map."

Any relation to Optimus Prime?

No.

But if Oculus is so great, then why do people seem so surprised that Facebook has acquired it?

Partly it's that Oculus, despite its popularity among gamers and its buy-in from the tech community, is still a small start-up. (It got its start on Kickstarter, where, in a 2012 campaign that sought $250,000 in funding, it raised more than $2 million. It remains one of Kickstarter's most successful campaigns.) And, furthermore, Oculus has been focused on what many have seen as a niche technology for a niche demographic—hard-core gamers.

Also worth noting is the fact that Oculus VR still hasn't actually shipped a product to the public. While Oculus has so far taken more than 75,000 orders for its headsets, those devices have been developer editions that have been aimed at getting developers interested adapting the Oculus technology. (This is similar to Google Glass's "Explorer" program.) The consumer version of the Oculus Rift won't likely be available to the broad public until late 2014 or early 2015. So Oculus has existed in a kind of VR-PR limbo: It's a product, but it's not yet a consumer product.

Does the Oculus Rift have competitors?

Yes, sort of. Just last week, Sony announced its own virtual reality headset, Project Morpheus. It's designed for the Playstation 4.

Sorry, but this whole thing sounds really nerdy.

It is.

So, okay: What does Facebook get out of the Oculus deal?

On the one hand, the Oculus acquisition should help Facebook to develop a better gaming platform—imagine, say, Farmville in 3D. (Or don't, because that's terrifying.) But on the other hand, and much more broadly, Oculus's technology should be able to help Facebook developers to create immersive virtual spaces that digitally mimic those of the physical world.

Here's Mark Zuckerberg, commenting on the acquisition:

After games, we're going to make Oculus a platform for many other experiences. Imagine enjoying a court side seat at a game, studying in a classroom of students and teachers all over the world or consulting with a doctor face-to-face — just by putting on goggles in your home. This is really a new communication platform. By feeling truly present, you can share unbounded spaces and experiences with the people in your life. Imagine sharing not just moments with your friends online, but entire experiences and adventures.

So, basically, you can read the Oculus acquisition as a signal on Facebook's part that it sees its future as infrastructural: It wants to host you (and your friends, and your family, and your acquaintances) in all manner of virtual spaces. It wants to keep you on its platform by digitally recreating the most fundamental platform there is: the physical world.

But Facebook is a social network. Why is it interested in helping us share "unbounded spaces and experiences" in the first place?

Partly, it's that Facebook seems to be betting that the post-mobile future of computing will involve virtual reality. The Oculus acquisition in that sense, as The New York Times put it, is "a bet that a technology commonly associated with science fiction can help eventually turn social networking into an immersive, 3-D experience."

And you know what immersive, 3-D experiences can be really good for? Advertising. In a call with reporters yesterday, Zuckerberg mentioned the potential Oculus offers for a virtual communication network—one that would not only allow people to buy and sell virtual goods, but that would also, down the line, represent a new ad platform for the social network.

There's also the broader value to Facebook, though: An investment in Oculus is one more way for Facebook to diversify its portfolio. It's a hedge, essentially, for the future. As Alexis noted yesterday:

All these moves are about technology companies looking to create businesses off the computer/mobile screen. In a world where smartphone sales growth is going to level off soon, where social networking growth has already slowed, where everyone already uses Google ... where do companies go to continue the revenue growth that is baked into their current share prices?

    Maybe they go after a share of TV money, or bet on the Internet of Things, or get in early with the explosion of consumer robotics.

    These massively valuable companies need to grab some land in whatever big technology wave comes next. And they are starting to buy where they think the fertile territory is.

One last question: Did Reddit really predict the Oculus acquisition a month before the news was made public?

Seems that way, yes. Perhaps Mark Zuckerberg should start wearing disguises on the way to and from his business meetings.

[Jacob]

I think this is less about gaming and more about tech in general.

I dunno, what do you guys think? Is Occulus Rift style VR something with mass appeal in gaming?

BTW, Sony premiered their own VR goggles at GDC - by all accounts it was better than the OR version 1 (though v2 also premiered at GDC).

[Syt]

Speaking for myself, I think this is definitely a product I'd be interested in, provided there were decent games for it. I think a disconnect would be the controls, because it would probably feel weird to control a person in a 3D environment with a controller, i.e. not being able to touch things and creating a sensory disconnect. Software where you interact with the environment by means of a craft of some sort (truck - EuroTruck Simulator 2 has Oculus support, plane, spaceship, battle mech), or where you merely observe, would feel more "natural", I'd think.

[garbon]

I don't think I'd be interested but then I also don't like first person pov games.

[Norgy]

I think this is less about gaming and more about tech in general.

I dunno, what do you guys think? Is Occulus Rift style VR something with mass appeal in gaming?

BTW, Sony premiered their own VR goggles at GDC - by all accounts it was better than the OR version 1 (though v2 also premiered at GDC).

Not really. I am old(er) than most of the gamers in the world, and also with such a screwed up mind that I wouldn't want an extra reality beside the one I already have.

But I do think the development is moving towards more "human" interaction via the web. Not sure if it's a good thing.

[Barrister]

I think this is less about gaming and more about tech in general.

I dunno, what do you guys think? Is Occulus Rift style VR something with mass appeal in gaming?

BTW, Sony premiered their own VR goggles at GDC - by all accounts it was better than the OR version 1 (though v2 also premiered at GDC).

I dunno - I can see that kind of super-immersive technology being a lot of fun for gaming, but not so much in interacting with technology otherwise.

[Razgovory]

I have frequently used facebook and thought to myself, "You know what would be better then reading all these inane posts by family members and sappy pictures of dogs, and bizarre rants by people I didn't care much for in high school?  If I could do it with enormous goggles on my head."

[Tamas]

So what if all Facebook wants is to have investments for the time when facebook.com will be a desolate empty place?

I don't get all the shrills. I mean, I guess it must be because of what somebody commented somewhere, that Oculus supporters thought they were this closed-in little community of elite tech people working for the betterment of mankind, and now suddenly they had to realize that the creators intended to make money with the whole thing. The Horror!

[Tamas]

Although I still want one by the time Elite:Dangerous is out

[Barrister]

I've seen a lot of hyper-negative feedback on this around the internet.

Myself though, while I don't know it's a decision I'd make if I were in Zuckerberg's shoes (as if!), I don't think it's completely crazy.  Facebook stock, after an initial decline after the IPO, has gone up quite a bit.  Zuckerberg therefore has a hell of a lot of currency to go around buying companies.  He also doesn't care that much about dilution - due to the way the stock is structured he retains control despite being only a minority shareholder.

So, he's simply going around buying companies he thinks will be quite valuable.  It doesn't have as much to do with "integrating it into Facebook".  Instagram's not integrated into Facebook, and it's not clear if WhatsApp will be either.

[The Brain]

To quote Beneath A Steel Sky: "Not that old turkey!"

To quote Sam & Max Hit the Road: "This is virtual reality? I may be sick."

And that was 20 years ago.

[Jacob]

My take:

As a gaming platform OR will likely be niche. Sony's VR has a better shot at reaching a broader market, but it's 50-50 at best. To be successful, you need developers, and it's not attractive to develop for a peripheral that not everyone has unless someone throws lots of money at you (at first) or the peripheral proves a very lucrative target (later). It's conceivable either that someone could build a marketplace for VR goggles that's as attractive to developers as the iOS app store is; similarly, it's conceivable that someone will come out with an early blockbuster game that both makes tons of money (proving to developers that the platform is viable) and makes the peripheral a must-have for consumers (thus making the market more viable) and generally making it a sexy thing. On balance I think it's more likely that that doesn't happen than that it happens.

So for gaming, it might be a viable strategy for a competent indie developer to pursue to make a name and be first-in-class in a market with attention, but I'd see it as a stepping stone to bigger things (or an acceptance that you're staying in your niche).

Technology wise... well, there's already talk of VR contact lenses being inbound in the next several years, which would render the goggles clunky. While I'm not super convinced of the entertainment value of 3D as it stands, I imagine there can be a number of military, industrial, and other applications. Maybe there'll be other entertainment applications further down the line; as someone said on my facebook feed, imagine the porn industry in 10 years if VR becomes common now. It's certainly not impossible that some VR interface becomes the next smart-phone like thing in terms of social change and must-have gadget, and it's certainly possible that whatever shape that takes that it may draw on OR research and - importantly - patents. So I expect something to come of it, down the line. But games? Right now? *shrug*

[Razgovory]

I won't be getting one, but then I won't use a laptop and think that a wireless mouse is witchcraft.

[Jacob]

... I just realized that maybe OR doesn't have much in the way of patents. Hmmm

[Zanza]

I get motion sickness in POV games, so I doubt I'll ever get something like this.