Facebook

Oculus Gains Facebook’s Resources—and the Ire of Its Supporters


Peter Mason tries the Oculus virtual-reality headset at the Game Developers Conference in San Francisco on March 19, 2014

Photograph by Jeff Chiu/AP Photo

Peter Mason tries the Oculus virtual-reality headset at the Game Developers Conference in San Francisco on March 19, 2014

Virtual reality has always been the domain of a small number of hard-core fans. Now Oculus VR, the darling of this community, has sold itself to Facebook (FB), the tech company whose mission is total ubiquity. And people are pissed.

Oculus fans across the Web were quick to complain that the company has sold out, that the alliance with Facebook will ruin its product, and that Oculus should repay the $2.4 million it raised in its original crowdfunding campaign. “I think I would have rather bought a few shares of Oculus rather than my now worthless $300 obsolete VR headset,” donor Carlos Schulte wrote on the company’s original Kickstarter page, in a mild version of the prevailing sentiment. “What’s two billion dollars amongst 9,522 friends? I’d be happy with my $300 back.”

Rage is one of the typical stages following a Facebook acquisition, and Oculus must have assessed the trade-offs. While the social network has no more experience launching consumer devices than Oculus, the smaller company can surely use Facebook’s resources. It isn’t close to unveiling a product that can be used by customers, and it’s even been having trouble fulfilling demand by developers. Chief Executive Officer Brendan Iribe said last summer that he wanted to find a way to fundamentally change the economics of the device.

“The lower the price point, the wider the audience,” Iribe told gaming website Edge in an interview. “We have all kinds of fantasy ideas. We’d love it to be free one day, so how do we get it as close to free as possible? Obviously it won’t be that in the beginning. We’re targeting the $300 price point right now, but there’s the potential that it could get much less expensive with a few different relationships and strategies.”

There’s always a trade-off when a business gives something away for free. Facebook is adept at this exchange, which is what makes people so nervous. Oculus may find it easier to manufacture and price its headsets with Facebook’s help, but this is a delicate time for the company. It’s facing increasing competition, primarily from Sony (SNE), which now has a virtual-reality prototype called Project Morpheus for the PlayStation 4.

These companies will be racing to convince users that virtual reality is worth their while, but they also want people to develop the games. Part of Oculus’s success has been the sweeping enthusiasm it has inspired among people who make video games. Developers do not have the same feelings about Facebook, and Oculus is facing at least a few defections.

Markus Persson, the creator of Minecraft, immediately said he would stop working on a version of the game for Oculus, arguing that the company’s main priority is not gaming. Facebook, says Persson, has left developers in the lurch by tweaking its site to make more money from advertising.

“I definitely want to be a part of VR, but I will not work with Facebook,” he wrote on his blog. “Their motives are too unclear and shifting, and they haven’t historically been a stable platform. There’s nothing about their history that makes me trust them, and that makes them seem creepy to me.”

Brustein is a writer for Businessweek.com in New York.

Hollywood Goes YouTube
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

Companies Mentioned

  • FB
    (Facebook Inc)
    • $74.82 USD
    • 0.96
    • 1.29%
  • SNE
    (Sony Corp)
    • $19.11 USD
    • 0.21
    • 1.1%
Market data is delayed at least 15 minutes.

Sponsored Links

Buy a link now!

 
blog comments powered by Disqus