Sony announces Project Morpheus 6 days ago. Oculus sells to Facebook today and deal started 5 days ago (apparently).
This is either
a) Founders saw writing on the wall and decided to get paid early rather than have to compete with a company with much deeper pockets and a preexisting fanbase.
b) Facebook saw that Sony's announcement validated the space and decided to buy the company with most mindshare at the moment as it is an asset.
People have wondered why Microsoft didn't buy the company? Well, Oculus have seen what, $90M in funding so far? The investors would have wanted what.. 5X 10X ROI?
At 5X.. $450M is a metric fuckton (excuse the language) of money that they could throw at in-house development of something similar. I imagine having a VR kit that integrates heavily with Kinect has the potential to be huge, so they at least have to be thinking about it.
IMO it's not just the deeper pocket and preexisting fanbase, it's Sony's great relationship with the gaming industry (not to mention its high quality first party studios) that is almost impossible for Oculus to compete with. The founder then probably realized that gaming is no longer the main path Oculus should focus on. If the new strategy is to pursue a more broader application of VR then working with FB makes more sense than it looks.
As a gamer, though, I can hardly see any other application of VR having more potential to become mainstream than VR in gaming.
Tourism could be a huge application of VR. I want to visit about 1000x as many places as I'll ever be able to -- VR could be a big part of making that possible.
Even back before the Xbox One was announced people were digging up Microsoft patents on things like eliminating interference between "video headsets" and wireless controllers being used in close proximity. Thats a pretty late stage problem to be solving.
Also remember that Microsoft and Facebook have a pretty strong working relationship. This could be Facebook taking Oculus off the market in exchange for a bigger cut of ad revenues on Facebook search.
"Zuckerberg explained that he felt that Oculus represented an entirely new post-PC and post-mobile platform."
He's probably right. While Google and others are focusing on half-baked wearables as their key to the future, facebook just bought a huge chunk of the most likely successor.
You sound like Oculus owns some really valuable technology (they clearly don't own a 2B user base yet). But did sony spend $2B for R&D in their VR project? I doubt so.
Wrong. Google knows that there's immense potential in VR. It's just too early for them to get into it yet. The pushback from privacy advocates would kill any potential project.
That makes Palmer look even more like a greedy bastard, and that all he cared about was money all along. When he heard the $2 billion amount he was probably like: "So you want us to kill all of our gaming plans now, or should we wait a year to lay it easy on the fans?"
I don't think people should be too harsh on Palmer. He's still very young. To me it feels like Facebook bought this insanely cheap. It's $17bn cheaper than Whatsapp.
I'm sure there was some smooth talking involved in the deal. I couldn't help but think of the billion dollars scene from The Social Network[1] when I heard about the deal.
Serious question - why would he need any more money? And how certain would that have been?
I can't imagine anyone who hasn't been deep into "FU money" for a while actually choosing "perhaps far more than 2 billion later" over "2 billion now".
Where do people get off commenting about how someone should have turned down $2BN? Do you have an authoritative source that shows he had solid offers for hundreds of millions? Otherwise where do you decide that he's being a "greedy bastard"?
Even this article says they got "freedom to operate independently" - who knows, maybe it's true.
>> Venture capitalist Marc Andreessen, who sits on Facebook’s board of directors, recused himself from the negotiations.
I would really like to understand how these sort of conflicts of interest are dealt with and if they are investigated by the SEC/other government body...
To a not-so-knowledgeable person like myself, this seems like a bubble. Is it so hard to wire up some displays, optics and gyros? 2 billion? What could you do in-house or with a new team with, say 20 million?
That's like saying the iPhone is just a touch screen with a battery and a CPU.
VR has been nothing more than a pipe dream for decades. But the problem isn't just merely optics and gyros...it also needs to be lightweight and super-responsive in order to prevent headaches, motion sickness, and disorientation. And also I think there are some complicated things they have to do in order to simulate stereo vision.
These challenges are hardly trivial and there's still a lot that needs to be learned in order to refine the technology.
$2 billion is a lot of money, more than it would cost to develop from scratch. But, in the past, others have tried to perfect this technology and failed.
Facebook (or Apple or Google or Microsoft) could spend $2 billion developing their own VR hardware and easily end up with nothing more than vaporware. Occulus Rift has the benefit of being a real product that works...while only being a few iterations away from a consumer-ready product.
Thanks, that's a great response. Seems like higher refresh rates and better sensors could solve a lot.
Has everybody else except the few panel makers resigned on actually creating advances in display technologies? Seems theoretically OLED tech can go to 100,000 Hz.
People have been trying to get VR right for decades, and Oculus's developer units were probably the first remotely accessible devices to let you experience something that approximates good VR.
Reportedly the second-generation oculus devices are even better.
The criteria for 'good' here are things like low latency, good position tracking, low display persistence, etc. Getting those things wrong causes headaches, nausea...
> People have been trying to get VR right for decades,
Because display technology wasn't there yet. The thing that made Oculus possible wasn't some miraculous development at Oculus VR, but the fact that smartphones created a massive market of low-cost high-quality super-high-pixel-density tiny screens.
The cellphone market pushing displays forward was only one ingredient. Cellphones don't have low-latency, low-persistence displays, and they don't have the kind of specialized optics needed for a VR headset, and they don't do low-latency high-precision orientation/position tracking.
And certainly not multiple Cray 2 supercomputers with dozen-megabit/s multi-mile wireless networking accessing darn near the sum of human knowledge - in your pocket, costing a mere few days' pay.
Sometimes the "will never happen" is just waiting for someone credible and insightful to pull together off-the-shelf technology, commoditize some magic stuck in a lab, lead a team to weave it all together, and present the world with something everyone wants but nobody is willing to buy into until everyone else does.
A couple decades ago I had a Virtual iGlasses HMD. (Still have it. Anyone want it?) Sure it had its limitations, but the capability was phenomenal for the time ... alas, between the state of technology and nobody including support in suitable software, it went nowhere. Now we have the off-the-shelf technology to leverage (current dev kit is a mere $350), $2B to commoditize the magic needed, and Carmack to validate the implementation for universal buy-in and support.
The only thing missing is normalization of strapping opaque goggles to your face for prolonged periods while thrashing around on the couch.
I don't think that's true, especially since the internet's already facilitated most of "virtual reality". I can skype with people across the world, order anything I want and have it show up in days. I contest that "virtual reality" is basically already a reality.
But sure, if you keep moving the goalposts then I guess VR won't be a reality :|
You mean 2 Billion Dollars. That's a number beyond greed. That means you are taking care of you, your family, and your employees. Everyone can take the moral high road but if you were staring at a contract like that, could you really say you would turn it down?
You also have no idea of the terms. For all we know Oculus will still act as an independent agency only with better access to talent, much more capital access, and a huge advertising method-facebook itself!
Or they are devoured by facebook and never see the light of day. Either way, it's 2 billion dollars and all the financial freedom that comes with having that much money.
(Yes I know most of it's in stocks, but unlike everyone else I don't think people realize, facebook isn't going away in the next few years, they are a microsoft-a lumbering giant branching out through tech acquisitions).
> facebook isn't going away in the next few years, they are a microsoft
That was kind of my point. To quote a message I've posted before: Facebook is the new Microsoft, basically. Low on creativity and innovation, high on cash, riding to success a huge wave of demand that would have carried anybody else who just happened to be there at the right time.
So now you're the Oculus guys, and you're thinking "do I really want to be bought by this kind of entity?" The cash sure is nice, as you pointed out, but the nature of the puppet master is also important.
This is either
a) Founders saw writing on the wall and decided to get paid early rather than have to compete with a company with much deeper pockets and a preexisting fanbase.
b) Facebook saw that Sony's announcement validated the space and decided to buy the company with most mindshare at the moment as it is an asset.
People have wondered why Microsoft didn't buy the company? Well, Oculus have seen what, $90M in funding so far? The investors would have wanted what.. 5X 10X ROI?
At 5X.. $450M is a metric fuckton (excuse the language) of money that they could throw at in-house development of something similar. I imagine having a VR kit that integrates heavily with Kinect has the potential to be huge, so they at least have to be thinking about it.