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Facebook's Acquisition of Oculus: A Necessary Evil?

By MrJenssen26-03-2014

Oculus Rift - Soon with 100% Facebook!

Oculus Rift - Soon with 100% Facebook!

What are your dreams worth? What is the value of a vision? For the talented team at Oculus, two billion dollars should do the trick. In a move that sent shockwaves throughout the gaming industry, Facebook announced yesterday that they had swiftly acquired Oculus and all its assets for a cool $2 billion. An indie company of brilliant engineers working at the spearhead of technological innovation, bought up by an enormous social media conglomerate notorious for their somewhat shady and occasionally downright intrusive business practices and often unclear motives.

It’s hard to see what these two companies have in common, why Facebook would want to buy Oculus, and why Oculus would want to let itself be bought by Facebook. It could be that Oculus were running out of funds, or that they were worried that the future of their ventures wasn’t clear enough. From Facebook’s perspective - a corporation that isn’t known for showing interest in innovative hardware - it’s even stranger. Could it be that Mark Zuckerberg is longing to take part in something new and exciting that’s also risky, but could potentially rapidly expand in popularity similar to how Facebook exploded back in the 2000s?

According to a Reddit post by Oculus founder Palmer Luckey, it’s all about the money, and how it makes their job a lot easier, and the product a lot better with more money.

“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.”

But what’s Facebook’s angle? What they specialize in, is creating enormous user bases, and expanding these. And that’s about all they do. What could Mark Zuckerberg possibly want from Oculus, so much so that it’s worth $2 BILLION to him?

What started as a garage project is now worth $2 billion.

What started as a garage project is now worth $2 billion.

If the business call made to Facebook’s shareholders is anything to go by, it seems Mark is willing to bet so much money on the prospect of virtual reality becoming a new platform, that has the ability to take over after smart phones becomes products of yesterday.

“Mobile is the platform of today, 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.”

But Mark, Oculus were already doing fine without you. They had hundreds of millions of dollars as result of the Kickstarter campaign and a good chunk of additional outside funding. Why not let Oculus do their thing in peace? Why do you need to meddle in the project to ensure that it becomes a “social” thing? Multiplayer gaming was already possible. Demos and modifications were available for early adopters of the DevKit to try out. The tech was already great. If all you intend to do with it is to develop social media software that runs on the Rift, then why not instead let Oculus make the Rift for themselves, and then work with it like any other third party developer - as opposed to buying up the whole operation? Or do you perhaps have more malicious intent?

The fact that they indeed got this over with so fast, before the media or anyone else got a whiff of it before the deal was already made, is interesting. It’s almost as if Facebook are aware of how loathed they are by so many, that if they had announced their intention of purchasing Oculus in advance, the uproar caused on the internet might have scared Oculus away from signing the deal. And if that’s the case, then they were right on the money. The Kickstarter campaign’s comment section is flooded with comments from angry backers who plunked down hundreds if not thousands of dollars for a project they believed in, that they felt they were taking part in. None of them asked for the company they helped create, to be sold off to Facebook without them seeing a single dime of it. Some well-known industry personalities also voiced their concern, like Minecraft-creator Markus Persson. His tweet was quite clear; he’s no fan of Facebook. He elaborated in his blog:

“I will not work with Facebook. 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. And I did not chip in ten grand to seed a first investment round to build value for a Facebook acquisition.”

I hope he loves VR enough to not let the money cloud him.

I hope he loves VR enough to not let the money cloud him.

The “ten grand” Notch speaks of is his $10.000 pledge to the Kickstarter campaign. He promptly cancelled his project to bring Minecraft to the Oculus Rift. Facebook “creeps him out”, apparently. It’s obvious that Facebook wants Oculus badly, and they’re just as speculative and cynical with this deal as they are with everything they do. Having sealed the deal so quickly, before allowing anyone to protest was a very smart move on their part. It seems it was a good deal for Oculus CEO Brendan Irebe as well.

“We locked ourselves in the Facebook HQ and just got the deal done really fast. To make this happen, and not disrupt the team. We don’t want to go through months of some kind of negotiations.”

So what can we, PC gamers, expect from this? Well, according to a very vague and very scripted-sounding business call to the investors, the goal is...still pretty unintelligible. Basically, the Oculus Rift has a lot more possibilities for the future. There’s talk of it being the next computing platform, or it being the first in immersive virtual reality social communication, blah blah. With all of the empty PR talk it’s hard to get a grasp on what any of the talking heads REALLY intend to do with the newly purchased company.

The good news is that both Mark and Palmer seem to agree that Oculus original goal of creating the Rift VR goggles for PC gamers will not change. Palmer mentioned it in his Reddit post, and Mark too made this clear in a post on Facebook.

“Their [Oculus’] technology opens up the possibility of completely new kinds of experiences. Immersive gaming will be the first, and Oculus already has big plans here that won't be changing and we hope to accelerate. [...] Oculus will continue operating independently within Facebook to achieve this.”

Bold ideas are not always good ideas.

Bold ideas are not always good ideas.

Whatever other schemes they have for the Oculus, will apparently have to wait until after the dream of building the perfect VR gaming kit has been realized. Could we really ask for more?

In the end, it’s easy to see why people are skeptical, even angry. It’s a pretty dubious deal that was made under everyone’s noses - including those who helped fund the project. But on the other hand, if it is indeed true that Facebook will stay out of Oculus’ way the extra money will come quite handy for the team. Like Palmer himself said, the team can now construct custom parts instead of relying on the limitations of the mobile industry. Palmer defended the acquisition, stating that it’s only a good thing in the long run. He claimed on Reddit that the acquisition makes it possible for them to significantly lower the purchasing price of the Rift goggles.

But...at what cost to the consumer? Facebook aren’t exactly famous for NOT making billions of dollars in some way or another, even on products that the user doesn’t strictly pay money to use. The whole deal and its potential is still shrouded in mystery, so I’ll just end it for now with a vague yet somewhat ominous quote from Mark Zuckerberg himself during the business call:

“We are clearly not a hardware company. We're not going to try to make a profit off of the hardware long-term. But if we can make this a network where people are communicating, and buying virtual goods, and there might be ads down the line. That’s where the business could come from.”


Comments (3)
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Posts: 1548

this is a really screwed up situation. I am very disappointed by the turn of events but I still want to believe that we might have something along the lines of what was promised. But I know better. It will all crumble.

Lets wait a bit and we will see the core engineering team leaving. Carmack left his own company after selling it to Bethesda, do you expect him to stay on Facebook?! Just you wait.

Posts: 166

Wow, they do a kickstarter project, get it funded and now they go and sell it to Mark Zuckerberg. If I backed this project I would not be happy.

Posts: 10