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The Oculus Facebook Deal Risks Alienating its Supporters

26 Mar 2014  by   Peter Parrish
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oculus facebook

There are a lot of unhappy nerds in the world today. Even though I wasn’t sufficiently on board with VR to actually own an Oculus Rift developer kit, I’m still counting myself among them. My draft headline for this piece was just “Facebook and Oculus, fucking hell” which probably isn’t ideal for search engines but pretty much reflects my reaction to the news that Mark Zuckerberg’s private data harvesting empire had purchased Oculus for $2 billion USD.

It almost seems like a bad joke, or the sort of thing we toss around on the IncGamers Podcast during off-topic flights of fancy. Hey, what’s the worst possible thing that could happen to Oculus? A massive, invasive investment from a corporation that uses the word “monitization” in earnest. Ho ho … oh.

Facebook and Oculus’ major problem is that most people hearing this news aren’t thinking “oh cool, I wonder what they’ll do with this,” but “oh shit, what are they going to do with this?”

oculus rift

If you bought one of these, you may own a little piece of history.

Back in the halcyon days of 24 March before we knew about the deal, the Oculus Rift was a technological device full of potential for gaming. It had a pseudo-relationship with Valve, and both parties seemed excited about the concept of ‘presence’; the sensation of being transported to another place. That’s a pretty big deal for games. Consider how thrilling it was to be visiting places like Rapture, Lordran or Venice in Assassin’s Creed 2 for the first time, and imagine similar sensations through the medium of VR (not that I’m saying Dark Souls would work as a VR game, but that kind of atmosphere could be accentuated.)

Today though, it’s about “the next social and communications platform,” it’s about “making the world a more connected place” and, of course, most of all it’s now about “how Facebook will monetize the acquisition.”

Facebook is already floating some ideas. “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,” all while logged in to Facebook, of course. And what better company to share all of these activities with? I can’t wait to have my medical history leveraged for cash and sold back to me as targeted advertising.

Maintaining a semi-active Facebook account for when it’s absolutely necessary to get in contact with someone else who uses it is just about tolerable, but I certainly don’t want to go any deeper than that.

facebook oculus (2)

This probably isn’t the ideal scenario. I’d love to credit this image, but I have no idea where it originally came from.

This acquisition came as a huge surprise to many, but in light of some of Oculus’ earlier activities perhaps it shouldn’t have. Oculus had already sold out to investors back in December of 2013. The $75 million USD invested by Marc Andreessen’s venture capital firm dwarfed the amounts raised on Kickstarter, and almost certainly involved giving up substantial controlling interests in the device. Investors don’t just chuck $75 million USD at you expecting nothing in return.

And that Marc Andreessen chap? He just happens to be on the board at Facebook. First he takes indirect control of Oculus via a (relatively, in his terms) small cash investment. Then Oculus is sold to Facebook for $2 billion USD ($400 million in cash, the rest in Facebook stock) and Andreessen becomes an even richer man than he was yesterday.

Good for him, and good for the Oculus management team who can now join the ranks of the famously well-adjusted and in-touch millionaire class. Though you have to wonder how the ultra libertarian John Carmack is feeling today about becoming a de facto employee of one of the worst violators of user privacy this side of the US National Security Agency.

Bad luck if you were a Kickstarter backer hoping to show some support for a creative new gaming idea. Turns out all you were doing was giving them a leg up to become the plaything of some technology billionaires. Such is the luck of the Kickstarter draw.

facebook oculus (1)

Inevitable.

But aside from self-writing jokes about virtual FarmVille, what is Facebook likely to do with the Oculus Rift? The public face of both Oculus and Facebook is busy assuring people that the company will be left alone, to operate semi-independently. In calls to shareholders, however, Facebook is already making it very clear that it has the intent to “monitize” the device with all the greedy vigour that term implies. That means virtual “product” purchases and advertising galore.

The worst case scenario is probably a closed “app store” style system where game (or social experience, or whatever) creators give a cut of every sale to Facebook. You can be sure that in this system, data would be mined and harvested and beamed back to Facebook at every possible opportunity, in order to be turned into advertising revenue under the guise of “personalising” your virtual “experience.”

Best case? They really do leave Oculus alone and the company uses its mad investment cash to implement all the bits and bobs crucial to a solid virtual reality experience Valve was talking about at Steam Dev Days. The Rift goes mainstream and hundreds of game developers clamor to contribute the next life-altering VR game. With Facebook’s history and dubious motives, I have serious doubts it will play out like this.

The Instagram purchase brought Facebook a huge user base. It could afford to somewhat leave the application alone because it got what it came for in the form of millions of people in a passionate, dedicated and “connected” community. It also crushed a potential competitor. Oculus doesn’t have that, and parts of its current, specialised user base are already abandoning ship. But what it does have, potentially, is the eyeballs of millions of future users. Facebook surely wants those eyeballs.

facebook oculus (1)

Here’s the real tragedy in all this.

It may find that the problems of virtual reality will be even harder to overcome for a mainstream audience. Price is a major factor, though all that fat cash should be put to good use driving down the production costs (or, like many consoles, selling at a loss in the hope of making returns on software.) Who though, aside from nerds like us, is going to be prepared to wear those ridiculous headsets? Not to mention the ongoing problems of motion sickness. That virtual conference call isn’t going to be very productive if Chad from accounts is too busy chundering into his pin-stripes.

Maybe this type of acquisition was inevitable for Oculus. It was perhaps a naive dream to believe it could remain a relatively open PC peripheral and gain any kind of widespread traction. But of all the corporations to get into bed with, Facebook is one guaranteed to divide and enrage a significant number of the audience Oculus had already attracted. Perhaps they don’t care (though flustered PR crowd control efforts on Reddit yesterday would suggest otherwise,) but it’s sad to see another project with a certain amount of potential disappear into the corporate maw.

It’s concerning to see Palmer Luckey keep referring to this deal as a “partnership” when the acquisition doesn’t give any indication whatsoever of being about equality of power.

If VR really is going to take off this time, there will be other companies with other peripherals out there. I was never fully on board with Oculus, but this move has made the decision easy. This is where we part ways.

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  1. Kodes
    +2

    For $2 Billion, I’d alienate the entire world.

    March 26, 2014 at 8:31 pm
  2. +6

    There are two possible outcomes, really. One is that Facebook leaves Oculus alone, and has basically used this acquisition as a way to branch out their portfolio and make money in the future, if it takes off – possibly by working on the social media side of things and pushing it through there. This is something they wouldn’t really want to tell their shareholders, but for the users, it’s the best possible result; it means Oculus VR are basically left to their own devices to use this massive influx of cash in order to make a solid product and hopefully sell it cheaper. Despite the obvious possibilities for social media and VR, I can’t really see most social media users actually picking up an expensive headset for that sort of thing.

    The other possible outcome is that Facebook are going to force Oculus to do what they want, and to monetize it as much as possible. Now, this is hugely depressing, but it still isn’t necessarily *bad* – while that might either kill off VR (again) or neuter and stifle it to the point of insignificance, it could also result in such a massive uptake that VR becomes impossible to ignore. That, however, is really a long shot. It’s far more likely to do significant damage than to supercharge this nascent technology.

    (Oh, and from what I can gather, a lot of the motion sickness problems have been solved. As I don’t have the latest and most amazing prototype, though, I can’t say for sure.)

    TL;DR Facebook is terrifying and evil and we’re all probably doomed. So is Oculus. RIP, etc.

    March 26, 2014 at 8:40 pm
    1. +4

      I’m not sure I’d want anything to do with the “impossible to ignore” version of VR in your second scenario, but otherwise, yeah.

      Oculus being left alone is definitely in the ‘best case’ slot. The public statements from both parties are indicating that will happen, but they also know this is exactly what people want to hear at the moment (just as the shareholders want to hear monitize, monitize, monitize.) It’s really difficult to gauge how true it is – but I hope so.

      TL;DR Tim’s TL;DR is a big fat fake!

      March 26, 2014 at 8:58 pm
      1. My TL;DR was pretty much what I said! It just lacked… nuance. Lots of nuance.

        But yeah, Facebook basically acting as particularly aggressive venture capitalists is really the best case. I sorta hope that really is it – that they’re just putting money into something they think will take off in order to help it take off, rather than trying to interfere and use it to make their already-existing stuff stronger. I’d like to believe they’re smart enough to do that, but…

        March 26, 2014 at 9:36 pm
  3. +1

    I think Oculus have always intended to make VR cheap and available to the masses, didn’t someone from Oculus say they wanted the headset to be “free to play” with software covering the cost? I think this is exactly what is going on here, I predict Facebook VR in about 5 years with really cheap hardware supported by ads. I wouldn’t want it, but I think this is the best that could happen.
    Facebook making VR mainstream will give a base for a high end market as well, with much better devices at a premium price of course. It’s reasonable to expect Oculus to make a high end version in a addition to the cheap one (will take a long time before 4k 90fps is mainstream).

    Oculus aren’t the only ones with decent hardware either, Valve was apparently able to make some great stuff and Sensics got one with much higher FOV, 2x1080p and eyetracking.

    Why complain if Oculus can use Facebooks money to make VR headsets available to and wanted by the masses.

    March 27, 2014 at 9:54 am

  4. H J Price
    +2

    I don’t look at the internet for a few hours, and this happens???

    I’m another one, like Peter, who wasn’t particularly invested in the Rift (interesting name now that FB has caused a chasm in the gaming community) but even I went all Darth Vader-y, and dropped to my knees bellowing the requisite “Nooooooooo” when I heard the news.

    [NB I played around with a VR machine when I worked at a kids camp near Wolverhampton [don't snigger!] in the UK, in the mid 90s. Before breaking the damned (and very expensive) thing by placing it on a nylon carpet(!), we had quite a bit of fun shooting ducks from a boxing ring to collect money (don’t ask!) … and skied down a mountain trying not to fall into holes in the course filled with nasty pointy spikey things. When I was finally coming to grips with the skiing, a colleague of mine decided to move a piece of the equipment just at the wrong moment, and I found myself skiing UP the bloody thing and died almost instantaneously … not fair!! That was probably my last experience with VR technology.]

    So … I feel really sorry for those who backed the Kickstarter in the first place. They must be feeling particularly crap tonight. They probably went in with good faith thinking that they were in on a slice of history helping someone come up with the sci-fi dream they’ve had since they were kids watching the holodeck on Star Trek NG with big googly(!) eyes. And now to have their dreams quashed in the worst possible way. It must be pretty awful for them … and this is coming from someone who normally doesn’t give a stuff for Kickstarters, and those who back something that may not necessarily appear at all … ever. But I feel strangely sympathetic towards them … or is it the sausages I had for tea?

    Anyway, I keep reading comments by people on other websites stating that it might not be THAT bad. But then I think, “Facebook”, and it all that positivity just crumbles to dust. I just can’t see any positive side to being “acquired” (I’ve just noticed how soulless that word is now) by Facebook.

    Still it could have been worse. It could have been Mattessons … mmm

    RIP Oculus Rift … time to down another sausage, in remembrance methinks … it was good while it lasted.

    Best wishes

    Harvey Price (Palmerston North, NZ)

    ps … Facebook? Really??? You sold your soul to a flippin’ soulless corporate like that for what really amounts to peanuts. Oh well … could be worse. At least you didn’t leave someone to (probably) die on a mountain like that Dean “Rocket” (fnarr fnarr) Hall did. Now that would be evil …

    March 27, 2014 at 10:42 am

  5. walter sphnesphne
    0

    This acquisition obviously will result in better VR hardware, lower cost to the consumer, shorter development time, and possibly more content from developers. However, if a single facebook login or ad pops up, or I’m forced to connect to the internet, while I play a AAA game on the rift, I’m out. I’m sure in VR adverts will be integrated into game environments, such as in-game billboards, etc., instead of 2d screen pop-ups. However, if I start seeing Gatorade billboards in Skyrim, I’m also out. And fuck you Oculus you greedy bastards for making me even have to type this bullshit.

    March 27, 2014 at 12:40 pm
  6. +1

    my totaly uninformed guess is they paid the money to get the talent, IMHO you can say goodbye to the RIFT, Facebook will use the talent to create a Facebook only social device

    March 28, 2014 at 10:13 am
  7. +1

    Facebook needs to acquire new tech if it’s to remain relevant. Many ‘expert’ forecasters are predicting a sharp decline in FB usage over the next few years. Page managers are already moving away from it as a means of marketing because of the low % of ‘followers’ updates reach. So it’s not as important now. The young folk are apparently moving to other social platforms now because the damn parents have moved in to FB and they can’t possibly be using the same stuff their old mum and dad are using.

    It’s going to be interesting to see what they do with it, how much freedom of vision Oculus retain. It’s always scary when the big boys get involved but they have to battle against Google which owns the internet at the moment.

    March 29, 2014 at 2:15 am

  8. Gankatron
    +1

    Statement, Peter Parrish – “The Oculus Facebook Deal Risks Alienating its Supporters.”

    Response, Mark Zuckerberg – “Freedom is irrelevant. Self-determination is irrelevant. You must comply.”

    Facebook is one of the most reviled and yet ubiquitously used data mining programs in the world. It is this paradox that makes concerns over alienating its supporters irrelevant.

    The day when Oculus Rift headsets appear on the market with a large Facebook logo they will sell out at every outlet. Maybe you will show some willpower and not be in the first wave, but one way or another you will succumb.

    Perhaps you will wait for the Totem to be put into production, but this begs the question, “To which corporation do they intend to sell out to after using up their grassroots Kickstarter money?”

    This is a massive technology and people are fairly myopic in restricting their focus on video game, or even social media uses. Think Department of Defense, robotics, aerospace, biomedicine, and potentially the largest grossing application, porn once my virtual reality underpants get funded on Kickstarter.

    This is potentially an In The Year 2525 technological advancement, and don’t expect to hold out for idealistic indie game developers to sell versions of their VR headsets on Etsy.

    If you are significantly involved in gaming, social applications, or basically anything involving the internet (such as a writer for a gaming website?) you will buy it, or at most wait a bit longer and stubbornly purchase one from a competing corporation also looking to monetize it to the max.

    You will succumb…

    Response, Mark Zuckerberg – “Strength is irrelevant. Resistance is futile. We wish to improve ourselves. We will add your biological and technological distinctiveness to our own. Your culture will adapt to service ours.”

    March 31, 2014 at 6:24 pm

    1. Gankatron
      +1

      I did enjoy your article btw. I even Like’d it on your Facebook share icon above the article. :P

      March 31, 2014 at 6:32 pm

  9. Gankatron
    +1

    I hope it stays as simple as providing a stand-alone peripheral where one can choose the device upon preference such as between gaming keyboards.

    I will venture to guess the reason a large social media company like Facebook is interested in VR headsets is not only for the gaming product, but the service structure built around it.

    This last year I have been noticing software companies finding new ways to monetize their products. I wanted to buy new Office suite and Quickbooks programs and both companies now are aggressively pushing yearly software rental services, with both planning to phase out straight-up software purchases.

    I also bought a “smart TV” and figured that I could freely surf the web only to find out the different TV manufacturers had struck proprietary deals with different content providers so their media sites wouldn’t be available on competitor’s models.

    I won’t be surprised to see a Facebook attempt to forge proprietary agreements with software companies that require a monthly Facebook account service charge that bundles their VR headsets and transition into more of a COX content provider for software, media, social networking applications.

    March 31, 2014 at 7:56 pm
  10. Facebook are desperate to leverage into games, as them knowing everything you in real life they want to know everything you do in games and what games you buy

    March 31, 2014 at 10:17 pm

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