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Wednesday, March 26, 2014

The Oculus Rift "Sellout"

Yesterday's announcement of the Oculus Rift acquisition by Facebook has already garnered negative reactions amongst gamers and game developers. If you're a bystander, you might wonder why they got such a hugely negative reaction by people who should be their biggest supporters. Introducing a new technology requires high volume and in gaming, usually requires loss-leading hardware sales in order to drive that volume. Who better than Facebook with its deep pockets and huge profits is well-suited to such an endeavor? Google and Apple have deep pockets but both would restrict such technology to their favored platforms rather than more open systems, while Facebook would be more platform agnostic than just about anyone.

The negative reaction can be explained by the principle of reciprocity. The initial kickstarter backers of Oculus Rift and game developers thereof provided a gift to Oculus Rift. The gift was intended to bring about an independent hardware platform that would be (rightly or wrongly) dominated by the requirements driven by gamers. The backers did not intend to provide venture capital for Oculus to make a quick exit, and certainly not to sell out to a big company with a history of indifference towards games, and has a platform that has historically supported games like Farmville, anathema to the hardcore gamers that comprise Oculus' demographic.

As for Facebook, this acquisition is an counter to the usual industry trends. The amount of compute power required to drive something like the Oculus Rift is enormous and power hungry. It is unlikely that the Oculus Rift can be tethered to anything less powerful than a Playstation 4 any time soon, and certainly won't be able to run on any of the laptops typically distributed to a Facebook employee, let alone the smartphones favored by the trendy. It looks geeky, is unfashionable, and looks ridiculous when worn. The only possible good it could do Facebook in the medium term is if it got them into the living room.

Corporate head-honchos at Google, Amazon, and Apple have long looked at the living room game console as the entry point to taking over the entertainment center of the home. The numbers look tempting to the corporate types. Hardcore game consoles from Sony, Microsoft, and Nintendo have only penetrated 56% of US households. The other 44% looks ripe for disruption. However, these corporate types tend to have zero passion for gaming, and most have never so much as held a gaming controller in their hands. They tend to envision something like the Ouya or the Chromecast, neither of which provide sufficient power or quality content to get 6 year-olds excited about them, let alone the hard core gamers. They fail to understand that the quality of content (whether it be a video game or high quality blu-ray viewing or streaming) is the reason why so far, the game consoles have had a huge market share for living room usage.

The Facebook acquisition of Oculus Rift runs counter to that type of corporate thinking, and might actually succeed, if it doesn't start off by pissing off so many hard core supporters that it has poisoned the well. That disadvantage is possible to overcome, but only by Facebook doing a thorough job of winning over gamers and the developers through the kind of largesse that so far, only Sony has proven to be capable of doing. Since Sony's morpheus platform would presumably be tied to Sony's platforms, the Oculus Rift is still the best hope for mass market adoption of VR technology.

My prediction is that Facebook will screw it up with gamers (it's very unlikely given its corporate culture that it would do otherwise), and 5 years from now will look at Oculus as a poor acquisition, while Sony's morpheus project will see a very small niche similar to that the Playstation Move has been. Sony simply does not have the financial ability to take big losses in order to drive market adoption, while Facebook lacks the cultural understanding of gaming to be able to do much other than to poison the well with its ideal early adopters.

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