Facebook buys the Oculus Rift for $2 billion.
Well, that escalated quickly…
Holy dingballs, Facebook is acquiring the Oculus Rift VR company for a cool $2 billion!
Actually, I’m in two minds about it. The logical, rational business-minded side of me knows that it’s original funding targets and limited financial clout was always going to make the Rift a hard sell to the general public; it was birthed in a sort of hipster-haze that had sunbeams and rainbows shining out of every crack in its façade. Facebook putting in $2 billion pretty much ensures the technology now has the financial grunt to back up the intention of being a mass-marketable device, and with Facebook’s backing, will give it significant pressure in order to get better deals on the necessary hardware and production in order to make it a reality. Money greases many wheels, and will make the whole thing run more efficiently, and probably even speed it up into the market.
That’s the logical side of me. The rest of me has three main concerns;
1) The original backers, who believed in the project. Let’s not forget that this began life as an independent start-up backed by fans on Kickstarter, and it raised $2.4 million. Admittedly, a drop in the ocean and a lot of that was for devkit access (more on this in a bit!), but you have a lot of people who believed in the project as an independent entity and gave considerable sums of money towards it. The end result is that now the company will be wholly owned by Facebook; I cannot imagine anyone who backed this project will be happy, with some even considering this being the straw to break Kickstarter’s back, with individuals already discussing openly the concept of suing for their kickstarted money back. The reality is that this will be messy not just for the Oculus people, but for Facebook and Kickstarter who will be largely pit against each other in a horrible financial battle over money. Welcome to the cluster-fruitcake!
2) Those who paid for devkits would probably have been more comfortable with the independence of the company they were dealing with; now, less so. Facebook has in the past burned a hell of a lot of bridges with many developers of games and content (partially due to its historic relationship with Zynga), and has had many worrying privacy and data-control issues. Markus “Notch” Persson was the first to quickly announce that he was pulling his game from the Rift – when that game is Minecraft, it’s a bold move – and I suspect he won’t be alone in this either. Dealing with a company that is interested in your projects and feedback is one thing; dealing with Facebook, and it’s myriad problems and issues, is likely to be quite another entirely. With the future of content distribution and the genuine focus of firmware function in question, independent content owners will no doubt be much more cautious to start with; leading to a dip in general confidence.
3) Facebook is paying $2 billion for this. That’s a not-inconsiderate sum of money, but one might argue that consumers themselves who have been hyped by the project of late will feel somewhat cheated by this, as it feels like the whole project has “sold-out”, and generally was only intended as a platform for larger investment. This means that their goodwill, donations and general publicising of the Rift has all contributed in the end to a greater financial coup in the long term. Admittedly, this is the hyper-cynical part of me taking on this front; but the initial reaction has been widely negative, with people confused and insulted by the acquisition, feeling misled or that they dishonestly tried to keep it secret for as long as possible to avoid scaring people away.
In a more serious face though; I’m not surprised.
The company needed funding; and Facebook needed acquisitions in order to somewhat justify its stock valuations. The marriage is a shotgun wedding and I suspect months down the road, a lot of this will unravel. Facebook will look to the Rift as a new “mobile platform”, a sort of antithesis to the Google Glass (good luck there guys! AR and VR are miles apart…). It will be looking to create a social media platform on it, and it won’t care who gets fired in the process because, hell, it paid $2 billion. It owns them now. #dealwithit.
Developers will be more wary – Facebook has a history of being far less supportive of smaller outfits, and this was as I said before demonstrated when Zynga began to clone other peoples content and make far more for Facebook than the independents could. Their voices were drowned out; expecting many of these smaller developers to continue to support the Rift now is frankly hilarious if not deeply troubling. Just buying a platform hoping they’ll come back doesn’t work. Support for the Rift will probably dip.
And consumers will be asked to foot the bill for a piece of technology that could no longer even be aimed primarily at the gaming sector – the one place that the Oculus Rift built its reputation. It’s going to require a serious concerted effort from all involved to keep the Rift somewhat on target – but with talk of video conference calls, virtual school classes and even virtual doctors visits, it seems that the Rift has hurriedly vacated its old premises for this new one. Consumers will be left a little bewildered by the sudden change of focus.
IF – and it’s a big IF – Facebook really does back off and let the Rift people do their own thing, they MIGHT get back support from some developers. It would be little more than a gatekeeper to the Facebook platform, but still, it’d be a platform that just happened to be funded by Facebook. But within one announcement and a few mere hours, the Oculus Rift has gone from the darling of the technical world to one of its more vilified pariahs. The fall is so sudden and quick that it actually takes my breath away – and reminds me that first impressions can be swiftly squandered by knee-jerk reactions or dumb business decisions. Will it utterly ruin the whole thing? Probably. The implications are going to be hard to overcome.
But it’s not the acquisition that I think bothers people; it’s that the money is coming from Facebook after the successful Kickstarter. With all the baggage that entails over years of mistakes in terms of games and games developers. Had it been anyone else – heck, even Microsoft – then I don’t think anyone would be making quite such a big deal out of it.
But Facebook seems like a cynical pairing for the Rift. And the response has been one of great cynicism too. And if either of them expected any differently… they’ve got a mountain to climb.
edit; Notch has since clarified his position via his blog.