Why the Facebook Oculus Rift acquisition makes little sense.

I’m the first one to encourage companies to do things that are outside their boundaries and comfort zones. But this is a very peculiar $2b acquisition by Facebook. I even had to check the date thinking April fools might have come early. I’m going to try to break down some of the logic and facts quickly.

What is Oculus Rift?
It’s a Virtual Reality headset primarily aimed at gamers. By gamers I’m not talking about the Facebook Farmville crowd, we’re talking Xbox/PS gamers who are into first person shooters (FPS). Now don’t let this mislead you – this is big business and it is mass market. The average game purchaser in the US  is 35, and over 51% of US households own a console (see more stats at theesa here). But virtual reality plays almost no part of these statistics at present. The Oculus Rift is not on sale to the general public yet.

oculus_rift_UE4
Pic via Geek.com

What’s good about the Oculus Rift?
(Note: This is based on the DevKit experience)
-It’s pretty impressive on first use. You certainly get a ‘wow’ moment.
-There’s a great sense of depth and 3D.
-You almost feel like as snowflakes blow past could reach out and touch them.
-It’s surprisingly lightweight (although you certainly know you have it on).
-It has lots of people excited in the gaming world.
-It has John Carmack, one of the big names in gaming attached to it.
-You can even run with it.

What’s wrong with Oculus Rift?
– So far it’s all hype. It’s not a consumer product yet – just dev kits.
-The ‘wow’ moment wears off eventually. Remember watching Avatar in 3D? After that most people find it hard to remember which films they watched in 3D or 2D.
-It’s not even close to feeling like ‘reality’ (yet). The pixel density of screens are not even close to being good enough to fool the eye. When you are using Oculus Rift it’s clearly a screen you are looking at and you can visibly see the pixels. This will get better in time but it’s a way off.
– It doesn’t cover your entire field of view. There is still a sense you are looking through a window. (A bit like ski goggles).
-Some people complain that it can be disorienting.
-Common feelings of sea sickness / dizziness after extended use (Oculus are working on this)

What’s wrong with with the whole Virtual Reality genre. (This is the important bit)
– There’s little evidence average consumers will actually pay for VR. I love gadgets and I will buy one. But I have dozens of gadgets I thought would be amazing but I’ve only used once or twice and now live in a draw. Remember the Wii-fit? Despite strong sales the expectations didn’t match the reality and most consumers stopped using it after only 6 weeks.
– You’re either in or out. Unlike your smartphone which we drop in and drop out of continually – being part of a VR experience means shutting off the real world. It’s hardly worth it for a few seconds. This limits its usage.
– It’s really a home or work device only.
– People don’t like cutting off a primary sense, especially two of them. VR removes 100% of real world vision and depending on how you use it, impairs our hearing. Our brains are fairly hard wired to keep us in the real world. Would you wear one in public, on the bus or at the park? Of course not – you would be blind to threats like being pick-pocketed on the bus or worse.
– It’s failed so many times before. You could argue the tech wasn’t quite there yet, and this would be true. But VR hasn’t just failed in the past it has bombed badly. Both Nintendo and Sony have tried various versions (Nintendo with the Virtual Boy below) and Sony with the Personal 3D headset for watching 3D movies.

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Sony’s personal 3D headset costs $1000 – but who uses them?

Nintendo's Virtual boy flopped completely.

Nintendo’s Virtual boy flopped completely.

VR and Oculus Summary
The jury is out. So far a lot of great hype. The product looks good, but reviews are mostly the first impressions by gamers not consumers. VR is really still work in progress and even then there are serious doubts about how big it will be. I tend to think it will be niche rather than mass – it’s not good for all games, and not all gamers will want their face covered for hours on end. VR has other applications – think medical, industry, travel etc but again, we’re not there yet.

Why Facebook?
My first thoughts and questions were these:
– Of all the companies you could see getting behind Oculus, Facebook was not even on the list. Maybe Valve / Steam would have been a better home.
– Will we socialise in VR? Is Zuck planning the next version of Second Life? Facebook 3D Life? Would anyone really care?
– Facebook is not a game company
– It’s not a hardware company
– It’s hard to see where they will get a short-medium term return on $2b
– If VR takes off, then Samsung or others will likely be in with a better product real fast.
– It feels like they are trying to be like Google.
– It feels more like a PR stunt than a business strategy.
– Why did Facebook not look at a similar business like Glyph? Arguably a VR solution more aligned with Social.
– Does the hand really fit the glove? As one user put it:
occuluscomment

Why it’s already wrong for Facebook

For Oculus to succeed in gaming it needs game devs on board (and the gaming community). The gaming world is a long distance from Facebook, culturally and physically. @Notch, creator of Minecraft has already pulled out of Oculus as a result of this deal. Read more on that here. I think we will see more of this.
[update edit – and we are here: http://www.reddit.com/r/oculus/comments/21cy9n/the_future_of_vr/] – there appears to be widespread rejection from gamers:

reddit_occulus

Conclusion

The whole thing is just plain odd. Well done to Oculus – but is Facebook their dream home? I think it was a dream deal for Oculus, but it’s hard to believe this is the best place for them. It may prove a horrible distraction. Is it a mad genius move by Zuck? Has he seen something that those of us that know Facebook and know the gaming industry can’t see? I don’t think so. The daily behaviour of gamers and the daily behaviour of social Facebook users are not the same. These are two worlds that will require an enormous amount of effort to fuse. Some gamers who helped crowdfunded Oculus in its early days do not seem happy at all and are already venting at Oculus on Reddit. If Zuck is looking to create new platforms and models for the future, why not just do a licensing deal with Oculus on the quiet? I’ll happily eat my words on this one but I suspect we will see Facebook do with Oculus what Google did with Motorola – a discount re-sale within 18-24 months. What we must all hope is that Facebook does not kill a promising start-up company that showed a lot of promise.

Update 27/3 – I do really like this response from CliffyB (Creative mind of many A list games) who also took time to air his thoughts on Minecraft creator Notch’s statement : “p.s. Notch, your cancelling Minecraft makes you look like a pouty kid who is taking his ball and going home. It’s a bratty and petty move and it saddens me greatly.” Amazing that a platfom like Facebook which aims to bring so many people together is pushing so many people apart.

Author: Iain.
Twitter: @eunmac
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teamID:  http://steamcommunity.com/id/eunmac

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