16 Answers
33.4k Views • Upvoted by Paul King, Product Analytics manager at Facebook, Bowei Zhang, Software Engineer at Facebook, Abhinav Sharma, I worked at Facebook
Answer featured in Forbes.
I like Anup’s answer, but many of the others are a little off.
I joined Oculus when they had just started their Series A (which seems like a lifetime ago, but was in fact only a year ago) so I think I can offer some insight; but please let it be clear that my answer represents only my personal views and not those of either company (OVR or FB).
First, if you have not experienced the latest demo’s of the Oculus Rift personally you should do so before asking or answering this question. Once you have done a demo , especially if you can do one with one of the founders or early team personally - you’re going to be hooked, the experience itself is so compelling- it’s undeniable.
Here is a quote from Chris Dixon of Andreesen Horowitz, one of the most experienced and respected investors of our time:
“I’ve only seen a handful of technology demos in my life that made me feel like the world was about to change. . . Apple II, the Macintosh, Netscape, Google, the iPhone, and – now – the Oculus Rift”
This is key - once you do a demo in the Rift you feel like you just glimpsed the future - and you don’t need to be as smart as Chris Dixon to figure it out that it’s a big deal.
I joined the Oculus team after 5 amazing years with SpaceX; Nate Mitchell an OVR Founder and Chief of Product called me just a couple days into what would have been the first real time off I’d had in years.
My plan was to spend at least the next 6 months as a southern california beach bum before even trying to reintegrate myself into the real world; no way was I ready to throw myself into the arms of another start-up; start-ups are like a babies that never stop crying - so you know going into it, that mommies and daddies don’t get much sleep for a couple of years.
The warm sand and salty waters of SoCal were calling me, but, Nate with all his charm talked me into coming by for a quick discussion and chance to demo the product.
Now, this may make me sound like a snarky asshat - but even as I’m driving into the meeting, I’m thinking . . I just did rockets, I’m pretty sure a headset isn’t going to be so exciting, and this was probably a waste of time.
When I arrive, the first person I meet with is Nate- and he is amazing. So punch drunk on the Oculus Kool-Aid, lets call it OculAid it’s coming out of his pores. You can tell he loves what he is doing, and he believes in it with every ounce of his soul. Maybe he is just that good of a salesman- either way; I was hanging on every word of his pitch to the extent that I could have immediately repeated it to someone else and sounded convincing. As a recruiter, you want a pitch you can be proud of, something with vision and grandeur, something that evokes emotions and resonates with your audience hours after they have heard it.
Soon we went to chat with Brendan Iribe, the CEO. He matches Nate’s enthusiasm and charm pound for pound. On one hand they are total teddy bears- but on the other hand it was also clear they were exceptionally smart guys with a vision, a sound execution plan, and a very healthy helping of tenacity. I remember thinking to myself, these guys are pretty damn good - and after spending 5 years observing the greatest entrepreneur of our time the bar was pretty high.
At some point a kid with no shoes walks by. . . http://www.wired.com/2014
When you heard Nate or Brendan talk about what they wanted to do in the coming months and years - you could see the universe in their eyes, and you could buy into helping create it. So I have to admit, as cocky as I may have been walking in, they had won me over less than 10 minutes into the discussion- even before the demo.
We head into a conference room next door to do the hardware demo (of a DK1 at this time), they have a glitch with initial setup, and I feel my cynicism flare up for a moment; but then 10 seconds later we are ready for takeoff.
I sit down in an office chair, they strap the Rift onto my head, and launch the first experience.
Holy shit, it’s snowing.
No it’s not you idiot, you're in an office chair.
But it’s so white and fluffy, and it’s falling everywhere, I can see it when I look up, it’s all around me, is it behind me too?
I turn around.
Eeeeeek! There is a 9 foot tall monster behind me.
I lean so far forward to get away from him that I almost fall out of the chair.
Again you idiot, you’re in an office chair. You probably look super weird right now, and based on the data I’m getting from your ass you’re about an inch from falling off the chair and into the table.
I hear Nate laugh at me.
He hands me a remote, and shows me how the very simple controller works. All of a sudden I can run loose in this snowy medieval land. The sense of presence, motion and inertia completely bamboozle my brain.
Oh My God, this can’t even be possible right?
We are still in the office chair right?
Nate says, “Pretty cool - huh? and Guess what you can fly. Just push up. ”
Don’t do it, this is already insane.
Are you crazy??? We are totally doing it.
I push up.
WEEEEEEEEEEEEEEEEEEEEEEE
WEEEEEEEEEEEEEEEEEEEEEEE
I’ve flown before in my dreams, sometimes I figure out that I’m dreaming and try to take over so I can enjoy the ride more; it’s only happened maybe 5-6 times in my life, but always remember it when I wake up. I don’t even like heights in real life, but flying in your dreams is amazing, it’s some sort of dopamine surge that I can only relate to being a kid swinging so high on the swing that you thought the swing would flip.
I fly around for a few more minutes in the Rift, in utter awe of what was happening. . . how can you feel air moving beneath your feet when you’re in a freaking office chair??
Because the power of the human mind is incomprehensible; and the Rift had hijacked into my brain, thats how.
I pull myself out of the unit, it makes me 2-3 seconds to get my bearings.
Did that really just happen?
How awesome would it be if we (SpaceX) had one of these to create flight simulations for Dragon. . . and I wish I had one for when I was house hunting. . .the implications for learning and development are crazy. . . the TuPac Coachella Hologram is officially childs play. . . OMG whoever makes porn on this thing is going to be really popular. . .
After doing the demo, I felt like I had been let in on an amazing secret - like I had been given a glimpse of the future.
So there was no question about if I wanted to be involved, something someone once said about idiots and rocketships hung heavy in my head.
So why would FB, or Zuck would buy Oculus VR, and for $2.5B, 18 months after the founding of the company?
It’s because he saw the future- and it’s well worth the price tag.
FB has one of the, (if not the) largest server and computing infrastructures in the world - but FB is not necessarily the sexy brand of the digital 3.0 future. It’s what me and my high school friends from 15 years ago use- but it’s not what my kids or their friends are talking about.
Not that FB doesn’t itself have tons of growth and revenue potential; despite their enormous user base, there is plenty of planet and people left to cover, and the inertia of what they have built alone will sustain them another 15 years.
But guys like Zuck (and Elon, and Larry, and Serge, and Branson, and Bezos. . . ) don’t want to own the next 15 years- they want to own the next 150 years. So you see them making tremendous investments energy, transportation, drones, robotics, biomedical tech, sensor systems, AI, etc. all markets of the future.
If the www is the alpha, truely immersive VR is the omega. The Oculus Rift and VR have the potential to transform not just billions but trillions of dollars across markets and mediums.
Smart people have always known that VR would be a game changer; there were a couple false starts, as it took some time for the trends and technologies to converge enough to actually make it possible.
So now as the stars lined up, the very large FB checkbook was ready.
Now that I’ve given you my very long winded answer; here are links to statements made by Brendan Iribe directly which you may find interesting.
Brendan on why FB bought OVR. http://money.cnn.com/vide
Brendan on why OVR sold to FB.
http://venturebeat.com/20
I joined Oculus when they had just started their Series A (which seems like a lifetime ago, but was in fact only a year ago) so I think I can offer some insight; but please let it be clear that my answer represents only my personal views and not those of either company (OVR or FB).
First, if you have not experienced the latest demo’s of the Oculus Rift personally you should do so before asking or answering this question. Once you have done a demo , especially if you can do one with one of the founders or early team personally - you’re going to be hooked, the experience itself is so compelling- it’s undeniable.
Here is a quote from Chris Dixon of Andreesen Horowitz, one of the most experienced and respected investors of our time:
“I’ve only seen a handful of technology demos in my life that made me feel like the world was about to change. . . Apple II, the Macintosh, Netscape, Google, the iPhone, and – now – the Oculus Rift”
This is key - once you do a demo in the Rift you feel like you just glimpsed the future - and you don’t need to be as smart as Chris Dixon to figure it out that it’s a big deal.
I joined the Oculus team after 5 amazing years with SpaceX; Nate Mitchell an OVR Founder and Chief of Product called me just a couple days into what would have been the first real time off I’d had in years.
My plan was to spend at least the next 6 months as a southern california beach bum before even trying to reintegrate myself into the real world; no way was I ready to throw myself into the arms of another start-up; start-ups are like a babies that never stop crying - so you know going into it, that mommies and daddies don’t get much sleep for a couple of years.
The warm sand and salty waters of SoCal were calling me, but, Nate with all his charm talked me into coming by for a quick discussion and chance to demo the product.
Now, this may make me sound like a snarky asshat - but even as I’m driving into the meeting, I’m thinking . . I just did rockets, I’m pretty sure a headset isn’t going to be so exciting, and this was probably a waste of time.
When I arrive, the first person I meet with is Nate- and he is amazing. So punch drunk on the Oculus Kool-Aid, lets call it OculAid it’s coming out of his pores. You can tell he loves what he is doing, and he believes in it with every ounce of his soul. Maybe he is just that good of a salesman- either way; I was hanging on every word of his pitch to the extent that I could have immediately repeated it to someone else and sounded convincing. As a recruiter, you want a pitch you can be proud of, something with vision and grandeur, something that evokes emotions and resonates with your audience hours after they have heard it.
Soon we went to chat with Brendan Iribe, the CEO. He matches Nate’s enthusiasm and charm pound for pound. On one hand they are total teddy bears- but on the other hand it was also clear they were exceptionally smart guys with a vision, a sound execution plan, and a very healthy helping of tenacity. I remember thinking to myself, these guys are pretty damn good - and after spending 5 years observing the greatest entrepreneur of our time the bar was pretty high.
At some point a kid with no shoes walks by. . . http://www.wired.com/2014
When you heard Nate or Brendan talk about what they wanted to do in the coming months and years - you could see the universe in their eyes, and you could buy into helping create it. So I have to admit, as cocky as I may have been walking in, they had won me over less than 10 minutes into the discussion- even before the demo.
We head into a conference room next door to do the hardware demo (of a DK1 at this time), they have a glitch with initial setup, and I feel my cynicism flare up for a moment; but then 10 seconds later we are ready for takeoff.
I sit down in an office chair, they strap the Rift onto my head, and launch the first experience.
Holy shit, it’s snowing.
No it’s not you idiot, you're in an office chair.
But it’s so white and fluffy, and it’s falling everywhere, I can see it when I look up, it’s all around me, is it behind me too?
I turn around.
Eeeeeek! There is a 9 foot tall monster behind me.
I lean so far forward to get away from him that I almost fall out of the chair.
Again you idiot, you’re in an office chair. You probably look super weird right now, and based on the data I’m getting from your ass you’re about an inch from falling off the chair and into the table.
I hear Nate laugh at me.
He hands me a remote, and shows me how the very simple controller works. All of a sudden I can run loose in this snowy medieval land. The sense of presence, motion and inertia completely bamboozle my brain.
Oh My God, this can’t even be possible right?
We are still in the office chair right?
Nate says, “Pretty cool - huh? and Guess what you can fly. Just push up. ”
Don’t do it, this is already insane.
Are you crazy??? We are totally doing it.
I push up.
WEEEEEEEEEEEEEEEEEEEEEEE
WEEEEEEEEEEEEEEEEEEEEEEE
I’ve flown before in my dreams, sometimes I figure out that I’m dreaming and try to take over so I can enjoy the ride more; it’s only happened maybe 5-6 times in my life, but always remember it when I wake up. I don’t even like heights in real life, but flying in your dreams is amazing, it’s some sort of dopamine surge that I can only relate to being a kid swinging so high on the swing that you thought the swing would flip.
I fly around for a few more minutes in the Rift, in utter awe of what was happening. . . how can you feel air moving beneath your feet when you’re in a freaking office chair??
Because the power of the human mind is incomprehensible; and the Rift had hijacked into my brain, thats how.
I pull myself out of the unit, it makes me 2-3 seconds to get my bearings.
Did that really just happen?
How awesome would it be if we (SpaceX) had one of these to create flight simulations for Dragon. . . and I wish I had one for when I was house hunting. . .the implications for learning and development are crazy. . . the TuPac Coachella Hologram is officially childs play. . . OMG whoever makes porn on this thing is going to be really popular. . .
After doing the demo, I felt like I had been let in on an amazing secret - like I had been given a glimpse of the future.
So there was no question about if I wanted to be involved, something someone once said about idiots and rocketships hung heavy in my head.
So why would FB, or Zuck would buy Oculus VR, and for $2.5B, 18 months after the founding of the company?
It’s because he saw the future- and it’s well worth the price tag.
FB has one of the, (if not the) largest server and computing infrastructures in the world - but FB is not necessarily the sexy brand of the digital 3.0 future. It’s what me and my high school friends from 15 years ago use- but it’s not what my kids or their friends are talking about.
Not that FB doesn’t itself have tons of growth and revenue potential; despite their enormous user base, there is plenty of planet and people left to cover, and the inertia of what they have built alone will sustain them another 15 years.
But guys like Zuck (and Elon, and Larry, and Serge, and Branson, and Bezos. . . ) don’t want to own the next 15 years- they want to own the next 150 years. So you see them making tremendous investments energy, transportation, drones, robotics, biomedical tech, sensor systems, AI, etc. all markets of the future.
If the www is the alpha, truely immersive VR is the omega. The Oculus Rift and VR have the potential to transform not just billions but trillions of dollars across markets and mediums.
Smart people have always known that VR would be a game changer; there were a couple false starts, as it took some time for the trends and technologies to converge enough to actually make it possible.
So now as the stars lined up, the very large FB checkbook was ready.
Now that I’ve given you my very long winded answer; here are links to statements made by Brendan Iribe directly which you may find interesting.
Brendan on why FB bought OVR. http://money.cnn.com/vide
Brendan on why OVR sold to FB.
http://venturebeat.com/20
I think this acquisition shows that FB is now moving beyond just being a social network to being a conglomerate that operates in multiple markets and has multiple revenue streams. For that to happen, it has to bet on the next thing and it might very well be VR. Here is how I think it will play out:
All of this depends on whether VR is the next big thing. If it is true, this might go down as a genius move from Zuck.
This acquisition is quite similar to Google acquiring Android and owning the "next" platform - mobile. Google accelerated the development and distribution of Android 100x and it now dominates the mobile market.
We truly live in fascinating times.
- Oculus Rift (OR) stays a separate brand for the foreseeable future.
- With the cash, Oculus develops proprietary hardware. (I think the designs are already there. Implementation needed large capital that they now have)
- Simultaneously, capital is used to develop content (mostly gaming) that showcase the abilities of VR.
- This is announced publicly to win back the trust of the indie developer community.
- An amazing consumer version is launched at an attractive price point that has games at launch. (Similar to the PS4 having exclusive content on launch)
- FB uses its scale and distribution to push more ORs into the market.
- Good reviews and attractive price point attracts the early adopters - gaming community to OR. More revenues for FB and more install base of ORs.
- Enthusiasts develop apps for a niche audience in other fields. (Think app development for Google glass)
- A new way to experience FB is one of the many apps
- More updates and newer hardware push OR further into the mainstream ("You buy it for gaming, i buy it for video conferences")
- Travel, Education and Media (Films) are the secondary sectors to embrace VR
- This creates network effects and it starts becoming the platform of choice to develop VR apps. (In today's terms, "If I had resources to develop an app for only one platform, I would do it on iOS)
- A marketplace is created on the new platform and FB might take a cut of every app sold.
- FB goes back to the drawing board to create a new kind social experience in VR that captures the imagination of the next gen. (Ads might be limited to only this)
- Owning a VR set (mostly OR) becomes as normal as owning a smartphone.
- FB, just like Apple, decides to own the entire stack to provide a much better experience to end users. Blue colored FB VR stores anyone?
All of this depends on whether VR is the next big thing. If it is true, this might go down as a genius move from Zuck.
This acquisition is quite similar to Google acquiring Android and owning the "next" platform - mobile. Google accelerated the development and distribution of Android 100x and it now dominates the mobile market.
We truly live in fascinating times.
3.2k Views
Disclaimer: While I do work at Facebook, the comments, speculation, and opinions in this answer are my own and not those of my employer.
I am (was?) extremely excited for the Oculus Rift.
Lots of reactions to Mark announcing we're acquiring Oculus for $2B ($400M cash, $1.6B in stock); first reaction was, "This is worse than Apple potentially buying Tesla" (see the scare in the news a few weeks back), but after thinking about it for a while it just makes me happy that Sony recently announced a competitor in the space. Honestly, I don't trust the higher ups to innovate and give VR the attention it needs unless there is someone to compete against (see: FB vs G+).
Pros:
Cons:
I am (was?) extremely excited for the Oculus Rift.
Lots of reactions to Mark announcing we're acquiring Oculus for $2B ($400M cash, $1.6B in stock); first reaction was, "This is worse than Apple potentially buying Tesla" (see the scare in the news a few weeks back), but after thinking about it for a while it just makes me happy that Sony recently announced a competitor in the space. Honestly, I don't trust the higher ups to innovate and give VR the attention it needs unless there is someone to compete against (see: FB vs G+).
Pros:
- It's a solid move for Facebook, as it's a new platform that we finally have the technology to make work on a large scale.
- Facebook may be well poised to bring the Rift to "mainstream" gamers.
- Facebook is well poised to start researching shared VR experiences with friends, and if we can get through the rough stages prior and make Rift a commonplace item, a shared VR experience with friends would be a true shift in social paradigms.
- We have plenty of extra resources to share with Oculus (money, hardware, expertise, and experience) that will help them in their hard days ahead.
- We got John Carmack.
Cons:
- Facebook is not a gaming company and may very well ruin Rift if we get too involved in actual product development.
- I worry deeply that deep Facebook integration will ruin the experience. Virtual Reality is supposed to be full immersion, and even seeing the occasional "Mark is now playing Game X" (a la Steam) would be absolutely awful and break you out of the zone.
- I'm also worried that this acquisition and platform to "share experiences" is a direct, rushed response to Glass doing well so far, and don't have confidence that a VR shared experience will beat out a shared POV experience when you factor in the niche-ness of when someone can use VR (when they are alone, don't mind losing vision of the world around them, and feel safe) versus when someone can share POV with Glass (anywhere).
- Rift seems to be more of an "adult" console for most, but a "nerd" console for early teens, and I worry associating ourselves will lead to an even greater drop in the young generation's perception of FB.
- If you equate the Rift platform to the FB platform, I believe we'll have a very strong reliance on third party VR developers just like we have a very strong reliance on third party web developers right now. When your competition is Sony (which is excellent with promoting first-party content) and has some of the largest content studios under its thumb (Square Enix, anyone?), this is not a reliance you want to have.
- Similarly to the above point, I am worried that our reliance on third party developers will lead to a similar privacy mess that exists with FB Connect, giving out far too much personal information to try and lure good developers in. While I typically agree that "privacy on the internet" is largely negligible, I viewed VR as a new medium that I had hoped might be different (though that may just be my naivety speaking.)
- I see no reason for the Oculus founders to have accepted a deal from a company that differs so much from their product goals. It makes me worried that the $2B is just an exit strategy for them, and that the fast strides forward in Rift development will quickly become a thing of the past.
- Our primary monetization strategy is ads. While Rift may give us a secondary stream of income (hardware sales), it is nothing but a one-off purchase, and I worry this will force a subscription-based service or, god forbid, ads.
I want to resoundingingly echo a bullet point in one of the Anon's answer. I really don't think that this is ultimately about VR headsets (although Zuck probably doesn't mind people shutting up about Facebook's response to Google Glass). I really think that the acquisition is about Oculus' CTO:
![]()
John D. Carmack
Facebook needs to continue to provide compelling experiences to users (eyeballs = ads = revenue) and they have been rumbling about boosting their game platform in order to do this. If I had billions of dollars at my disposal and I deemed a game platform strategically important, Carmack would sure as hell be on my short list of people to go after.
Facebook needs to continue to provide compelling experiences to users (eyeballs = ads = revenue) and they have been rumbling about boosting their game platform in order to do this. If I had billions of dollars at my disposal and I deemed a game platform strategically important, Carmack would sure as hell be on my short list of people to go after.
Think about it in the long term. As Zuckerberg puts it in his post about the acquisition, (see here):
"Our mission is to make the world more open and connected. (...)
Immersive gaming will be the first, and Oculus already has big plans here that won't be changing and we hope to accelerate. (...)
But this is just the start. After games, we're going to make Oculus a platform for many other experiences. 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 -- just by putting on goggles in your home."
Oculus VR will be way more than a gaming tool, it's also a way to create mind-blowing virtual social experiences. Think about a next-generation Skype where you can virtually talk with your friends around a table. Facebook wants to be a leader in these future social platforms and such a device is the perfect tool for that kind of online social interactions.
"Our mission is to make the world more open and connected. (...)
Immersive gaming will be the first, and Oculus already has big plans here that won't be changing and we hope to accelerate. (...)
But this is just the start. After games, we're going to make Oculus a platform for many other experiences. 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 -- just by putting on goggles in your home."
Oculus VR will be way more than a gaming tool, it's also a way to create mind-blowing virtual social experiences. Think about a next-generation Skype where you can virtually talk with your friends around a table. Facebook wants to be a leader in these future social platforms and such a device is the perfect tool for that kind of online social interactions.
