Facebook Buys Oculus VR…There Goes The Metaverse?

on Tuesday, Mar. 25th

Here’s one that none of us saw coming.

Facebook just bought Oculus VR, creators of the much buzzed about Oculus Rift virtual reality headset. From the Oculus blog:

A few months ago, Mark, Chris, and Cory from the Facebook team came down to visit our office, see the latest demos, and discuss how we could work together to bring our vision to millions of people. As we talked more, we discovered the two teams shared an even deeper vision of creating a new platform for interaction that allows billions of people to connect in a way never before possible.

Today, we’re pleased to announce that we’ve joined forces with Facebook to create the best virtual reality platform in the world.

At first glance, it might not seem obvious why Oculus is partnering with Facebook, a company focused on connecting people, investing in internet access for the world and pushing an open computing platform. But when you consider it more carefully, we’re culturally aligned with a focus on innovating and hiring the best and brightest; we believe communication drives new platforms; we want to contribute to a more open, connected world; and we both see virtual reality as the next step.

My instant reaction: April 1st is a week away, what gives?

This is not a joke, however, and it is all the more surprising given that there was no hint of this step last week at the Game Developers Conference in San Francisco. Maybe we should have put the puzzle together from the missing pieces, however.

Facebook had a presence at GDC, but it was anemic at best. The age of the Facebook game is pretty much over. As a platform for driving people to games Facebook is still in the mix, but the rise and fall of Zynga shows that the social network’s strength lies in its advertising chops.

The other piece of the puzzle was Sony’s announcement of Project Morpheus. Despite Oculus’ assurances that they welcome competition in the space they are pioneering, the competing virtual reality headset is an existential threat. While all the hands-on indications are that Sony’s product is of quality half the danger for Oculus would be a mass-consumer experience that was sub-par.

Flipping the coin we get the other threat: if Morpheus is as good, or better, than the first generation Oculus Rift the smaller company may not have the  war chest to endure a fight with Sony. The history of the video game market shows that going toe to toe with Sony can be deadly. Sega fans who lament the fall of the Dreamcast system remember this all too well.

If nothing else this connects the oh-so-young Oculus with what is essentially an “older brother” company. Facebook has money to burn these days, it would seem. The reported $2 billion deal will give the upstart a solid foundation. It also prices them out at two whole Instagrams, but at far less than the cash Facebook just dropped on What’s App.

As someone who has experienced the Rift multiple times but can’t see the point of What’s App the valuation seems backwards to me. However I know those are my emotions talking: What’s App is all about Facebook owning emerging markets. The Oculus purchase is about taking a risk on the as-yet-unproven mass appeal of a fairly out-there technology.

This could also sour some of the enthusiasm that independent game developers, many of whom have championed the Rift in public, have for the product. In gaming circles Facebook is synonymous with some of the worst design decisions possible, while the Rift was seen as a tool that creates entirely new opportunities for creativity. The money could give Oculus a stable base to develop a revolution, but the indie community is likely to balk at what Facebook stands for.

This much is certain: the future looks different today, and Facebook really wants to be a part of it.

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