The news that Facebook has acquired Oculus for $2 billion of cash and stock hasn’t been met with universal approval from the tech community. The heads of Oculus are aware of the concerns, but they're confident that this move will allow them to create a better virtual reality product and, perhaps most importantly, launch it at a lower price.
Oculus has often struggled with the fact that it’s a relatively small company making relatively small orders for components and technology. That limits what hardware they can put into the Rift headset, and it also limits how far they can push the technology using custom hardware. The deal with Facebook changes what will be possible with the retail hardware.
"Overall, it’s going to be a better product at a lower price," Oculus founder Palmer Luckey told Polygon.
And yes, it’s still going to focus on gaming.
This is a gaming device
"If anything it makes us more of a gaming company. We’re going to be working on different things, but we’re going to be putting a huge number of people in gaming that we wouldn’t be able to otherwise," Luckey said.
"We’re going to be able to do a lot more in gaming with this partnership. The idea that we’re going to move resources out of gaming to somewhere else is just not going to happen," he continued.
He repeated the point one more time for emphasis. "The games industry is going to drive virtual reality right now, because the gaming industry is the only one equipped to make immersive, interactive 3D worlds. That’s going to continue to be the case for a long time. We’re gamers, we want to play games, that’s why we’re doing this."
So why make this deal with Facebook? The conversation kept coming back to hardware. Facebook has the name recognition, money and pull that will make hardware companies listen, and they have the ability to order in bulk. "We can do these higher minimum orders and these component relationships that for the most part only larger companies can do," Oculus CEO Brendan Iribe told Polygon.
As Iribe describes it, this is the pitch that Zuckerberg made to Oculus. "We don’t have to make a big margin on the hardware, and you guys do right now… we’re a software platform company," Zuckerberg said, as quoted by Iribe. "If we do this together, we can ship this thing at cost and buy in bigger scale and we can support you on relationships with custom components that you couldn’t get otherwise."
For a company that was started by, if you'll excuse the term, hardware geeks, this sort of pitch proved irresistible.
"There are things ... having a $100 billion plus company behind you can do that you can’t do on your own."
In the past Oculus has had to get creative with the components in the Rift and what components they could conceive of using in the hardware. Those days are over.
"We’ve been leveraging the mobile market so far. That can only go so far, it takes a lot of money to develop new display technologies and other technologies that will be relevant to virtual reality," Luckey said. "There are things that piles of cash and having a $100 billion plus company behind you can do that you can’t do on your own."
This acquisition opens up a whole new world of possibility and hardware. "There are a lot of things we’ve had on our minds, there are things we wanted to do that weren’t economically viable for our consumer product," Luckey said. "We’re going to be able to do those things now."
Luckey paused for a minute. "I wish I could tell you!" he said.
One hint may have been dropped on Reddit. "We can make huge investments in content," Luckey posted. "More news soon."
Oculus’ Nate Mitchell echoed Luckey's enthusiasm, and described how Oculus planned the Rift hardware. They had one roadmap of the things they knew they could do, and they had another roadmap of things they would love to do if they had, as Mitchell put it, "infinite resources."
"We’re going to be following that roadmap, moving forward," he said.
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