Oculus VR’s page on Facebook describes it as “a technology company revolutionizing the way people experience video games.” But Mark Zuckerberg & Co. clearly sees the Oculus Rift headset and its potential successors it as much more than that, having agreed to shell out about $2 billion in cash and Facebook shares to acquire the “transformative and disruptive technology, that enables the world to experience the impossible,” as Brendan Iribe, co-founder and CEO of Oculus VR puts it in a release. “And it's only just the beginning.”
In a conference call discussing the acquisition, “Zuckerberg called out virtual reality as one of the computing platforms of the future —following desktops and mobile — and yes, talked about building Facebook's advertising into it,” reports Richard Lawler on Engadget. “Specifically, he talked about the potential of a virtual communication network, buying virtual goods and, down the line, advertising.”
“In terms of how Facebook would see a return from the future virtual social-networking world that Mr. Zuckerberg alluded to, he mentioned that commerce and purchases of virtual goods are potential ways,” Cotton Delo writes in Advertising Age.
“There might be advertising in the world, but we need to figure that out down the line,” Delo reports he continued, saying that Facebook is “clearly not a hardware company.”
In three videos on Marketing magazine’s site, Georgina Brazier and Matthew Chapman investigate “how the technology works, how a virtual reality roller coaster can feel like the real deal, and the potential experiential marketing possibilities provided by Oculus Rift” in a visit with Henry Stuart, co-founder of Visualise, and Jon Spary, head of new business at Curb.
On Forbes.com, Robert Hof writes that “there could be a huge advertising business in there,” citing the combination of an “immersive experience” with the social capabilities of the VR platform. But, he hangs on Zuckerberg’s phrase “‘down the line,’ meaning years away.”
So, too, does Pivotal Research analyst Brian Wieser, who is cited by Hof. He “told clients that all the applications mentioned by Zuckerberg are ‘all a fair degree away from social media and even further away from ad sales, at least so far as we can envision the medium today.’ While he’s sanguine about the acquisition, he adds, ‘If we have concerns, it is that $2bn seems like a significant amount of money for a problem that has yet to emerge.’”
After recalling a visit by Facebook executives, led by Zuckerberg, to Oculus VR’s offices in Irvine, Calif., a few months ago to see what it was up to, the Oculus team came away with the feeling “Mark and his team share our vision for virtual reality’s potential to transform the way we learn, share, play, and communicate,” they write on the company blog. “Facebook is a company that believes that anything is possible with the right group of people, and we couldn’t agree more.”
They conclude: “We’ll see you in the Metaverse!”
In his own post on Facebook, Zuckerberg writes: The incredible thing about the technology is that you feel like you're actually present in another place with other people. People who try it say it's different from anything they've ever experienced in their lives.”
Oculus had its origins on Kickstarter, as Dara Kerr reports on CNET. (Full Disclosure Dept.: So, too, did my niece Meghan’s “Harlequin Creature Presents: Time Travel With Typewriters” project). And, as you might imagine, some of the early backers of Rift are angry about the deal. (“I feel cheated”; Thanks for selling us out Palmer!” “Disgusted. Did you have to stoop so low?”)
“I would assume this would have been the most successful exit for a company that got started on Kickstarter,” Gartner consumer technologies analyst Brian Blau tells Kerr. “It's a good platform for different technology and innovation, and Oculus falls right into that category.”
PopSugar’s Nicole Nguyen has a video of Oculus Rift inventor Palmer Luckey, a 21-year-old college dropout, speaking last month about his vision of VR’s future at the 2014 D.I.C.E. Summit, an interactive entertainment conference for video-game designers and developers
We will leave it to the financial wizards who are increasingly being drawn to Madison Ave. instead of Wall St. — as William Launder’s piece in the Wall Street Journal’s new “CMO Today” section informed us a few days ago — to devise why a messaging service that is overtly hostile to advertising is worth “$19 billion” while a social platform that could “change the way we work, play and communicate,” as Zuckerberg put it yesterday, is worth only $2 billion. Surely there’s an algorithm for that, right?