Facebook Buying Oculus Isn't the End of the World

At least, not yet.

“Facebook ruins everything.”

It was the first thought in my head as I saw the news of Facebook’s Oculus VR acquisition hit the wire. But as the bewilderment and disbelief started to fade and reality began to sink in, I realized Facebook buying Oculus VR may not be a bad thing. In fact, it could be exactly what the startup and virtual reality as a whole might need. At least, for now.

Facebook to Acquire Oculus VR for $2 Billion

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In spite of the tremendous hype surrounding virtual reality amongst the games industry and enthusiasts, the mass market appeal for VR has yet to be proven. For many, VR is still closely associated with the earliest manifestations of the 1980s and 90s — Virtual Boy, gimmicky shopping mall attractions, etc. — and it’s a stigma that may be tough to shake. Anyone who tries the Rift immediately understands the difference, but creating opportunities to experience the product, let alone commanding attention long enough to generate curiosity is not easy, especially for a start-up led by inventors, gamers, and engineers.
Facebook’s brand equity and immense marketing resources could help propel Oculus and the Rift from niche market darling to a household name. To gamers and VR purists, mainstream awareness may seem insignificant — or could even sully Oculus’ mission — but it’s critical to broader adoption, and subsequently, greater interest and investment by content makers. The more consumer interest there is and the more units there are in the wild, the more lucrative the platform will be for game developers and app makers.
Another important takeaway from this week’s announcement is Facebook’s seeming lack of interest in making margins on hardware sales. “We’re not going to try and make a profit off of the devices long-term,” Facebook CEO Mark Zuckerberg said. “We view this as a software and services thing.” As a result, Oculus will have the freedom to price the retail version of the Rift low enough to be accessible for more cost-conscious consumers. In an interview with IGN, the company’s leadership emphasized how Facebook’s resources will allow them to purchase components at lower prices, build units at a significantly larger scale, and ultimately at a lower cost to consumers.

Of course, since Oculus hadn’t committed to a price or release date prior to the acquisition, we’ll never know how much the final product will differ from the company’s original plans, but if the goal is to build a large install base, keeping costs as low as possible would seemingly be paramount.

Facebook Buying Oculus - What Does It Mean for Gaming?

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But for all of the benefits — both theoretical and actual — there are legitimate concerns. Facebook is a business built upon commoditizing and monetizing its users. Despite its stringent emphasis on privacy, Facebook targets advertising and other promotional campaigns based upon a user’s age, sex, location, interests, and browsing behavior. In Zuckerberg’s own words, Facebook sees great value in Rift as a platform for “software and services,” which suggests a heavier handed approach to the Rift's functionality. While Facebook’s influence may not be evident for months or even years, it ultimately intends to build and monetize a business out of Oculus and the Rift.

The big question, however, is how.

Facebook and Oculus are such an odd pairing that it’s not immediately clear how the social networking giant could establish a meaningful revenue model in VR. In the wake of the announcement, countless Photoshopped images and memes have emerged, depicting VR Facebook news feeds, Farmville Simulator, a VR game emblazoned with ads, and the like. Though exaggerated for the sake of satire, the point the community is trying to make isn’t completely without merit — Facebook's homepage is laden with contextual advertising and promoted posts.
But if you look at how Facebook has approached other acquisitions, specifically Instagram, its influence has been subtle — if not completely unrecognizable. Nearly two years later, the only major change has been the small, non-invasive, and, most importantly, optional sharing and linking of data between Facebook and Instagram.

Oculus Rift Development Kit 2 Hands-on

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It’d be naive to think that Facebook won’t significantly alter how Oculus and the Rift evolve in the long-term, but it’s also unfair to assume that it will be inherently negative for users. In fact, VR’s unproven viability on a broad scale makes it all the more imperative for Facebook to ensure its efforts don’t diminish the experience. For now, Facebook claims it will be hands-off and will offer more potential benefits than drawbacks — lower costs, greater scale, and backing that will make Rift a more alluring platform for developers.

At some point, existing and prospective Rift owners may have to decide whether or not they want to volunteer themselves and their data to Facebook's ecosystem of services and software — regardless of whether it's intrusively designed or not — but for now, in spite of appearances, Oculus is in an advantageous position and we should all feel cautiously optimistic.