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Oculus sale meets mixed reactions from developers

Oculus sale meets mixed reactions from developers

Wed 26 Mar 2014 8:04am GMT / 4:04am EDT / 1:04am PDT
BusinessHardwareDevelopment

Notch bows out, CCP remains on board, Carmack keeps coding

An acquisition by Facebook is always going to make you unpopular in some circles, but if your company has close ties with developers, you might feel the backlash more keenly than most.

And so it is for Oculus, which has lost prominent developer support in the form of Mojang after last night's news. Mojang had been considering a "slimmed down" version of Minecraft for the VR device, but soon after the deal went public, Notch tweeted that he would no longer be working on the platform, stating that "Facebook creeps me out."

Notch had been an early and prominent investor in the Rift project, dropping $10,000 of his own money into the Kickstarter fund which catapulted Oculus into the public eye. In a more detailed explanation of the decision to step away from the platform on his blog, Notch expressed his admiration for the company and its technology, but disappointment that his investment had been used to "build value for a Facebook acquisition."

"Facebook is not a company of grass-roots tech enthusiasts," the developer wrote. "Facebook is not a game tech company. Facebook has a history of caring about building user numbers, and nothing but building user numbers. People have made games for Facebook platforms before, and while it worked great for a while, they were stuck in a very unfortunate position when Facebook eventually changed the platform to better fit the social experience they were trying to build.

"Don't get me wrong, VR is not bad for social. In fact, I think social could become one of the biggest applications of VR. Being able to sit in a virtual living room and see your friend's avatar? Business meetings? Virtual cinemas where you feel like you're actually watching the movie with your friend who is seven time zones away?

"But I don't want to work with social, I want to work with games.

"Fortunately, the rise of Oculus coincided with competitors emerging. None of them are perfect, but competition is a very good thing. If this means there will be more competition, and VR keeps getting better, I am going to be a very happy boy. I definitely want to be a part of VR, but I will not work with Facebook. Their motives are too unclear and shifting, and they haven't historically been a stable platform. There's nothing about their history that makes me trust them, and that makes them seem creepy to me.

"And I did not chip in ten grand to seed a first investment round to build value for a Facebook acquisition.

"I have the greatest respect for the talented engineers and developers at Oculus. It's been a long time since I met a more dedicated and talented group of people. I understand this is purely a business deal, and I'd like to congratulate both Facebook and the Oculus owners. But this is where we part ways."

Whether or not other developers are put off by the involvement of Facebook, this marks a massive step out of the company's comfort zone in terms of hosting gaming content - Farmville this ain't. That said, gaming is also almost certainly not Facebook's key motivation here anyway, so I doubt that Zuckerberg is going to be posting many begging letters to Sweden today.

Notch's rejection is unlikely to sting quite as much when you've got $2 billion burning a hole in your back pocket, but it's nonetheless reflective of the thoughts of a number of early backers of the Rift, who felt that their investment was emotional as well as fiscal. A significant portion of the public's reaction has been dismay married to shock, alongside a burgeoning resentment. Many doubt the ethical standpoint of the social network and concerns, albeit premature and currently unfounded, are being voiced about incursions into privacy and the harvesting of data and content transmitted through the device. That many of these fears have been expressed through the medium of Facebook itself is an irony which does not go unnoticed, although the device's Facebook page is itself awash with negative feedback.

The disappointment is far from universal, however. Facebook's commitment to honouring Oculus' current gaming commitments and the pursuit of further gaming applications has to be taken at face value, and there are likely to be plenty of developers who are happy to stay on board with a globally recognised multinational. One of those developers, and the deal's highest-profile industry supporter at the moment, is CCP.

CCP's Eve Valkyrie has been the title which has been trotted out whenever someone with VR tech has really wanted to wow a player. It was undoubtedly the star of the short line-up of demos on display for Sony's Project Morpheus at GDC last week and has been developed from the ground up as a VR experience, planned as a day one PC title for the consumer launch of Oculus Rift. David Reid, CCP's chief marketing officer has issued a statement of support.

"We're very excited for our friends and colleagues at Oculus," Reid told Engadget. "We share their vision about the future of VR and gaming and are looking forward to participating in the consumer launch of the Oculus Rift with EVE: Valkyrie."

John Carmack is another figure which people have been gauging to test the waters on the deal, but he's remained in full diplomacy mode, indicating that his work is unaffected and that he sees the deal as solving some major issues going forward.

As a technologist first and a game developer second, Carmack might be expected to welcome a sudden growth in R&D budget - he's almost certain to be involved with the top level decision making on how Facebook will be putting its newest acquisition to work.

nDreams is another studio with a heavy VR investment. CEO Patrick O'Luanaigh told GamesIndustry International that his outfit has a specially dedicated internal VR team and is working on multiple VR projects, for both Oculus and Sony's Project Morpheus. He was surprised by the deal, but sees a positive future for both parties.

"I must admit to be pretty shocked about the news today," O'Luanaigh wrote. "I'm not surprised that Oculus sold, as launching a new piece of hardware globally is a big ask, and having a large partner makes this much easier for them. But I am surprised that Facebook are getting into the hardware business.

"Tech-geeks are up in arms, but I strongly suspect that the mass-market don't feel the same way about Facebook.

"Palmer Lucky's Reddit post is interesting - for him, it's about 'bigger, better and quicker'. I just hope that Facebook focus on giving Oculus the money to do it right, make it easy to share experiences and games with friends, but leave it at that. I've been fortunate enough to visit Oculus's HQ in Irvine, and they're an incredibly talented and fast-moving company. If Facebook are smart enough not to change anything else, this could be a great deal for both parties. Put it this way - Oculus's launch budget just went up tenfold..."

27 Comments

Jakub Mikyska CEO, Grip Digital

202 1,107 5.5
Popular Comment
I think that Notch is absolutely right. We can speculate whether or not Facebook is a good fit, but it is definitely not the future the backers of their Kickstarter campaign had in mind. I am really glad I didn't support them, because now I would want my money back.

Everybody was afraid that there will be a Kickstarter campaign when someone will just take the money and run away. In my opinion, that's exactly what Oculus did with the Facebook acquisition.

And one side note, it's amazing how all the Sony's competitors keep shooting themselves in the leg. 24 hours ago, we were speculating whether Project Morhpeus can succeed against Oculus. Now, we ask whether Oculus with Facebook is still relevant, while we have Morpheus in the works. Amazing.

Posted:6 months ago

#1

Dan Tubb Investment manager, Edge Investment Management

25 125 5.0
Popular Comment




Now if OR was only a product for geeks, I would obviously buy one, so would almost anyone actually reading this comment, but there are not enough of us. If Facebook succeed in securing a mass install base for VR, so that almost everyone that had a PC also had VR plugged into it, that would allow a huge variety of niche games to be viable.

Posted:6 months ago

#2

Tom Keresztes Programmer

683 335 0.5
Popular Comment
It is no accident that the rise of the Indies occurred on the PC and Mobile, not the Xbox and PS.
Perhaps the fact that they were not allowed to self publish on the consoles also was a contributing factor.

Posted:6 months ago

#3

Felix Leyendecker Senior 3D Artist, Crytek

182 202 1.1
Popular Comment
I wonder how all these casual mass-market applications are supposed to work. Watching a tennis game, having a virtual boardroom meeting. How?

Tennis or other sports. It could be just a 360deg panoramic video feed, and the headtracking could determine where you look. Fair enough. If what you are watching is far enough away so parallax doesn't play into it, it could work.

Boardroom meeting, consulting your doctor, virtual chatrooms? How is it supposed to work? With a camera feed? So you can see other people with ski goggles strapped to their head in VR? Or with realtime 3D animation? Kind of like Second Life in VR? I doubt it would have a huge mass market appeal, and it would be non-trivial to implement a technical solution for this. Especially on mass-market devices or phones.

Posted:6 months ago

#4

Dan Tubb Investment manager, Edge Investment Management

25 125 5.0
Perhaps the fact that they were not allowed to self publish on the consoles also was a contributing factor.
I think there were a lot of factors. That one being a big one certainty.

However, I would suggest that even you were allowed to self publish, the level of innovation on a install base of PCs at 2.4bn would have been much better than 200 million consoles, which themselves were split over multiple types and iterations.

Edited 2 times. Last edit by Dan Tubb on 26th March 2014 11:57am

Posted:6 months ago

#5
Independence is key, the Facebook tie in is a massive negative for a focussed Ames related development. Notches sentiments are spot on!

Posted:6 months ago

#6

Tom Keresztes Programmer

683 335 0.5
on a install base of PCs at 2.4bn would have been much better than 200 million consoles, which themselves were split over multiple types and iterations.
I think the PC market also has the fragmentation factor - Steam is the only place where you can get reasonably reliable stats about the actual market. PC is a very fragmented factor, not all of them are actually used or usable for gaming. And getting this product to the users is not quite as straightforward as one would hope. I wonder if we, as a developer should target Steam only as the there is very little information on the "other" digital markets - i have no idea how many active users have, for example, and what is their attachment ratio.

Posted:6 months ago

#7

Doug McFarlane Co-Owner, KodeSource

39 36 0.9
Popular Comment
So a bunch of 'investors' of the Kickstarter campaign are about to come into some money? Is that how it works? :)

This will / should hurt Kickstarter. Who wants to 'invest' into a company that could be sold for a huge profit, and you don't even at least get your original contribution back? Forget about a profit! And sold to a company that doesn't share your morals (wait, does Facebook have morals?). There should be a Kickstarter clause to refund contributions in these cases. Sure, they could have blown all the money, and you'd get nothing anyways, but the fact that they succeeded - and then sold out. Ouch. Face. Slap.

Posted:6 months ago

#8

Dan Tubb Investment manager, Edge Investment Management

25 125 5.0
Doug, I think you raise a really important question.





Posted:6 months ago

#9

Steve Bauman Senior Designer, Wargaming.Net

4 1 0.3
According to Notch, "Facebook has a history of caring about building user numbers, and nothing but building user numbers."
Wasn't that Notch's goal too? If not, why make a free demo version of Minecraft? (Admittedly, that's a bit of a cheap shot, since he doesn't seem to believe they care about their users, and presumably he does.)

"People have made games for Facebook platforms before, and while it worked great for a while, they were stuck in a very unfortunate position when Facebook eventually changed the platform to better fit the social experience they were trying to build."
That's a risk everyone faces developing for someone else's platform. Valve could change something tomorrow for their own business that could impact every Steam product, and if I was making some sort of mod for Minecraft, Notch himself might change something for the betterment of Minecraft in general that would negatively impact my mod.

Posted:6 months ago

#10

Andrew Jakobs Lead Programmer

239 98 0.4
who cares about what notch says, he also said Minecraft wouldn't be coming to xbox 360 or the xbox one... but then he changed his mind because those platforms would make him more money.. Also IMHO minecraft isn't really a game, it's more a social gathering with being able to build stuff, it doesn't really have a goal like a real game..

Posted:6 months ago

#11

Nick Wofford Hobbyist

180 190 1.1
@Jakub
What were the backers on KS promised that they didn't receive? To my knowledge, the Kickstarter didn't have the stipulation that the OR team had to live like paupers for a decade before being allowed to make money. That's absolutely ludicrous. Personally, the developers (read: Notch) who don't like this are just mad because they wish they had an idea that would sell for 2 billion dollars. Sorry Notch, Minecraft ain't that idea.

@Doug
That's confusing a Kickstarter with investing. As a backer, you're entitled to what you pay for. Nothing more. If Wasteland 2 sells 30 million copies, the backers get nothing more than what they paid for. No dividends to pay out, etc... Most backers get this; the vocal minority of (ignorant, in my opinion) angry backers don't.

Posted:6 months ago

#12

Bonnie Patterson Freelance Narrative Designer

159 432 2.7
@Nick Wofford - Minecraft's already made over 2 billion profit in the last couple of years.

Posted:6 months ago

#13

Rick Lopez Illustrator, Graphic Designer

1,269 942 0.7
The magic Occulus rift had when it was independent is lost through facebooks aquisition. And this is coming from a guy who isnt really interested in VR, but i did admire the drive and passion these guys have.

Right now... they sold that to facebook.

Posted:6 months ago

#14

Abraham Tatester Producer

71 53 0.7
Imagining an Oculus Rift that forces me to log into an FB account I will never have, I say, "no thanks."

For me, that's the big question: will I be able to use the device without FB integration? If I won't, I'll be looking at the competition...and I think the competition will thrive if that's the case.

Posted:6 months ago

#15

Nick Wofford Hobbyist

180 190 1.1
@Bonnie
That's over 2 years versus $2B over 3 days (the apparent time it took to close the deal). That's an effortless $2B as well. They've still got the tens of millions from other investors. Then the money they make from the release will add to that. OR just made the easiest two billion in the industry, and in my opinion, some developers are just being jealous about it.

Posted:6 months ago

#16

Brook Davidson Artist / 3D design

83 223 2.7
I have to agree with Nick.

Just because Facebook now owns Oculus really doesn't change much if anything at all. All it means is the the Oculus will now pretty much be developed faster and better.

As for Notch, I feel it's pretty immature to go back on his words simply because the product he likes is now owned by someone else.

This deal just happened, no one has even bothered to even wait before they decide what to think. Instead everyone jumps to conclusions, whines and complains about things that have not even happened yet, if they ever will.

I can understand Notch backing out IF they start doing things the way he doesn't like, but that hasn't happened yet. He backed out well before he even gave it the slightest amount of chance.

Posted:6 months ago

#17

Greg Wilcox Creator, Destroy All Fanboys!

2,193 1,170 0.5
Oh, I dunno.... let's see:

Nice new tech with lots of lots of LIMITED testing on a handful of guinea pigs (developers, lucky journalists and a bunch of others who've trumpeted about it and developer grannies who get amazed at anything tech-y at their ages) goes public and released to the masses as the "next big thing" not realizing that putting VR for all out when it's not gotten proper tests for side effects from a LARGER pool of subjects.

What could possibly go wrong?

https://www.youtube.com/watch?v=i5jTH89HjTA

Eh, we'll see... I bet that thing gets a MUST READ disclaimer/waiver that needs signing so no one gets sued before it's even used.

Posted:6 months ago

#18

Anthony Gowland Lead Designer, Outplay Entertainment

198 660 3.3
Minecraft's already made over 2 billion profit in the last couple of years.
Has it? Wikipedia has it that as of February 3, 2014, it's sold over 35 million copies across all platforms.

Even if you assume those numbers are way low, and it's really sold 50 million. And assume it's made a profit of $35 per copy (it definitely hasn't, it doesn't sell for anywhere near that on most platforms). That's still under 2 billion.

Care to share the source for your claim?

Posted:6 months ago

#19

Klaus Preisinger Freelance Writing

1,135 1,171 1.0
The value of Facebook is the promise of profitability, not the profitability of something right now. Zuckerberg can sell that promise like no other. This is how he found investors to pay for Facebook's growth in the absence of a revenue model. It is why Instagramm and WhatsApp were bought without anybody having an idea about how to make money off those services and it is for the same reason Oculus Rift fits in there more than any place else.

Also imagine the 21 year old (!) Palmer Luckey meeting with other potential buyers from other companies. Zuckerberg is 29 and could basically pass as his big brother. Who can compete with that generational advantage when talking?

Posted:6 months ago

#20

Andrew Goodchild Studying development, Train2Game

1,254 421 0.3
@Anthony, not sure about $2 billion, that does sound high, but you didn't factor Minecraft books, minecraft action figures, t-shirts and Minecraft licenced Lego. I know a few 9 years olds who are obsessed enough to buy a lot more than the game.

Posted:6 months ago

#21

Steven Wemyss Senior QA Engineer, Avalanche Studios

33 31 0.9
What will change is, that Oculus will be integrated into the FB business model, this means the product has to serve the FB social network, it has to help generate ad revenues, this change is a change to the core business model of Oculus.
Nope, what will change is Facebook and Oculus will be using their new financial clout to attempt to bring the VR headset to the mass market. Facebook are playing a long game with this one and see VR as potentially the next Smartphone or TV and they want to get an edge on the competition. OR is just a peripheral, what Facebook are really interested in is the mass market potential of this item. This investment gives them access to a big headstart on the tech and the chance to push that tech out to the masses so they can then push their own software platforms which is the real deal for FB! They see OR as potentially the new "iPhone" and don't want to miss that boat again!

What they're not gonna do is turn this piece of hardware into the next big social network and restrict it all to hell at the expense of everything Oculus have already built...

Posted:6 months ago

#22

Steven Wemyss Senior QA Engineer, Avalanche Studios

33 31 0.9
You could say exactly the same thing about your smartphone! Of course they are going to devlop their software to work on it, they see this as potentially the next big thing and they mean to be a big part of it. They're hedging their bets on this and starting to drive the market towards that end goal which tbh is a great thing for VR in general.

What they're saying doesn't counter the original vision of the OR or indeed VR in general, anyone who's read the likes of Snow Crash, watched the likes of Ghost In The Shell or watched countless sci-fi films or programs can see the potential for VR beyond gaming. Imagine a world where instead of Skyping your friends or family you simply don your VR headset and can see and interact with them via their avatar, or the example they gave was going to a virtual gig and experiencing things from the POV of someone actually there. The immersion factor is the defining characteristic of VR, the much hyped "presence" and that extends way beyond just games.

Gaming will still be a major part of it and we will make up the majority of the early adopters, what people seem to be crying about is the fact that it can no longer be said to be targeting only gamers and that's just stupidly selfish and short sighted.

Posted:6 months ago

#23

Sandy Lobban Founder and Creative Director, Noise Me Up

315 208 0.7
I'm 100 percent with Doug on this in regard to the kickstarter campaign backers. They have effectively acted as a charity for venture capitalists. I do believe VR needs the investment to take off, but I'm not sure I can support this until the kickstarter backers are included in some way. Whether its right or wrong, it's going to result in a loss of the "from the ground up" respect they had from developers going forward, I feel. I guess its imporant to think twice about what you back in future. Just for the record, I didn't back the kickstarter.

Edited 1 times. Last edit by Sandy Lobban on 27th March 2014 3:59pm

Posted:6 months ago

#24

Donald Dalley Freelance writer

52 38 0.7
Up top, there is a lead in to another post indicating that "casual games just don't pay the bills anymore". OK, so how are you all who are interested in VR going to make VR pay? It's going to take an awful lot of good games to start making inroads into fields that will make VR pay in games, so what are you going to do? If you forget about or lock yourself out of the social part, what kind of games will pay your way? You need an installed base of VR tech, whether it is OR or someone else's, so I don't see this paying many bills in the near future. Can you make money in VR in 5 years? Ten years? If not, when?

Posted:6 months ago

#25

Curt Sampson Sofware Developer

596 360 0.6
A mass install base is key. The reason we see such innovation on the PC is because the PC has 2.4bn users.
PC has 2.4 billion users, yes, but nowhere near 2.4 billion gamers. The PC gaming market has fewer consumers than the console gaming market, which in turn has fewer than the non-console (i.e., phone and tablet users who have actually played one or more games) mobile gaming market. Yet, if you look at innovation in these markets, it seems roughly inversely proportional to the number of consumers in it.

There are various reasons for this, but one is that "mass market" is not about innovation. Innovation happens in the "niche" markets.

Edited 1 times. Last edit by Curt Sampson on 29th March 2014 9:53pm

Posted:6 months ago

#26

Dan Tubb Investment manager, Edge Investment Management

25 125 5.0
Curt, yes, the point about the total PC install base is potential market, not active market participants. I had hoped I was being clear that I was talking about the very top of the funnel, not the active market. Sorry if that was not obvious.



Quoting DFC Intelligence: http://www.dfcint.com/index.php







The 270m core gamers are the primary games buyers obviously, and NewZoo http://www.newzoo.com/ come up with a lower figure for number of PC gamers, but makes the relevant comparison:


I would be genuinely interested to know where you are getting the information that there are more console gamers than PC gamer?

Edited 1 times. Last edit by Dan Tubb on 31st March 2014 12:39pm

Posted:6 months ago

#27

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