Welcome to the VR social: What to expect from Oculus in the Facebook era

Despite doom-saying, the acquisition could prove beneficial for all involved.

Read the whole story

 

[BoogieWonderland]

gruntledgoat[/url]":2u7g5v5m]

BoogieWonderland[/url]":2u7g5v5m]As a reference point, Disney bought Marvel and Lucasfilm for approximately $4 billion each.

I'm having a really hard time finding in Oculus a revenue generation potential that is at least half that of established money-making machines such as Star Wars or the Marvel Universe.

I'm really interested in seeing how -and if- Facebook manages to make a profit out the acquisition of Oculus. Oh, and Whatsapp, too.

These were not all-cash deals. How much does Facebook stock cost Facebook?

I'm merely comparing valuations. I find it difficult to justify that two Oculus are worth one Lucasfilm. But obviously that's just my opinion.

Yours is a fair point, however. If Facebook stock is overvalued -which, in my humble opinion, is the case- it makes sense to pay for something in stock instead of cash, and one could say that the "real" valuation of Oculus is lower.

 

[sigma8]

"The magic really set in when I was able to see him turn his avatar head toward me to meet my glance."

wow, have you never used a VR headset before? This has been happening since the 90's at least. The big deal with OR is that it was going be cheap enough and light enough to be viable for the mass market. The tech itself is very old, in terms of technology-time.

Heck, it's almost as old as LaserDisc!

 

[foreignreign]

Quiet Desperation[/url]":ixqsmzwp]So how would the supporters of this deal feel if the buyer was Apple?

... unfazed?

 

[PhysicalEd]

With Carmack working there now at the very least I expect better framerates out of Facebook.

 

[Deleted member 174040]

Quiet Desperation[/url]":34jza9au]So how would the supporters of this deal feel if the buyer was Apple?

Apple would not have blogged about it, and I doubt the founder would have been on reddit.

 

[thormaximus]

While many may see this as big negative, perhaps we should see this as a positive. Many startup companies suffer from running out of funding and leaving, what could be great products sitting on development hell. However, Facebook does have the money and the mass reach to make this a success. I am an optimist, so I will just wait and see.

 

[TMilligan]

I don't quite understand the valuation of Oculus, or many of the crazy high acquisitions in the tech sphere.

 

[twocows]

thormaximus[/url]":z30gus12]While many may see this as big negative, perhaps we should see this as a positive. Many startup companies suffer from running out of funding and leaving, what could be great products sitting on development hell. However, Facebook does have the money and the mass reach to make this a success. I am an optimist, so I will just wait and see.

If all they needed was money, an IPO would have left them at least in partial control of their own company and they probably would have gotten a lot more than some volatile Facebook stock and some cash. Right now, they're completely beholden to Facebook (whether they know it or not), PR lines about independence (something that literally every corporate acquisition says) be damned.

 

[Ravenlord]

“Oculus is going forward in a big way, but a way that still lets me focus on the community first, and not sell out to a large company.” — Rift creator Palmer Luckey in 2012

 

[HonorableSoul]

To me this deal smacks me like a company buying out the local water company for $2 billion more. How can you argue this is not anticonsumer? They are going to have to at least $2 billion more to make a profit.

Doesn't kickstarter have rules for the use of funds and buyouts of the techology it's money researched?

In any case would the kickstarter investors have a case?

 

[Ravenlord]

lordcheeto[/url]":2aycq5bt]
They have stated that no Facebook login will be required. As the article said, even Instagram never instituted that requirement, and it would make more sense for them to.

A little over a year ago Luckey said "“Oculus is going forward in a big way, but a way that still lets me focus on the community first, and not sell out to a large company.” So you'll have to excuse us if your defense of him stating that Facebook login will not be required is taken quite lightly. I believe that he believes it when he says that, but I also think that he believed not too long ago that he wouldn't sell to a large company.

 

[foreignreign]

HonorableSoul[/url]":2053xdh2]To me this deal smacks me like a company buying out the local water company for $2 billion more. How can you argue this is not anticonsumer? They are going to have to at least $2 billion more to make a profit.

I guess I missed the part where Facebook had their own VR tech and bought out Rift because it was competing with Facebook.

 

[tmeader]

charleski[/url]":20ei6v72]
Well, in hindsight it's easy to see the precursors of that explosion.

And hindsight is ALWAYS 20/20. That's the entire point. You just said it yourself. You ONLY see it in hindsight.

 

[gruntledgoat]

Ravenlord[/url]":1bnwelqb]

lordcheeto[/url]":1bnwelqb]
They have stated that no Facebook login will be required. As the article said, even Instagram never instituted that requirement, and it would make more sense for them to.

A little over a year ago Luckey said "“Oculus is going forward in a big way, but a way that still lets me focus on the community first, and not sell out to a large company.” So you'll have to excuse us if your defense of him stating that Facebook login will not be required is taken quite lightly. I believe that he believes it when he says that, but I also think that he believed not too long ago that he wouldn't sell to a large company.

First I want to applaud your decade of lurking!

Talk is cheap, and when you're relying on dribs and drabs of donations to stay afloat you probably will say just about anything, and you might even believe it. I think a lot of folks are totally ignoring the fact that Oculus was in an insanely dangerous position with respect to Sony and Microsoft letting them do the heavy lifting and then simply eating their lunch. Just look at Ouya, they had a great round of crowd funding, did the impossible and actually launched with exclusive titles, and then what? They have no war chest to buy into the marketplace like Microsoft. They have no huge CE corporation behind them like Sony did with the PS1. So where is Ouya now after doing everything right? Just because you can get a lot of people to help you get your idea off the ground doesn't mean squat in the environment they are playing in. MS can whisper "Kinect Goggles" in the right ears and Oculus is toast.

 

[thormaximus]

twocows[/url]":1rm836un]

thormaximus[/url]":1rm836un]While many may see this as big negative, perhaps we should see this as a positive. Many startup companies suffer from running out of funding and leaving, what could be great products sitting on development hell. However, Facebook does have the money and the mass reach to make this a success. I am an optimist, so I will just wait and see.

If all they needed was money, an IPO would have left them at least in partial control of their own company and they probably would have gotten a lot more than some volatile Facebook stock and some cash. Right now, they're completely beholden to Facebook (whether they know it or not), PR lines about independence (something that literally every corporate acquisition says) be damned.

True, but IPOs are a tricky thing to begin with. Stocks can go up or tank, so it is a tougher decision to go that route when you have a company like FB give you 2 Billion dollars, and saying that nothing will change. But as many people are saying...this can go way down and the Occulus will be nothing more than "what could have been". On the other hand, this might be the push that Occulus needed to move beyond prototype to a consumer reality. However, at this point in time all we can do is speculate about its future. Only time will tell.

 

[matt_w]

HonorableSoul[/url]":s3ffh2vl]To me this deal smacks me like a company buying out the local water company for $2 billion more. How can you argue this is not anticonsumer? They are going to have to at least $2 billion more to make a profit.

Doesn't kickstarter have rules for the use of funds and buyouts of the techology it's money researched?

In any case would the kickstarter investors have a case?

Kickstarters are not investors by any sense of the word. They are just pre-ordering a product. In this case the kickstarter was pre-ordering the dev kit 1.

 

[PonyExpress]

When talking about Facebook, we should keep in mind that Facebook.com and Facebook Inc are two completely different things. The social network appears to be a business unit whose revenue is currently shrinking and it will be continue to do so for the foreseeable future, and the parent corporation is trying to diversify their sources of income by purchasing companies.

Having said that, it is clear to me that the purchase of Oculus is a corporate move but with little relationship with the social network beyond sharing some branding.

 

[jimisawesome]

BoogieWonderland[/url]":1p9onjvr]

gruntledgoat[/url]":1p9onjvr]

BoogieWonderland[/url]":1p9onjvr]As a reference point, Disney bought Marvel and Lucasfilm for approximately $4 billion each.

I'm having a really hard time finding in Oculus a revenue generation potential that is at least half that of established money-making machines such as Star Wars or the Marvel Universe.

I'm really interested in seeing how -and if- Facebook manages to make a profit out the acquisition of Oculus. Oh, and Whatsapp, too.

These were not all-cash deals. How much does Facebook stock cost Facebook?

I'm merely comparing valuations. I find it difficult to justify that two Oculus are worth one Lucasfilm. But obviously that's just my opinion.

Yours is a fair point, however. If Facebook stock is overvalued -which, in my humble opinion, is the case- it makes sense to pay for something in stock instead of cash, and one could say that the "real" valuation of Oculus is lower.

I am not a believer that VR is anywhere close to being the next big thing but it still has much more potential then the Disney deals have. Disney overpaid like crazy for Star Wars and Marvel. With the huge success of Avengers that changed the payoff date from 14 plus years to 12 years. And that only works if Comic Book movies continue to be big money makers and with Marvel Films so far only RDJ is a sure fire profit center. Star Wars is not much different the next trilogy if it does what the previous 2 have done at the box office will still not be close to paying off the purchase.

Oculus could end up going Kinect in the market place.

 

[jimisawesome]

HonorableSoul[/url]":l6tpzb7z]To me this deal smacks me like a company buying out the local water company for $2 billion more.

Huh? Since when is VR the same as Water? I kind of need one to live and to be clear that would be the water.

How can you argue this is not anticonsumer? They are going to have to at least $2 billion more to make a profit.

Huh? how is a company that has yet to release a product being bought out by another company anti consumer? Especially a company that did not compete in really anything remotely close to this area?

Doesn't kickstarter have rules for the use of funds and buyouts of the techology it's money researched?

I am sure they have rules on how the funds are used aka you cant use it as a personal piggybank and must make a good effort to produce the product that people purchased.

Seeing as Oculus has fulfilled their obligations and sent all the people their Tshirts and Dev Kits Kickstarter has no more say in their business matters.

In any case would the kickstarter investors have a case?

Kickstarter users are not investors. Repeat they are not investors. You know how you know if you are an investor? You have equity in the company. No equity you no investor in said company.

 

[Putrid Polecat]

Once again, Facebook, unable to innovate, tries to buy itself out of a steady decline into irrelevance. There is no reason at all why Facebook should actually own Oculus -- if there is some way they can benefit from VR they could write apps for it like everyone else. Instead, they want to present a facade of innovation by co-opting a technology. And really, what are they going to use it for? VR ads? VR crapville? Kids are leaving in droves and users are checking less often.

Not only that, but $2B? After the 16B WhatsApp buy? Smells very strongly of the 2000 dot-com bubble all over again.

 

[CrookedKnight]

I'm fully expecting Oculus to crash and burn no matter who owns it - video screens you put on your face just don't sell - but this way Facebook is holding the bag instead of the actual designers, who get $400 million, a bunch of still-pretty-valuable stock, and a reliable income until the crash-and-burn happens. Good for them!

 

[jimisawesome]

twocows[/url]":140j50hv]

thormaximus[/url]":140j50hv]While many may see this as big negative, perhaps we should see this as a positive. Many startup companies suffer from running out of funding and leaving, what could be great products sitting on development hell. However, Facebook does have the money and the mass reach to make this a success. I am an optimist, so I will just wait and see.

If all they needed was money, an IPO would have left them at least in partial control of their own company and they probably would have gotten a lot more than some volatile Facebook stock and some cash. Right now, they're completely beholden to Facebook (whether they know it or not), PR lines about independence (something that literally every corporate acquisition says) be damned.

Of course weird things can happen but in general the rule is you make more when a company buys you outright then a companies Market Cap is worth.

With Facebook being the buyer you really have to make the assumption that there really was nobody else that thought they would be worth 1.5ish billion or more. This includes IB that are consulted on these deals otherwise they would have told them to go public.

I have my theories why their value is like this. They seem not to have that much in the way of important IP to take VR to market otherwise there would have been a bidding war. They have basically no brand value yeah in tech circles they are talked about but none of my friends and family have a clue who they are but many of them know Sony is making a VR headset now. There are still huge questions about if this will be a market at all especially given the amount of R&D that is needed to bring it to market.

 

[Fstchvy]

Somehow I do not picture people dropping 200-400 bucks on a goofy looking headset to go to virtual parties with facebook avatars. Sounds like a terrible idea... especially after you knock over your beer because you cannot see it... let alone need a refill..

For gaming? It works for sure... especially seeing as people drop 500 bucks on a console or computer... and some people go as far as drop thousands on top end gear and sim interfaces.

It would have made way more sense to partner up with a software developer like Valve or a hardware manufacturer like Nvidia (and leverage their g-sync display partners) or AMD. Even ASUS makes more sense than a social networking site. Trying to shoehorn your tech into a secondary market where usage is cumbersome to the end user will not end well.

People want simple when it comes to social media. That is why smartphones took off. Having to put on a headset (and mess up your hair, a game breaker for a lot of ladies and guys) to talk to someone is not simple. Most people will continue to just skype. Immersive telepresence is not needed for social interaction.

 

[cf18]

I will remain somewhat hopeful. The main problem with Facebook is it don't seems to know what it is doing. Buying Instagram and WhatsApp make some sense since they are potential Facebook killer. This whole shopping in VR vision is total non-sense. People go to Sear/Best Buy to checkout a product and then buy it from cheaper online stores not just to see it in 3D - because they can try it, touch it and inspect the material quality. Non of that are really possible in a VR. A product company only need a take few good photo to list their stuff on Amazon or Newegg. Do they really want to pay extra to build VR ready 3D models of their new toy? Even when a lot of product already has a 3D model by design, do seeing e.g. a Moto360 in VR really make us want to buy it more than seeing the 3D render on their web page?

 

[BajaPaul]

The valuation of some of these tech companies are getting is just astounding! Just doesn't make since. Ever think tech bubble all over again?

They would be better off going out and buying some really good companies and holding them Warren Buffet style. You know, getting something for your money.

If I was a shareholder, I would be pissed off if my CEO was pissing money away like that.

 

[BajaPaul]

You always have to think porn. They blaze the trail the rest of us follow....

Maybe interactive sex? You and your gal put one on, she instantly becomes Kate Upton and you become Brad Pitt and then have real sex together....

I suspect Zuck may be wanting to build a virtual Facebook. Maybe something along the lines of Second Life where we all meet and interact virtually.

Something like this could be used for Skype and Lynx too! Instead of just a video, you interact in a virtual world.

 

[Deleted member 192806]

BajaPaul[/url]":yyqbva1b]You always have to think porn. They blaze the trail the rest of us follow....

So they're the ones to blame for dongles.

 

[CloudStrifeNBHM]

unigolyn[/url]":30x9g6us]After several hours of scouring the internet, I finally turned to Ars to find reasonable discussion on this topic.

Nope, pretty much every comment is still the intellectual equivalent of FACEBOOK TURNED ME INTO A NEWT!

Sigh.

I got better...

Really, though, fully agreed. Personally, I'm conflicted because, while I'm not really trusting of FB corporate, they do have a deep well of technical skill from which to draw. If your goal is to deploy the Metaverse, FB isn't a bad place to start.

 

[EssThree]

unigolyn[/url]":1e8t2fvd]

EssThree[/url]":1e8t2fvd]I want to see what Carmack has to say about this. He's a far smarter man than I, and someone I respect. If he trusts in the acquisition then I will too...

The article you just now (should have) read and are responding to quotes Carmack and links to his tweet about Facebook.

I feel so derpy. I don't even know how I missed that paragraph -_-

 

[fung0]

LLJKCicero[/url]":12klmsto]Now I know what hipsters feel like when their favorite obscure band "sells out."

You put your finger on it. It's not whether the Rift will be a good product, or whether it will have ads, or violate privacy. It's that a small, innovative company has sold out our hopes and dreams.

In a way, we were all part of Oculus. Now it's Zuckerberg's personal toy to play with. I hope the people who sold out to him have many years ahead of them to regret their decision to put money over ideals. They were heroes. Now they're just rich.

 

[ABa]

They're going to rename it to 'Facelook'.

 

[Quiet Desperation]

fung0[/url]":1iofk3n9]Now they're just rich.

Gosh what a terrible fate.

 

[Kevin Lowe]

twocows[/url]":1qc3zzwo]

I'm worried. This was my thing, my ONE thing. It was the one, single thing that I was fully invested in, both emotionally and intellectually.

That's where you, and so many others, are wrong. It's not yours, or mine, regardless of how many Dev Kits we plunked down for. It belongs to Oculus and their investors, to sell to whoever they choose.

 

[bburdge]

Quiet Desperation[/url]":qbo7mhw1]

fung0[/url]":qbo7mhw1]Now they're just rich.

Gosh what a terrible fate.

I know, but someone must suffer.

I want to go on the record here and now and willingly offer myself to such a fate, I am ready to deal with the pain and agony associated with being legally responsible for insane quantities of cash money.

To any out there who were thinking to curse some poor innocent souls with the unfair burden of excess riches, I urge you to reconsider, take a willing victim instead!

 

[fung0]

bburdge[/url]":1i1c7wab]

Quiet Desperation[/url]":1i1c7wab]

fung0[/url]":1i1c7wab]Now they're just rich.

Gosh what a terrible fate.

I know, but someone must suffer.

I want to go on the record here and now and willingly offer myself to such a fate, I am ready to deal with the pain and agony associated with being legally responsible for insane quantities of cash money.

To any out there who were thinking to curse some poor innocent souls with the unfair burden of excess riches, I urge you to reconsider, take a willing victim instead!

I'm sure the world would be a better place if it had more people following your sensible philosophy.

 

[bburdge]

twocows[/url]":29senfmh]
I'm worried. This was my thing, my ONE thing. It was the one, single thing that I was fully invested in, both emotionally and intellectually. I truly believed it would change everything for the better, and I haven't thought that about anything else in my lifetime.

Woah, I am hoping this is massive exaggeration.

Let's be clear, this is a thing, an artifact, a helmet for playing games. It may be a valuable thing, it may enable new and cool methods of communication, entertaining, or working. But it's just a thing, a piece of plastic, glass, and wires. Nothing was ever promised here but a gaming peripheral.

 

[jig]

track record: facebook phone.

 

[ardent]

ThinkTwice[/url]":up5ffulk]From a NYTimes article:

"According to a person involved in the deal who was not allowed to speak publicly because he was not authorized by either company, Facebook eventually plans to redesign the Oculus hardware and rebrand it with a Facebook interface and logo."

http://www.nytimes.com/2014/03/26/techn ... .html?_r=0

Yup. Game over, man.

Oh well. People recognize it can be done now, so they'll do it.

 

[Rukh]

RocketDocRyan[/url]":2bpv31dc]Facebook's next purchase: Second Life.

Exactly, I can't be the only one that read this news and thought that just maybe this is the first step towards something like "The OASIS" as described in Ernest Cline's "Ready Player One".

 

[s73v3r]

HonorableSoul[/url]":2wbbs6qx]To me this deal smacks me like a company buying out the local water company for $2 billion more. How can you argue this is not anticonsumer? They are going to have to at least $2 billion more to make a profit.

Doesn't kickstarter have rules for the use of funds and buyouts of the techology it's money researched?

In any case would the kickstarter investors have a case?

For legal purposes, people who back kickstarters are not "investors". Otherwise you'd own part of the company.