Oculus happy as a break-even business
Virtual reality headset maker says it's planning to sell its products at the lowest possible price, despite investment costs that could reach into the billions.
LOS ANGELES -- When virtual reality headsets eventually hit the retail market, Brendan Iribe wants to sell them for as little as possible.
The CEO of Oculus VR, the virtual reality company Facebook purchased earlier this year for $2 billion, said he's focusing his business on growing research and development and ensuring compelling content will be available when the "Rift" headset eventually lands on store shelves.
In an interview during the Electronic Entertainment Expo here, Iribe said his team is putting together a research and development group in Seattle, given a nearly unlimited budget and ability to hire whomever they need, to help push virtual reality technology forward.
"VR is so new," he said. "This is what you have to do."
The company is doing something similar in Menlo Park, home to Facebook, where he is building a team to help manage game developers and others as products begin being made for the platform. Iribe said Oculus has also begun to put together studios to create its own gaming content.
Oculus's deal with Facebook hasn't yet closed -- that should happen in a few weeks, Iribe says -- but the virtual reality headset maker is already making good on the social networking behemoth's promise to pony up the capital necessary to both bring headsets to the market and support its long-term success.
After the acquisition was announced in March, Iribe said Facebook's resources would allow Oculus to create headsets using custom-made parts for its headsets, as opposed to relying on screens intended for smartphones, for example. Oculus would also be able to sell the devices closer to a break-even price, more likely attracting consumers.
"We're motivated to optimize for scale over margin," Iribe said. "If it means we get to run a successful break-even business, that's great."
Iribe's comments echo those of Brian Acton, co-founder of the messaging program WhatsApp, purchased by Facebook for $19 billion. In a panel discussion earlier this month, Acton said he too is happy running his business near break-even. He added that his company had been tasked by Facebook CEO Mark Zuckerberg and COO Sheryl Sandberg to increase engagement and sign up new users, rather than pull in profits.
"Mark and Sheryl have said focus on growth and engagement and leave the rest to us," Acton said at the time. "That's music to our ears."
"When we sat around the table and said if we were going to do this right, and it was going to take hundreds of millions of dollars in investment -- potentially billions of dollars in investment -- to develop the best VR platform and product, who would we want to partner with?" he said. "Facebook was at the top of the list.
Another piece of the puzzle is computers that will power the goggles. Iribe said the first consumer versions of his products will likely need more powerful computers, and his company is investigating a possible certification program or other ways to ensure customers know what type of computer they need.
Computers will also likely only be able to power a single set of goggles at a time, he said. "We're pushing the computer pretty hard."