Why the $2B Facebook Oculus deal is a down payment on gaming and everything beyond

Relax, gamers. Not only will Oculus still be able to fulfill its ambitions, but the Facebook acquisition will also prove a landmark moment for the impending ubiquity of virtual reality.

Nick Statt Former Staff Reporter / News
Nick Statt was a staff reporter for CNET News covering Microsoft, gaming, and technology you sometimes wear. He previously wrote for ReadWrite, was a news associate at the social-news app Flipboard, and his work has appeared in Popular Science and Newsweek. When not complaining about Bay Area bagel quality, he can be found spending a questionable amount of time contemplating his relationship with video games.
Nick Statt
6 min read

Josh Miller/CNET

Another day, another mind-blowing, bombshell announcement in the tech industry that could shape the future of human experience.

Facebook has agreed to acquire virtual reality trailblazer Oculus VR in a $2 billion deal announced Tuesday, and of all the acquisitions the social network has ever made, this will undoubtedly prove the most influential. Its effects will reverberate throughout the VR market and far beyond, to the edges of personal computing that we can only now conceptualize.

People do have reason to criticize the deal. Oculus was an open-source darling, a Kickstarter-funded startup, and a game luminary magnet that could seemingly do no wrong. And any move from a behemoth corporation -- let alone the seemingly privacy-averse social network overlord -- is going to be met with harsh backlash. Minecraft creator Markus "Notch" Persson has been one of the most vocal.

"I did not chip in 10 grand to seed a first investment round to build value for a Facebook acquisition," Persson wrote on his personal blog in a post titled "Virtual reality is going to change the world" soon after announcing, on word of the deal, that he had nixed a Minecraft VR port for Oculus. The Kickstarter debacle -- in which Oculus received $2.4 million in what were essentially donations for what would become a nearly 100,000 percent valuation jump -- is a totally different story worth exploring on in its right.

But this isn't just about Facebook and Oculus, the same as it's not just about gaming. Facebook made a long-shot bet, as my colleague Jennifer Van Grove explains, on what is essentially a science fiction-inspired future in which virtual experiences could aspire to be as real to us -- experienced as smoothly through sensory projection -- as the physical world.

This acquisition, while great for Facebook if Oculus remains the preeminent player in VR -- is more important for the applications of the technology in the mainstream. Virtual reality was going to happen regardless. Now, the tech is going to become more powerful, the market more diverse, and the acceleration of the entire space faster than ever before.

"We're a rocket," Brendan Iribe, Oculus co-founder and CEO, told The Verge, "and we just attached ourselves to an even bigger rocket to get it out there and deliver a better virtual reality experience to the world."

Facebook and Oculus: A lesson in symbiosis

The oft-repeated talking point in the wake of a landmark acquisition typically manifests itself in the form of "What X will get from X." In this case, it's abundantly clear that both Facebook and Oculus will benefit enormously from each other.

Oculus gets a juggernaut in the tech industry whose aims, though more intangible, are as lofty as Google's: Connect everyone, understand the world, build the knowledge economy, as Facebook CEO Mark Zuckerberg is happy to robotically recite.

Oculus is happily drinking the Kool-Aid. "Facebook understands the potential for VR. Mark and his team share our vision for virtual reality's potential to transform the way we learn, share, play, and communicate," reads Oculus' official statement, signed off on by creator and co-founder Palmer Luckey, Iribe, and industry legend John Carmack, the creator of Doom who joined the team last year. "This partnership is one of the most important moments for virtual reality: it gives us the best shot at truly changing the world."

On the other end, Facebook is doing its best to stem the flood of negativity and reassure us that Oculus will still be Oculus for the time being, with a focus on gaming because "it's the furthest along," meaning the most commercially viable.

"We're clearly not a hardware company. We're not going to make a profit off the devices. Long-term we see this as a software and services thing," Zuckerberg said on a conference call after the announcement. Take that at face value of course, but there's no foreseeable reason Facebook would tamper with the company's original road map. Making VR cheaper and easier, and giving its most promising poster child a resource arsenal, only helps Facebook in the future.

Because what Facebook gets out of the acquisition equation, the flip side of the relationship, is a chance to put one of the earliest, and biggest, marks on a market that will transform industries five and 10 years down the line. "Today's acquisition is a long-term bet on the future of computing," Zuckerberg said.

VR is bigger than gaming

"The Machine to Be Another," an experiment form BeAnotherLab, lets people see through someone else's eyes. BeAnotherLab

At its heart, Oculus is committed to being a games platform first and foremost, and games is exactly where we'll first see VR come to mainstream, commercial fruition. We're seeing it already, with the dogfighting space title Eve Valkyrie developed from the ground up for virtual reality and Sony going to great lengths to bring motion control into the mix from the get-go.

But that doesn't mean the social giant doesn't have its sights set on expanding the VR scope with Oculus down the line.

"After games, we're going to make Oculus a platform for many other experiences," Zuckerberg said on the call. "Imagine enjoying a court-side seat at a game, studying in a classroom of students and teachers all over the world, consulting with a doctor face-to-face, or going shopping in a virtual store where you can touch and explore the products you're interested in just by putting on goggles in your own home."

That seems ridiculous to those who haven't had a modern, immersive VR experience. But as cheesy as it sounds, the 17th century idiom -- "seeing is believing" -- applies here. The applications for virtual reality are endless.

Not just virtual stores and better telepresence, virtual classroom experiences or video chatting, but all-new experiences that elevate video games to the industry's most sought-after dream. For instance, experiencing the opposite gender in real-time, or exploring a breathing, interactive simulation of Mars? Those are being built out, developed, and experimented with right now.

What's next is literally a process of parsing the imagination. Will there be annoying, intrusive advertising, regulatory intervention, and privacy obstacles? Yes, of course. There will be everything we deal with and hate and ignore about personal computing now, in browsers, property, locked-down game ecosystems, and on mobile apps and smartphone operating systems.

But there will also be the VR equivalents of what we love about all of those platforms and technologies, experiences that change the nature of play and sensory experience.

More, not less, opportunity for VR to grow

Here's the bottom line: Anyone could have bought Oculus and, as many have pointed out in the frothy outpouring of online reaction, it was only a matter of time before someone did.

That it was Facebook may prove to be ultimately inconsequential, or it could prove to have been a disastrous move that sets Oculus too far back to stay upfront. However, the lasting takeaway is that someone paid $2 billion -- for a company without a final product and that was crowdfunded into existence less than two years ago. That forms the crux of this confounding moment, a time both for necessary trepidation regarding Oculus' future, but also for celebrating VR at large.

There is now a vacuum in the market, a space waiting to be filled with the next up-and-coming independent VR startup. Furthermore, the deal is validation -- reassurance that VR is not just valuable, but a potentially ubiquitous platform for media and computing -- and will only spur more activity. Companies big and small, from Google and Microsoft to the most bootstrapped, crowdfund-hungry startups, can now look at VR not as a fringe, gaming fascination, but as something that's as promising as the smartphone once was and wearable tech is now.

While Facebook sounds committed to bringing VR to gaming and beyond and to letting Oculus do that at its leisure, both companies will have to put considerable time and effort toward convincing people -- cynical and corporate-wary gamers primarily -- that they won't mess this up.

"This is a special moment for the gaming industry -- Oculus' somewhat unpredictable future just became crystal clear: virtual reality is coming, and it's going to change the way we play games forever," Luckey wrote an already controversial Reddit post with a boiling pot of replies. "Very little changes day-to-day at Oculus, although we'll have substantially more resources to build the right team."

However this acquisition affects your faith in Oculus is more important to the Rift than it is to virtual reality. The technology is here and Luckey and crew simply proved it finally works. That means the market will evolve around it, regardless of whether or not Oculus ruined its chances to deliver it first.

"We won't let you down," Luckey pleaded in closure to his Reddit post. Believe it or write him off as you will. VR just hit its definitive turning point.

Because if Oculus doesn't stay true to its word -- if Luckey lets us down -- then the market can afford to move on and raise up another big dreamer. From here on out, consumers won't have to rely on Kickstarting a long shot, but will be able to choose.