Oculus’s Newfound Gaming Pedigree, Facebook Allowing for Affordable Rift

The news that Facebook would drop $2 billion to buy Oculus, the Kickstarted makers of the as-yet in-development Rift VR headset, got lots of people upset. After all, backers put in their own money because they believed in Oculus and wanted to see it succeed on the strength of their pledges – why should they trust a company that turned around and took money from the Facebook behemoth? The answer, it seems, comes down to deep pockets equaling affordable virtual reality.

According to an interview on Ars Technica, Facebook CEO Mark Zuckerberg is making sure that his new acquisition will have enough funding behind it to make sure that the company’s first Rift headset will be something fans can actually buy without breaking the bank. Said Oculus CEO Brandan Iribe:

“I think [the Facebook buyout] is going to allow us to deliver consumer V1 at a lower cost, because we’re not trying to drive a high margin on this. Mark, especially, wants to bring the cost down, him more than me. I do, too, but at the same time we were planning to run a business, hopefully a break-even [or] profitable business off of this, not a money-losing business. Mark is much more in the mindset of ‘Let’s get this to scale with the best quality product at the lowest cost possible.

“I’m hopeful we’re not going to be losing money on [the hardware], but I think everybody agrees that if we can do it at cost that would be great for everybody. As Mark says, as you start to get to race to scale there are a lot of opportunities to monetize that are really great for consumers, because they get a really low-cost product.”

It’s an old story: hardware makers sell video game consoles at a loss, and make up the difference in game and peripheral sales, subscriptions, and longterm customer relationships. Now that Facebook holds the purse strings for Oculus, the company that once would hope to break even – and sell the Rift headset at a higher price – can now afford to sell the thing at a lower price. They’re still aiming to sell it at cost, but don’t be surprised if the final MSRP comes in somewhat lower.

Meanwhile, there’s every indication that Oculus is looking to run their business as much like a game company as possible. Former id Software employee (and Doom creator) John Carmack joined the company last year, but last week Oculus announced the hiring of former Valve bigwig Jason Holtman, the company’s new Head of Platform. And just yesterday, Oculus announced the hire of Jason Rubin (no relation) to take the position of Head of Worldwide Studios. Rubin was a co-founder of Naughty Dog, and was the last man to turn out the lights at THQ before that company was claimed by bankruptcy.

With Rubin and Holtman on board and Facebook’s bank account to provide a financial foundation, Oculus has the potential to be a major player in the world of video games, an industry typically dominated by huge, entrenched firms. This is the kind of potential that Oculus never would have enjoyed before the Facebook acquisition. While Facebook is far from my favorite company, there’s no question it might make my favorite new game platform in the next few years.

[Source: Ars Technica]