What The Heck Is Oculus Rift? A Guide To Facebook's $2 Billion Deal

Yesterday, Facebook bought a virtual reality company called Oculus VR. Shortly afterward, the internet exploded.

If you've been closely following Oculus and their Oculus Rift VR headset over the past couple of years, you probably already have a ton of thoughts and opinions on all this. But what if you haven't really been paying attention? What's the deal, why is everyone so worked up? Didn't virtual reality already happen in the 90s?

Don't worry, we're here to help. Below is our explanation of what's going on, and why Facebook just paid a cool couple billion for a company that makes a virtual reality headset.

So, what happened?

Yesterday, Oculus VR announced that it was being acquired by Facebook for $2 billion. The deal isn't fully closed yet, but it will be soon, and then Facebook will own themselves a virtual reality company.

What's an Oculus?

Oculus VR is a company that started a few years ago with a 2012 Kickstarter campaign and promise: They were finally going to give us virtual reality like we'd been promised back in the 90s. The company was founded by a tech wunderkind named Palmer Luckey who decided he wanted to play games in VR, tried every VR headset he could find, and wasn't satisfied, so he decided to make one of his own.

Early buzz was extremely strong, and the Kickstarter for their first prototype exceeded its goal by a factor of almost ten—they asked for $250,000 and got nearly $2.5 million.

So that's Oculus the company. What's the Oculus Rift?

The Oculus Rift is the name of Oculus' virtual reality headset. It's the product they'll eventually release to the public. It's a little confusing. Basically, "Oculus" is the company and "Oculus Rift" is the actual product.

Kind of a silly name, right?

I don't know, I actually kind of like it! It's a bit overly dramatic, but then again, this is VR we're talking about. As nerdy names go, it's pretty high-grade.

What is virtual reality, really? What's it like?

Basically, virtual reality lets you put on a headset and look around inside of a virtual world, like you'd find in a video game. The headset has two eyepieces and two separate images, which work together to let you focus your eyes and see a single image. When you move your head around, your "head" in the computer game also moves around, and you can look above, below, and even behind yourself. It puts you in the middle of a 3D world and lets you explore it and move around in an intuitive, natural way. It's a trip.

Why do people get excited about this?

Because it's really cool. It's one of those things that you can't quite "get" until you use it, but the moment you do, it's immediate. I was a doubter as well, until I tried the latest model last week. The effect is right there in a way that few things in tech are. You put it on, and it just makes sense.

Suddenly you're sitting in a room that doesn't actually exist, turning your head around, looking behind you. You immediately start to think of the amazing stuff they could do with this thing—virtual tourism, sitting onstage during a concert, being inside of a movie… and your imagination is off to the races.

For now, I guess I'll have to take your word for it.

Yeah, that's kind of the bummer of VR. It's really hard to report on or describe; it's hard to show it to people without actually, well, showing it to people. But you can read about, say, this Game of Thrones experience that lets you climb The Wall, or the way that the Navy is using the headsets for training, and get a sense of just how much potential the technology has.

Don't people already have Oculus Rifts? I feel like I've seen photos and YouTube videos of people using them.

One of the Kickstarter rewards was that you'd be sent the first mass-produced prototype of the Oculus Rift. Those were sent out in 2013. So, that's what you've seen people using.

The "DevKit 1" prototype is the one that everyone has; it's pretty far from the final specs that Oculus is aiming for, but it's still powerful enough to do some cool stuff. It's the one with the flat rectangular face, it looks like this:

What The Heck Is Oculus Rift? A Guide To Facebook's $2 Billion Deal

Didn't I just hear about a new Oculus Rift? Is that the final one?

There is a new Oculus Rift, but it's still not the final model. At the Consumer Electronics Show this year in Vegas, Oculus finally brought out a new prototype model with a bunch of enhanced features like a higher resolution screen and head-tracking, which lets you lean closer and farther away from things in the VR simulation. That's still not final, though - it's called the DevKit 2. They demoed that headset last week at the Game Developers Conference in San Francisco; I tried one out and thought it was really cool.

The DevKit 2 looks like this:

What The Heck Is Oculus Rift? A Guide To Facebook's $2 Billion Deal

Those headsets look pretty dorky. Just saying.

Yeah, it's hard to be cool when you're wearing a VR headset. C'est la vie.

So, how does the Oculus Rift work? Can I buy one right now and play VR games?

Yes, though the headset isn't a consumer model, so the experience is kinda rough. If you want, you can preorder one of the new prototypes from the Oculus site and have one by July. The Rift works with a PC, and you'll need a decently powerful gaming PC to use it.

What about the games?

There aren't that many official games for the Oculus Rift yet, though some indie developers are making them. However, lots of people have hacked popular existing games like Team Fortress 2, Crysis and Portal 2 to work with the Rift headset. You can download their hacks for your own copy of the game, but you'll need to be comfortable noodling around with your files in order to get everything working. In other words, the Rift is still mostly for game developers who want to make games for it and hardcore enthusiasts who are dedicated enough to put in the time to get it working.

Got it. So, Facebook bought this company?

Yeah. For $2 billion.

That's a lot of money, even for Facebook, right?

It's a lot, but it's not as much as Facebook has paid for other things. To put it in perspective, Facebook bought the successful photo-sharing service Instagram for $1 billion back in 2012. But last month they bought the popular messaging app WhatsApp for a total of $19 billion, and reportedly offered Snapchat $3 billion, which the company turned down. Still, any way you slice it, $2 billion is a lot of money.

Why did Facebook buy a Virtual Reality company?

It's a bit curious. In the past, Facebook's acquisitions have made immediate logical sense. Instagram helped bolster Facebook's already-massive photo service. WhatsApp helps boost their messaging service. Snapchat, had that worked out, would have given Facebook access to a huge, young userbase, many of whom specifically use a service like Snapchat—which doesn't visibly store shared images once you've viewed them—as a less burdensome alternative to Facebook. Those were all software companies, but Oculus is a hardware company, which is a big part of why this whole thing is curious.

Okay so, uh… why did Facebook buy a virtual reality company again?

From the look of things, a big part of it is simply that Facebook head Mark Zuckerberg seems to genuinely think VR is really cool. Which actually isn't such a bad reason! In a statement explaining the move, Zuckerberg said that immersive gaming would still be Oculus' first mission, but after that, well...

After games, we're going to make Oculus a platform for many other experiences. Imagine enjoying a court side seat at a game, studying in a classroom of students and teachers all over the world or consulting with a doctor face-to-face — just by putting on goggles in your home.

This is really a new communication platform. By feeling truly present, you can share unbounded spaces and experiences with the people in your life. Imagine sharing not just moments with your friends online, but entire experiences and adventures.

These are just some of the potential uses. By working with developers and partners across the industry, together we can build many more. One day, we believe this kind of immersive, augmented reality will become a part of daily life for billions of people.

That sounds cool, and kind of vague.

Yeah, it is both of those things. If I had to guess, I'd say Zuckerberg is playing a really long game here, and sees Oculus not just as a company that wants to make a big plastic headset, but as a company that sees VR as a stepping stone to a more seamless, integrated augmented reality experience. And he wants to get in on the ground floor.

So what does this mean for Oculus?

Well, the deal happened yesterday, so it's not really clear yet. Zuckerberg said that they don't plan on interfering with any of Oculus' plans, and that the company will still operate independently. So, the best-case scenario here is that Facebook's massive financial support makes it possible for Oculus to quickly grow and make a better product, faster.

Well, that sounds good!

It's a best-case scenario, but yeah, that'd be pretty cool. There are shades to it, though. This article by Brian Barrett of our sister site Gizmodo provides a pretty even-handed look at the various sides of the situation.

Everyone seems pissed, though. Why is everyone pissed?

Well, it's the internet, so that's part of it. And it's Facebook, so that's another part. Everyone on the internet is kinda pissed to begin with, and lots of people hate Facebook! But of course, there's also more to it.

For starters, there's the fact that Oculus came on the scene as this fresh-faced, out-of-nowhere startup with a brilliant idea. People literally bought into the idea on Kickstarter, gave money to support it, and feel personally invested in the company's progress. And now out of nowhere, Facebook, one of the biggest tech companies in the world, just swoops in and buys the entire kit and kaboodle. People aren't thrilled about that, and a lot of folks are understandably worried that Facebook will impose their will on the company, subvert the original mission, ignore video games in favor of other pursuits, and generally ruin the dream.

What about Kickstarter backers? Didn't they get a say in this?

Not really, and some of them are pretty upset. This is kind of a new thing for a company, to start with a Kickstarter campaign and later be bought out by a company like Facebook or Google. But it's already pretty clear that a lot of people aren't comfortable with the idea of paying a company seed money so that its founders can get rich off of a corporate acquisition shortly afterward.

Wasn't the Kickstarter really just to let people pre-order prototype headsets?

It kinda was, at least if you paid the $300 that it took to guarantee yourself a headset. But plenty of people paid more than that, and whatever the legalities of the situation are, those people probably feel like they had some kind of stake in the company. Think of it this way: If you gave a friend $5,000 to help them start a new business, then a couple years later they sold that business for a couple billion dollars without really consulting you, wouldn't you feel a bit stung?

Yeah, I guess I would. What about game developers? How do they feel?

A lot of people have been working on Oculus games, and I'm sure a lot of those people don't mind and will continue to work on their games. Some indies are probably psyched at the possibilities that Facebook brings to the table.

Some other indie developers, however, have already voiced disapproval of the move. The loudest of these voices probably came from Minecraft creator Notch, who said that he's canceling a deal that would officially bring his super-popular game to the Oculus Rift. He says he's specifically canceling the deal because he doesn't want to be involved with Facebook. He's also bummed about the whole Kickstarter thing. Quote: "I did not chip in ten grand to seed a first investment round to build value for a Facebook acquisition."

What are the Oculus people saying about all this?

So far, they're adamant that the new deal won't have any negative affects. Oculus founder Palmer Luckey has been on Reddit defending the move against detractors. A lot of what he's saying sounds good, though plenty of people are still upset. According to Luckey:

  • Oculus will continue to focus on gaming, though there will continue to be other applications for VR beyond that.
  • You will not need a Facebook account to use or develop for the Rift.
  • Ads won't be included in Oculus hardware, and in-game ads will remain a developer decision.
  • The extra money will let Oculus make custom hardware, hire everyone they need, and make "huge investments in content." All good things, in theory.
  • There will be "no specific Facebook tech tie-ins."

Luckey also said that they chose to sell to Facebook and not to a hardware company like Apple or Microsoft because he doesn't believe Facebook has any interest in strip-mining the company and taking the tech for themselves. "Why would we want to sell to someone like MS or Apple?" he asked. "So they can tear the company apart and use the pieces to build out their own vision of virtual reality, one that fits whatever current strategy they have? Not a chance."

All reassuring stuff, though plenty of unanswered questions remain.

So, what does this all mean for me?

Well, it could mean very little. In the end it could be a good thing—it could mean that the VR revolution will come sooner and be better out of the gate. But also, for all of Zuckerberg's and Luckey's reassurances, it still could mean that Facebook will strip Oculus VR of all of their talent, gut the company, screw up their direction and let their dream of amazing virtual reality die on the vine.

That's a little intensely negative, don't you think?

Hey, it's just a worst-case scenario.

Well, it's depressing! What happens if they do that?

It'll be okay. Oculus has planted the VR seed, and we've seen enough competitors cropping up over the last year that no matter what happens to Oculus, someone will still make a cool, working VR headset that'll get lots of cool video games.

Oh yeah, I'd heard Sony is making a headset too, right?

Yeah, just last week Sony announced a VR headset program for the PlayStation 4 called Project Morpheus. It's like Oculus in that it's not finished yet, but last week Stephen Totilo and I tried out their prototype and liked it a lot. It's a bit different from the Oculus Rift DevKit 2, but generally comparable, which was surprising.

It looks like this:

What The Heck Is Oculus Rift? A Guide To Facebook's $2 Billion Deal

Still looks pretty dorky.

Yeah, I know. It's a thing. There are other prototypes out there as well, like the CastAR and Avegant Glyph, neither of which we've tried but both of which look cool.

So no matter what happens here, it kinda sounds like VR is going to get bigger and bigger over the next few years.

Yeah. Though it'd certainly be nice if Oculus could retain their place at the front of the pack. After all, they're the ones with the vision, the ones who started this whole thing.

Well, this was helpful. I think I get what's going on now. Thanks!

My pleasure.

Last question: Is it possible that this is all VR already, and that we're living inside a computer?

Could be. But ask yourself: Would you really care if it was?

Probably not.

Yeah, me neither.

What The Heck Is Oculus Rift? A Guide To Facebook's $2 Billion Deal