When Facebook bought Oculus did it make the VR firm less relevant?

Virtual reality company Oculus was going to revolutionize VR for gaming back in 2014. The Oculus Rift headset was for gamers by gamers, end of story. But then Facebook bought the company for about $2 billion because it had a much bigger vision for virtual reality as the future of engagement. People hanging out in VR like they did on the news feed, having a good time and watching ads for hours.

In 2019, that vision is still just a vision, and in fact, the Oculus true believers never forgave the company. Host Molly Wood spoke with Blake Harris, the author of “History of the Future: Oculus, Facebook, and the Revolution that Swept Virtual Reality.” We first ran this interview in March 2019. The following is an edited transcript of their conversation.

“What was so special, so significant about Oculus, was this idea of being beloved.”

Blake Harris

Blake Harris: What was so special, so significant about Oculus, was this idea of being beloved. And it was this idea of having such a strong connection with their user base and with their community.

Wood: That is a big part of the book: the backlash when Oculus was sold to Facebook and people felt really betrayed. You talk about Palmer Luckey [founder of Oculus VR] getting death threats. Do you think that in addition to not ever really maturing gaming on the platform, that that loss of the fan community did prove to be more significant than people realized?

Harris: You’re right. You also must remember that this was a Kickstarter company. This was a crowdfunded company. It almost was like watching a reality TV show because every few days they put out an update. They had such a great relationship with their customer base and maybe, like a reality show, maybe that wasn’t fully authentic behind the scenes, but you felt like you were a part of it.

After the acquisition that just stopped. I think that I was a little skeptical, or I thought that the backlash was a little bit of an overreaction. But at the same time, I had someone at a book signing ask me last week about Oculus’s new headset coming out this spring, the Oculus Quest. And they said, “It seems like an incredibly affordable, great technological headset.” And I said, “Yep.” And they said, “But should I buy it? Because I don’t trust Facebook.” And I really have no good answer because I want you to buy it because then it’ll help make VR more popular. But I totally have those concerns and I wouldn’t blame someone for not purchasing the headset because of that.

Wood: I assume then that you view this book as a cautionary tale for other startups?

“…be aware, of the bargain that’s being made when you sell your company … you are going to lose control and that is what the money is for.”

Blake Harris

Harris: Around the time of the acquisition of Oculus, Facebook had also recently acquired Instagram, and a month prior acquired WhatsApp. And their big pitch to Oculus was, “Look how much autonomy we’ve given these two companies.” And it’s significant to me that last year, or the year before, that the founders of WhatsApp, Instagram and Oculus almost all of them were gone. The opening quote of the book is that quote from Mad Men where Peggy Olson says, “You never say thank you,” and Don Draper says, “That’s what the money is for.” And for founders to be aware, or entrepreneurs to be aware, of the bargain that’s being made when you sell your company that no matter what you’re told, you are going to lose control and that is what the money is for. So, make sure it’s enough money to make you happy.

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Marketplace Tech for Monday, March 28, 2016