Oculus Deal Panned by Gamers Lamenting Facebook Takeover

Oculus VR Inc. co-founder Palmer Luckey called Facebook Inc. (FB)’s $2 billion purchase of his virtual-reality headset company a move that will help transform industries. Some fans weren’t so upbeat.

Across Twitter, video-game websites and Oculus’s own blog, players and developers panned the company’s decision to sell for least $400 million in cash and 23.1 million shares of Facebook. One was an investor in the company’s Kickstarter fundraising campaign and said he was betrayed.

Facebook Chief Executive Officer Mark Zuckerberg and Luckey said yesterday that joining forces will push virtual reality into the mainstream. The feedback suggests they’ll have to convince game developers that Oculus will still be a great place for their titles after the deal is done, particularly among those counting on working with a smaller, startup-stage company.

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“Good job pulling one over on us Oculus,” wrote Caleb Benningfield, who identified himself as a software developer at the health-care company IMS Health/Appature, in comments on the Oculus blog where the deal was announced.

Swedish game programmer Markus Persson, who created the popular block-building and busting title “Minecraft” for personal computers and mobile devices, voiced his displeasure in a post on his Twitter feed.

Photographer: Ana Venegas/The Orange County Register/Zuma Press

Oculus VR founder Palmer Luckey, right, in Irvine, California. Close

Oculus VR founder Palmer Luckey, right, in Irvine, California.

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Photographer: Ana Venegas/The Orange County Register/Zuma Press

Oculus VR founder Palmer Luckey, right, in Irvine, California.

Canceled Deal

“We were in talks about maybe bringing a version of Minecraft to Oculus,” Persson said. “I just canceled that deal. Facebook creeps me out.”

A spokeswoman for Facebook, based in Menlo Park, California, didn’t return a call seeking comment.

Luckey sought to reassure Oculus’s fans in a series of posts on social networking site Reddit. The startup will work independently of Facebook, have cash to bring down the cost of making the hardware and “make huge investments in content,” he said.

“I won’t change, and any change at Oculus will be for the better,” he said. “A lot of people are upset, and I get that. If you feel the same way a year from now, I would be very surprised.”

Mobile Computing Escapes the Phone

Oculus, based in Irvine, California, unveiled its first headset in June 2012. The stridency of some comments may be tied to the $2.44 million the company raised from gamers and virtual-reality enthusiasts on the crowd-funding site Kickstarter in August of that year. In all, the company has attracted more than $91 million.

‘Ten Grand’

“I did not chip in ten grand to see a first investment round to build value for a Facebook acquisition,” said Persson, who calls himself “Notch,” in a later posting. “I definitely want to be part of VR, but I will not work with Facebook.”

The company recently began selling an updated version of the Oculus Rift headset to developers for $350 and demonstrated the technology last week at the Game Developers Conference.

After years of discussion about the merits of virtual reality, the topic has moved to the fore with the development of small, inexpensive sensors that track a user’s movements.

The gear also has enough processing power to place a viewer or player in a virtual situation with little of the lag that has caused widespread nausea in earlier attempts.

Oculus “just seemed like an escape from monster corporation crap and Facebook ‘likes’ and ‘Candy Crushes,’” Jared Cate, a software engineer who works for San Francisco-based game developer TinyCo, said in an interview.

Virtual Reality

The negative commentary, if it turns into something more, could help Sony Corp. (6758) in its efforts to develop a virtual-reality headset for the PlayStation 4 console. The Tokyo-based company last week began demonstrating games for its Project Morpheus gear.

Sony declined to comment on the Oculus acquisition, according to a spokeswoman.

Video-game industry stalwarts could change their minds if the deal advances virtual-reality technology, according to Bertrand Schmitt, CEO of game-industry tracking company App Annie Ltd.

“Gaming technology pushed the boundaries of where things are going, and a game-focused company like Oculus represents a stepping stone towards a broader application of virtual reality,” Schmitt said by e-mail.

To contact the reporter on this story: Cliff Edwards in San Francisco at cedwards28@bloomberg.net

To contact the editors responsible for this story: Rob Golum at rgolum@bloomberg.net Ben Livesey, John Lear

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