wraggster
March 26th, 2014, 19:59
There are two key tests that determine the difference between success and failure in the games hardware business.
The obvious one is popularity; how can a platform appeal to as many consumers as possible whilst retaining its core values? The second is support; how can a product be considered the best investment opportunity for games developers?
Only when both these requirements are met does an idea have the chance to be commercially sustainable in the long term. About two years ago, the viability of the entire console business was questioned because it didn't pass the second part of that test. After all, with games thriving on mobiles and PC, and developers enjoying the total creative freedom they provide, why would any talented person want to deal with consoles again?
I've always found Oculus Rift to be a fascinating project from a business standpoint because it breaks those two rules.
http://cdn.medialib.computerandvideogames.com/screens/dir_3170/image_317055_320.jpg (http://www.computerandvideogames.com/viewer.php?id=317055&mode=article)In 2012, Oculus raised 2.4 million dollars through Kickstarter, though none of the backers have equity in the 2 billion dollar company. Image: Flickr (https://www.flickr.com/photos/sergesegal/10166365646/in/photostream/)Clearly it is far too expensive, and fundamentally too exotic, to ever stand a chance of appealing to the masses. The past two years of media impressions of this astounding hobbyist technology, though glowing in praise, have rarely even hinted it carries mass-market appeal. Oculus was never about that in the first place.
Not only that, but developers have so little financial incentive to support it. For traditional games to work in Oculus Rift, a thorough and time-consuming redesign is required, from sweeping UI changes to solving resolution problems to building assets into the blind spots of PC monitors. Combined with the tiniest target audience who stand to benefit from the additional work (Ubisoft famously said Oculus needs one million sales (http://www.computerandvideogames.com/454838/vr-a-viable-dev-platform-after-1-million-sales-ubisoft-exec-says/) to encourage support), it's simply too hard a sell for most developers.
Yet there was something special about Oculus. Despite all that went against it, the device still had a chance simply because, from the moment you first wear it yourself, the experience is unforgettable. The device is therefore carried by its own magic, as well as the unwavering commitment of the company that has painstakingly built it from the ground-up.
"MARK ZUCKERBERG AND HIS EXECUTIVE TEAM HAVE NO INTEREST WORKING IN CORE GAMES"
But all this changed on Tuesday, when Facebook announced it has agreed to buy Oculus VR (http://www.computerandvideogames.com/455652/oculus-vr-to-be-acquired-by-facebook/) in a deal potentially worth more than $2 billion.
UnfriendedLet's get to the heart of the issue: Mark Zuckerberg and his executive team have no interest working in core games, and it's hard to blame them.
After all, what sort of modern entrepreneur would be enticed by an industry that needs to sell 5 million Tomb Raider units (http://www.computerandvideogames.com/397970/tomb-raider-hitman-absolution-and-sleeping-dogs-miss-sales-targets/) in order to pull out of the red? Who would trust an industry that sells 4 million BioShock Industry copies and witnesses the developer capitulate (http://www.computerandvideogames.com/450117/bioshock-dev-irrational-games-to-close/) one year later?
More to the point, Facebook's core obsession is acquiring more users and retaining young people on its social network. Games are far from the solution, and even if they were, Zuckerberg would have acquired many other core development studios before visiting Oculus VR.
During a sudden press conference on Tuesday, Zuckerberg was keen to stress that Oculus "has big plans in immersive gaming that will not be changing" - but what was notably absent was any indication that Facebook wants to invest in the games side of Oculus once the list of current commitments (some of which are legally binding) is completed.
http://cdn.medialib.computerandvideogames.com/screens/dir_3168/image_316805_320.jpg (http://www.computerandvideogames.com/viewer.php?id=316805&mode=article)Sony wants to join the VR games race with its own prototype, Project Morpheus"After games, we'll make Oculus a platform," the Facebook chief executive vowed, and this gets to the heart of the matter.
Zuckerberg has made a $2 billion punt on Oculus because he is speculating that virtual reality is the future of computing and is willing to pay for the head-start.
Or, for that matter, he doesn't want to pay over the odds later down the line. For all of Facebook's immense success on PC, the corporation was relatively slow to take advantage of smartphones, and ended up paying $19 billion for the Whatsapp business in February. It doesn't want to make the same mistake again.
"ZUCKERBERG HAS MADE A $2 BILLION PUNT ON OCULUS BECAUSE HE IS SPECULATING THAT VIRTUAL REALITY IS THE FUTURE OF COMPUTING AND IS WILLING TO PAY FOR THE HEAD-START"
Virtual reality is "the next major computing platform that will come after mobile", the Facebook founder believes, and he considers Oculus to be a "long-term bet".
If Facebook was even concerned with the future prosperity of Oculus Rift as a games device, the company would know the best thing would be to not get involved at all. Zuckerberg's vision, as he put it on his Facebook page, has nothing to do with games:
"Imagine enjoying a court side seat at a [sports] 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."
http://www.computerandvideogames.com/455774/blog/and-just-like-that-facebook-shatters-the-dream-of-virtual-reality-gaming/
The obvious one is popularity; how can a platform appeal to as many consumers as possible whilst retaining its core values? The second is support; how can a product be considered the best investment opportunity for games developers?
Only when both these requirements are met does an idea have the chance to be commercially sustainable in the long term. About two years ago, the viability of the entire console business was questioned because it didn't pass the second part of that test. After all, with games thriving on mobiles and PC, and developers enjoying the total creative freedom they provide, why would any talented person want to deal with consoles again?
I've always found Oculus Rift to be a fascinating project from a business standpoint because it breaks those two rules.
http://cdn.medialib.computerandvideogames.com/screens/dir_3170/image_317055_320.jpg (http://www.computerandvideogames.com/viewer.php?id=317055&mode=article)In 2012, Oculus raised 2.4 million dollars through Kickstarter, though none of the backers have equity in the 2 billion dollar company. Image: Flickr (https://www.flickr.com/photos/sergesegal/10166365646/in/photostream/)Clearly it is far too expensive, and fundamentally too exotic, to ever stand a chance of appealing to the masses. The past two years of media impressions of this astounding hobbyist technology, though glowing in praise, have rarely even hinted it carries mass-market appeal. Oculus was never about that in the first place.
Not only that, but developers have so little financial incentive to support it. For traditional games to work in Oculus Rift, a thorough and time-consuming redesign is required, from sweeping UI changes to solving resolution problems to building assets into the blind spots of PC monitors. Combined with the tiniest target audience who stand to benefit from the additional work (Ubisoft famously said Oculus needs one million sales (http://www.computerandvideogames.com/454838/vr-a-viable-dev-platform-after-1-million-sales-ubisoft-exec-says/) to encourage support), it's simply too hard a sell for most developers.
Yet there was something special about Oculus. Despite all that went against it, the device still had a chance simply because, from the moment you first wear it yourself, the experience is unforgettable. The device is therefore carried by its own magic, as well as the unwavering commitment of the company that has painstakingly built it from the ground-up.
"MARK ZUCKERBERG AND HIS EXECUTIVE TEAM HAVE NO INTEREST WORKING IN CORE GAMES"
But all this changed on Tuesday, when Facebook announced it has agreed to buy Oculus VR (http://www.computerandvideogames.com/455652/oculus-vr-to-be-acquired-by-facebook/) in a deal potentially worth more than $2 billion.
UnfriendedLet's get to the heart of the issue: Mark Zuckerberg and his executive team have no interest working in core games, and it's hard to blame them.
After all, what sort of modern entrepreneur would be enticed by an industry that needs to sell 5 million Tomb Raider units (http://www.computerandvideogames.com/397970/tomb-raider-hitman-absolution-and-sleeping-dogs-miss-sales-targets/) in order to pull out of the red? Who would trust an industry that sells 4 million BioShock Industry copies and witnesses the developer capitulate (http://www.computerandvideogames.com/450117/bioshock-dev-irrational-games-to-close/) one year later?
More to the point, Facebook's core obsession is acquiring more users and retaining young people on its social network. Games are far from the solution, and even if they were, Zuckerberg would have acquired many other core development studios before visiting Oculus VR.
During a sudden press conference on Tuesday, Zuckerberg was keen to stress that Oculus "has big plans in immersive gaming that will not be changing" - but what was notably absent was any indication that Facebook wants to invest in the games side of Oculus once the list of current commitments (some of which are legally binding) is completed.
http://cdn.medialib.computerandvideogames.com/screens/dir_3168/image_316805_320.jpg (http://www.computerandvideogames.com/viewer.php?id=316805&mode=article)Sony wants to join the VR games race with its own prototype, Project Morpheus"After games, we'll make Oculus a platform," the Facebook chief executive vowed, and this gets to the heart of the matter.
Zuckerberg has made a $2 billion punt on Oculus because he is speculating that virtual reality is the future of computing and is willing to pay for the head-start.
Or, for that matter, he doesn't want to pay over the odds later down the line. For all of Facebook's immense success on PC, the corporation was relatively slow to take advantage of smartphones, and ended up paying $19 billion for the Whatsapp business in February. It doesn't want to make the same mistake again.
"ZUCKERBERG HAS MADE A $2 BILLION PUNT ON OCULUS BECAUSE HE IS SPECULATING THAT VIRTUAL REALITY IS THE FUTURE OF COMPUTING AND IS WILLING TO PAY FOR THE HEAD-START"
Virtual reality is "the next major computing platform that will come after mobile", the Facebook founder believes, and he considers Oculus to be a "long-term bet".
If Facebook was even concerned with the future prosperity of Oculus Rift as a games device, the company would know the best thing would be to not get involved at all. Zuckerberg's vision, as he put it on his Facebook page, has nothing to do with games:
"Imagine enjoying a court side seat at a [sports] 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."
http://www.computerandvideogames.com/455774/blog/and-just-like-that-facebook-shatters-the-dream-of-virtual-reality-gaming/