Oculus Blog

Carmack had this to say earlier, in a 3-part Tweet:

"Everyone has had some time to digest the FB deal now. I think it is going to be positive, but clearly many disagree. Much of the ranting has been emotional or tribal, but I am interested in reading coherent viewpoints about objective outcomes. What are the hazards? What should be done to guard against them? What are the tests for failure? Blog and I'll read."

Also, this:

"I would expect Facebook to not exert any overt control over Oculus unless Oculus fumbles badly a few times, at which point they SHOULD."

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My personal take: At the end of the day, it takes more than vision and hard work to drive a dream into existence... it takes investment. It takes capital. This is what the deal brings to the table.

Not only that, as you probably know by now, Michael Abrash has joined the team. I mean, read Michael's blog and note all of the technical challenges and issues with implementing VR. Read Carmack's technical writings on latency issues. There are a lot of problems to solve, on top of building and delivering a solid, commercial-quality hardware and software experience. For example, there is tracking head position and orientation, rendering without shearing and judder, latency issues, etc... everything must be perfect in order to deliver the perfect experience.

Facebook brings the needed investment, plus the scaling infrastructure experience to the table. John has said, "I have a deep respect for the technical scale…

Facebook missed mobile. This was a concern pre- and immediately post-IPO. It took an engineering overhaul and tens of billions of dollars in acquisitions to bridge the gap.

The Occulus VR acquisition looks like Facebook hedging its bets with the future of consumer computing UX. Better $2 billion and, say, $200 million a year for ten years today than $19 billion tomorrow. Or so it seems he is thinking.

Still, I like to check the math. Occulus VR says it has sold 75 000 "development kits" [1]. It has been 1 year and 7 months since August 2012 [2], when Occulus VR began selling its development kits. Let's assume a 200% YoY 2013 growth rate - that means 56 000 kits were sold in 2013. Let's say these keep selling at the $350 the Developer Kit 2 goes for [3]. That's $20 million in 2013 revenues. Let's turn that into $2 million of profits - a 10% margin.

Let's value Occulus VR as if it were a growing perpetuity. If Facebook had a cost of capital of {10%, 20%, 30%}, Occulus VR free cash flow (FCF) would have to grow at least {10%, 20%, 30%} a year. Otherwise, its $2 billion price tag would not make sense.

Companies are not immortal. Let's value Occulus VR as a 20-year growing annuity. Setting Facebook's cost of capital at {10%, 20%, 30%}, Occulus VR's FCF would have to grow at least {45%, 58%, 71%} a year.

Not a bad deal.

[1] http://www.oculusvr.com/blog/oculus-joins-facebook/

[2] http://en.wikipedia.org/wiki/Oculus_Rift#History

[3] https://www.oculusvr.com/order/

I'm not sure this is really all that big of a deal. Mostly because I don't really see hard evidence from the oculus guys that they have solved the two main problems with VR headsets. Resolution and latency. Sure, they talk about it a lot. http://www.oculusvr.com/blog/the-latent-power-of-prediction/ but the resolution is still low, and the frame rate numbers don't appear any better than what I remember from my days at the university in the 1990's playing around with high end SGI's driving simulation systems.

Back then people talked about those problems too, even with systems getting 60FPS @ 640x480. I was a test subject for a number of studies being conducted and overwhelmingly it was an unpleasant experience. It was impossible to suspend disbelief because even tiny (I don't have the figures handy) frame lags, especially during rapid head movements were extremely noticeable, and gag inducing.

Mostly, I think people shelved the systems because the technology wasn't ready, the estimates back then IIRC was it would take a 4x resolution and 4x frame rate bump before it was worthwhile.

Both are probably possible, but the latency numbers are harder than it seems because of the fact that framerate != frame latency due to pipelining in the sensor and graphics systems. The resolution numbers are probably a matter of cost. LCD's providing 1080p in a couple inches are also probably significantly more expensive than the cost target needed to make these things mainstream.

And it's not just Carmack and Abrash - they also have Tom Forsynth [0] and Atman Binstock [1], two other amazing people who've been pioneers in graphics programming and VR (and AR) development! And it's very likely that Valve will soon be firing most people who worked on their VR prototype, which means that it's possible that Oculus VR picks them up as well.

It's the closest thing to a dream team for nerds: Abrash and Carmack, two of the people who completely changed an entire industry in the 90s; Luckey, the definition of a true hacker who helped revive a dying market (if there ever was one in the first place); Forsynth and Binstock, who also played a key role in many areas in the games industry; and lastly, Zuckerberg, a ruthless nerd with impossibly-deep pockets.

[0] http://home.comcast.net/~tom_forsyth/
[1] http://www.oculusvr.com/blog/welcome-atman-binstock-chief-architect/

Very interesting theory. Anybody have a link to an actual source for Carmack's interest in virtual "worlds" instead of just games? Everything I've found from searching is talking about Oculus' Palmer Luckey, not Carmack, wanting to do that, and it specifically name-checks the Metaverse. (e.g. http://spectrum.ieee.org/consumer-electronics/gaming/oculus-rift-takes-virtual-reality-mainstream). There's a lot of Google hits for "Carmack Metaverse" but they're pretty much all “I am thrilled to work with John on building the Metaverse", which is Luckey talking in Oculus' announcement of hiring Carmack. (http://www.oculusvr.com/press/john-carmack-joins-oculus-vr-as-chief-technology-officer/)

This still makes sense as to why Oculus would want to get in bed with Facebook, but it sounds like the motivation is coming from Luckey and not Carmack.

I've not been following the Oculus Rift very much, other than waiting for its release and keeping an eye on which games might support it once it's released. So I don't really know much of the history or the company.

Can someone share how Reisse was involved w/ the Oculus Rift? Looking at the company's profile[1], it makes no mention of Reisse, and lists Luckey as the "Founder".

Even searching their site[2] makes no mention of Reisse, other than a recent discussion[3] about his untimely death. And those discussions seem to only refer to him as an "employee".

Is calling him "co-founder" in the title truly accurate?

[1] http://www.oculusvr.com/company/

[2] http://www.google.com/search?q=reisse+site%3Aoculusvr.com

[3] https://developer.oculusvr.com/forums/viewtopic.php?f=26&t=1362