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The negative reaction isn't because of any of that, it's because it's Facebook.

Microsoft, Apple, Google, Valve, hell even Dell would have all been acceptable acquirers for most PC gamers backing the Oculus Rift.

Microsoft/Apple would have been bad because that would lock the Rift to a single platform.

I wonder if Microsoft considered Oculus but figured they had the Research heft to build their own independently and for less than $2b? Oculus have been pretty public about what they've learnt along the way, so that information might give pursuers handy shortcuts.

Even though Rift might not be locked to a hardware platform it will likely be tightly tied to the Facebook platform. Welcome to the Metaverse, please login using your Facebook account to proceed.

What makes you think that when you can't log into Instagram with your Facebook account?

That's a good point. I think the difference is that instagram had an existing userbase and social ecosystem that complemented Facebook nicely as another content stream.

I don't think you will need a Facebook login to play games, but Facebook will likely monopolize any social aspects. Even if they don't overtly lock out other social players, I think that developers will be skittish to invest a lot of time and money developing the new Second Life with the risk of Facebook cutting them off at any point if they are seen as a competitor.

I think this was mentioned on the ATP podcast, but I can't remember...

Facebook isnt trying to be Apple and buy companies that contribute to their core products. They want to be Disney (who owns ESPN, Pixar and many others).

They've bought these companies (Instagram, Parse, WhatsApp and now Oculus) to largely leave them alone as independant companies operating within Facebook.

What is a specific likely worst-case you have in mind with Facebook?

Risks with other potential acquisition partners:

(1) Valve - limited scope. Valve would be fine if Oculus's future were limited to gaming. But they add little value, in balance sheet or experience, for a broader play. Valve + Oculus is only marginally better positioned, for revolutionising computing, than an independent Oculus.

(2) Microsoft - too conservative. Big organisation without a history of funding moon shots. As for pairing Oculus with Xbox, I'd copy the concerns with Valve.

(3) Dell - underinvestment. Dell is undergoing a private-equity turnaround focussed on optimising operating metrics for an IPO. Not a healthy environment for an open-ended, capital-hungry start-up with an adventurous future.

Apple would have been a fine home for Oculus. I suspect VR's market isn't mature enough for Cupertino. But I do not see a material difference between Google and Facebook. Privacy concerns exist at both, and both have a mixed record of integrating acquisitions. What both have is lots of ambition and the surplus capital and experience with which to fuel it.

Microsoft have history dealing in-depth with education, business and gaming, plus hardware, operating systems, mobile and so on. Facebook's core appears to be social and a little more superfluous.

Microsoft has a history with gaming because they built the Xbox. Facebook will have a history with gaming, hardware, and more because they will build the Oculus.

Microsoft pushed gaming long before the XBox. The XBox was just the next step.

  What is is a specific likely worst-case 
  you have in mind with Facebook?

That they realise there's no overlap between their products, so they discontinue the VR products and transfer the employees to web ad targeting.

More precisely they make a play for the "VR socialisation" arena but it's a half-hearted attempt because VR socialisation is some manager's pet project rather than their core business, facebook vr socialisation goes the way of Second Life, and the consequence is the same.

> *[Facebook] discontinue the VR products and transfer the employees to web ad targeting"

Oculus has 50 employees [1]. Facebook did not pay $40 million per employee to scrap their product.

Oculus is also a bleeding-edge hardware start-up. It was more likely to drop dead all on its own than at the hands of well-capitalised owner.

[1] http://www.crunchbase.com/company/oculus-vr

$40 million.

  Facebook did not pay $400 million per employee 
  to scrap their product.

If paying a lot makes acquisitions succeed, maybe facebook should have paid more to make the acquisition even more successful :)

This deal reminds me of ebay buying Skype: Two technology companies, both with reasonable products, but nothing to do with each other.

Nothing to do with each other, but eBay made $1.4B on the deal.

I see the absence of overlap as a good thing. It means it's highly unlikely that Facebook threw down $2 billion for some gimmicky social integration that a tiny sliver of their userbase could harness.

The Oculus team is cutting-edge hardware along a completely different vertical, orthogonal to facebook's core. Despite their size they have the talent and expertise to create that entire market by themselves, provided adequate funding. Facebook does not have to interfere at all, beyond writing the cheques. Over three years, Facebook could have itself a new gaming product to compete with Sony and XBox... in five, it might have an innovative consumer device to take on Apple. The conglomerate model typically has better odds of long-term survival - what happens when people grow tired of social in its current form (primarily content curation)? Then facebook's flagship product would be obsolete.

Worst case with Facebook:

     - It would signal a shift toward gimmicky experiences targeting a
       casual market that wouldn't spend several hundred dollars on a
       piece of esoteric hardware.
     - It would spoil an opportunity to partner with a company that has
       much more experience in hardware, gaming, dev tools, or anything
       else Oculus could use to take off.
     - The likely integration with Facebook's authentication and social
       services will cause the product to suffer from all the ill will and
       distrust Facebook has generated within parts of its userbase and
       the developer community. Branding is important, and to these
       communities - the ones Oculus likely needs to take off - Facebook's is poison.

An acquisition by Zynga or Gree might've been almost as bad, but any of the other companies mentioned wouldn't have signaled such a shift, and such a betrayal of the intent of the initial kickstarter investors and hopes of its supporters. Oculus appears to gain nothing but money from this deal. I'd say the announcement alone squanders Oculus' only relevant lead over Sony and others.

Actually, I'm surprised that Apple didn't get to Oculus. Apple has a history of being a catalyst in markets that are not yet matured. They did it with the iPod, iPhone, and iPad. All of them were preceded by plenty of products that perhaps looked very similar on paper, but were a completely different (clunky) experience to use until Apple showed the market how it's done.

Oculus might've been what the Macs needed in order to take gaming market-share from PCs. Missed opportunity for Apple. In my opinion, would've been a bargain for them at $2B.

I'd be interested to know what you think of Twitter as a potential owner.

The true innovators maybe are the ones that exist by themselves without being "acquired", or before they get acquired (Apple was, is and will probably surprise again in the future, as will Google and Microsoft)

Once they get acquired...well...Skype Hotmail etc etc...(who are they again?)

And that's ok I guess, there's a lot of drive to create and grow (hack?), being top efficient and innovative on a shoe string budget, until you get a nice big fat pay check.

Maybe the little guys with big ideas are only "useful" until they get acquired, by that I mean that maybe it's more of a natural process that one thinks... Maybe by the time the technology is "invented", showcased and becomes stable enough to be "mainstreamed", it's time to collect your dollars and medal for "honourable service to xxxxx industry" and either move onto something else that will be cool and make you more (or less) money eventually and produce more internet "apps" addicts, or retire to the beach.

Even aquisitions from those companies would have been met with disappointment. I think folks were hoping for Oculus to stay independent.

>The dedicated attention from such a world-changing technology must have been special. The backlash against losing that special status is understandable.

While I agree with most of what you (eloquently) said, I take issue with the idea that gamers' reactions are a result of feeling less special. I'm at most an occasional gamer myself so I can't speak for "gamers," but do give them a little credit. Facebook doesn't have the best track record dealing with gaming companies and, as Notch noted, their motives are inherently different than the motives of the sole Oculus Team. This isn't necessarily bad, but it is a change. And change, particularly for something that appears to be on such a good path, introduces risk. And risk is scary for people who are emotionally invested.

But it were this few from this so unimportant minority that filled their Kickstarter project with money, making this thing get so far. Advertising for it. Sharing propaganda and knowledge. They are the ones that could do this in the future with an end product making it desirable. Right now I don't see the usual FB people buy this thing. I see nobody really besides the gamers. Most of the people won't have a gain from it. This is not for MOST OF THE PEOPLE. It will remain an product for minorities for a long time.

They betrayed the gamers and this people will now jump on every possible alternative that comes around (and we've heard that there are things coming up already). Also they will hesitate to trust anybody else on something they love that much. This will hurt other start ups.

I keep thinking about Parse, a startup that Facebook bought a while ago and has mostly left alone to do it's thing.

I don't see the usual FB people using Parse. I see nobody really besides the developers.

Sure but this is not just another app developing platform...

How about friendfeed? It was a direct competitor to facebook. Also left alone, still working the same, no ads or gimmicks added: http://friendfeed.com/ ... the only thing that's changed is improved uptime. Or instagram?

Are you really comparing those exchangeable webpages to a revolutionary human interface device?

All these webpages will go. Like FB. The device will remain there until we manage to implant something directly in our brains. We are talking about a new "mouse" here.

The other thing is that it's probably going to be quite a long time yet before PC gamers actually become a minority of the Rift customer base. The whisper number for the first consumer version's resolution is 1440. At that resolution it will take not only a maybe-$300 Rift CV1 to play but also a seriously hefty video card to keep it fed with something like a steady 90 frames every second. (No currently-existing Crossfire/SLI setups need apply, as they introduce too much latency.)

Read any startup book or blog: you can have a grand vision but you must start solving one small problem and expanding from there. Winning one niche and then scaling.

When you go after everything at once you go after nothing in particular.

But VR's potential isn't limited to gamers. That is what Facebook recognised and is capitalising on with this acquisition. Oculus, as a (perhaps the) leader in the consumer VR space, is well positioned to shape the future of VR and with it consumer computing. They had a choice between a niche and the market, and they are reaching for the moon.

Of course!

I'm surprised no one realises this is move to protect Facebook against Google's move into devices, specifically Google Glass.

Facebook doesn't want to be a sharecropper on a platform owned by Google.

I'd expect them to be looking at other companies in the "connected device" space too: Pebble, FitBit etc.

The assumption of the gamers being a minority is incorrect, at least for young male adults [1].

[1] http://www.nbcnews.com/id/28101518/ns/technology_and_science...