Just before the Oculus Rift Kickstarter campaign launched, Brendan Iribe brought what looked like a large hunk of plastic into the San Francisco offices of Unity Technologies, whose game development platform is one of the industry's most widely used. Unity CEO David Helgason tried on what was the very first version of the Oculus Rift, a virtual reality headset whose maker was destined to be bought out by Facebook for more than $2 billion before ever having a product hit the market.
"It was really, really bad back then," Helgason told BuzzFeed News in an interview. "It didn't know what was down — they had to hard-reset what was down, otherwise the world would seem like it was tilting. Even then it was such a touching experience to be inside a world like that. But I got super sick from the first dev kit. It was terrible, right, but even then it was such a touching experience."
Since then, the Rift has made a lot of progress. Even the very first iteration of the device, with all its flaws, was described by many who used it — both veteran game developers and regular users — as a masterpiece. But in interviews with more than a dozen game developers and executives either building applications for the virtual reality headset or familiar with those who are, one clear theme emerged: The Rift's biggest challenge isn't getting the technology right.
Instead, the make-or-break issue will be beating the competition and winning the hearts of developers, as swarms of technology majors pour billions into rolling out their own virtual reality devices. And unlike Oculus and its parent company Facebook, the competition has a track record of pushing out devices and games that reach, and delight, the mass market. At the Consumer Electronic Show this week in Las Vegas, manufacturers are expected to show off a wave of VR devices — and Oculus, too, will be there.
The Rift faces the tech industry's perennial technology chicken-and-egg scenario: To get software developers on board, you need your devices in the hands of a critical mass of consumers — and consumers gravitate toward devices that have the best software. Facebook has many things going for it: near limitless cash, a visionary leader, a deep pool of technical talent. But it has no experience building or publishing games, which in the early days will be the killer app of virtual reality headsets.
A representative from Oculus VR declined an interview request for co-founders Iribe and Palmer Luckey.
The Rift needs hit games, and fast. Words With Friends creator Paul Bettner's studio, Playful Corp, is one of the first publishers Facebook is working with to build those critical launch titles. Independent developers are still encouraged to develop for the kit through platforms like Unity, but with the competition racing to define the market, Facebook has rapidly begun working on developing its own software.
"I've been a huge advocate within Oculus pushing for a solution to that chicken-and-egg problem," Bettner told BuzzFeed News. "It depends on who you talk to; my sense is that gamers and video games are the Trojan horse required to get virtual reality off the ground. From my standpoint the way you solve that, it becomes like any other console launch."
The Nintendo Wii, which pioneered novel methods of gameplay using sensors and hand gestures, is a good example of the challenge ahead, Bettner said. "The Wii was doing enough things different that they were basically launching something [brand new] — not the same as VR but they had to prove this new controller was something people want to buy instead of buying a PlayStation," he said. "They went out and built a bunch of first-party software [like Super Mario Galaxy and The Legend of Zelda] that proved the value of that platform, because they couldn't rely on developers to do that."
For now, the most formidable Rift competitor is Sony and its Morpheus VR headset. Through the PlayStation, Sony has a proven history of driving the adoption of new hardware, and whenever a new console comes out, Sony can lean on decades of relationships in the video game industry. On top of that are the game development studios it owns, which can finance to create massive sales-drivers like Uncharted and The Last of Us. That financing doesn't just fund large development studios, but also massive marketing and advertising campaigns that can span from billboards to television and the Internet — and potentially even Facebook itself.
Releasing a big, expensive new game alongside a flagship new console is a dance Sony and the big studios have done for a long time. "When you do co-launches, you're dependent, much like in your best friend relationships, and you learn over time who you can count on and similarly who you can't count on," said Kleiner Perkins Caufield & Byers partner Bing Gordon, a longtime executive in the industry. "You know these companies have been to war together. Their relationships have stood the test of time."
Sony, too, has already demoed launch titles for the Morpheus, like Eve Valkyrie, a space-piloting game that's a spin-off of Eve Online — a game beloved by a niche of hardcore players who devote hundreds of hours to playing. Square Enix, the creator of the Final Fantasy series, has also planned to launch a version of Thief.
Many developers are also expecting Microsoft to have its own take on a VR headset, and like Sony, it has a proven record driving console adoption. Indeed, of the developers BuzzFeed News spoke with, many described an industry that is essentially holding its breath to see what Microsoft comes out with.
Other competitors are also trying to get in on the action. Samsung released its own virtual reality system, the Gear VR, which connects Samsung's Galaxy Note 4 to a headset powered by software from Oculus VR. Samsung might not fall directly into the category of competitor due to its partnership with Oculus VR, but the company has massive production and distribution channels and knows how to push devices through global retail channels in huge volumes. The company's Galaxy Note phones are often credited with creating the market for larger "phablet"-sized phones.
And the competition could potentially expand beyond simple VR headsets. Magic Leap, a tight-lipped company specializing in augmented reality, raised $542 million in a financing round last year that Google led. The search giant had previously created an augmented-reality device of its own, Google Glass, which has so far failed to create an enthusiastic user base.
Each competitor has different, but equally formidable, mechanisms for getting as many devices into as many households as possible. And volume attracts not only developers — who will inevitably build the killer app that sends VR mainstream — but also large game publishers like Electronic Arts, Ubisoft, and Activision-Blizzard. Ubisoft's Assassin's Creed franchise has been a staple for consoles — but if it's going to make it into a VR headset, it's going to find its way to the best-selling hardware first.
The same holds true for independent developers. For a small development studio, creating a game for multiple platforms takes a lot of time and money — both things in short supply for a small team, or a lone developer. While the process of "porting" games — translating the code to work on several consoles — has gotten easier, developers still have to ensure the game feels right.
"If you have a PC game that uses a keyboard and you go to console, you have to come up with a new way to come up with an interface," Mike Bithell, the creator of Thomas Was Alone, told BuzzFeed News. "We took [Thomas Was Alone] to iPad, we had to completely reinvent the way to control. Those changes pile up. The porting the code bit, is probably now — and it's weird to say it — the smallest job."
Facebook CEO Mark Zuckerberg acknowledges the challenge. "It needs to reach a very large scale, 50 million units to 100 million units, before it'll really be a very meaningful thing as a computing platform," Zuckerberg said on the company's third-quarter earnings call last year. "So I do think it's going to take a bunch of years to get there. Maybe, I don't know, it's hard to predict exactly, but I don't think it's going to get to 50 million units or 100 million units in the next few years."
Zuckerberg's vision for Oculus Rift isn't necessarily restricted to games. And the applications for the Rift could very well go beyond simply video games; Zuckerberg himself has said it is essentially a bet on the future of the internet. But device adoption has historically been driven by games, whether with consoles or smartphones, and in getting into the console business, Facebook faces one of the greatest competitive challenges in its 10-year history.
Still, Oculus VR — which Facebook says has shipped more than 100,000 development kits — won an early victory by proving there was a market for an inexpensive virtual reality headset. And it captured the attention of developers around the world, thanks in large part to co-founder Luckey's own enthusiasm. In buying Oculus VR, Facebook put itself in a strong position, with widely distributed software developer kits, or SDKs for short, ahead of other device manufacturers.
Early in the company's life, John Carmack — the creator of the Doom series and one of the most-revered minds in the gaming industry — joined as Oculus' chief technology officer. The company also hired Michael Abrash from Valve — the company behind the Half LIfe and Counter Strike series — as the its chief scientist. Prior to working at Oculus VR, Abrash was working on a VR system for Valve around the time Luckey was creating prototypes for the Rift.
That early enthusiasm served Oculus well. Initially, Luckey and Iribe sought to channel the independent developer community, which was as excited about building an experience on a cheap VR headset as the duo were. In theory, the technology was so new and fascinating that it would be able to collect enough developers to hopefully strike gold and create the Mario or Angry Birds of the virtual reality era. One hit is often all it takes to make a platform take off — Halo drove the Xbox and Super Mario World drove the Super Nintendo.
But under new ownership, observers in the industry have already noticed a shift in how Oculus approaches the developer community. As Facebook has taken over, the company has enlisted the likes of Jason Rubin — best known for the Crash Bandicoot series and initial success of Naughty Dog — to begin focusing on content. Jason Holtman, who joined from Valve, is also playing a significant role in growing the company's publishing efforts.
It all makes for a frenzied environment among game makers. "The entire industry is exploding behind closed doors," Cloudhead Games Creative Director Denny Unger, whose company is developing for Oculus Rift, told BuzzFeed News. "You have [Samsung's] Gear VR, you have Oculus, you have Morpheus — which we're developing for as well. There's a number of other players that are working on stuff in secret; it's this maelstrom of innovation happening at the same time. As a developer it's tricky to hedge your bets on one system."
Unlike the traditional game console makers, Facebook also has the opportunity to create an virtual reality software development kit that can span multiple hardware sets — potentially shifting some of the burden of producing hardware on to more experienced manufacturers, while still maintaining its own line of devices. Luckey, too, has said it would be a positive outcome for Oculus. "In the long run, we would love to see content made with the Oculus SDK running across a wide variety of hardware," he noted in a comment on Reddit.
Iribe, too, has said something to the same effect: "If we do want to get a billion people on virtual reality, which is our goal, we're not going to sell 1 billion pairs of glasses ourselves," he said in an interview earlier this year.
This is essentially a hedge against losing out among developers. Should Microsoft or Sony become the dominant hardware platform, Oculus VR can seek to embed its technology across the widest number of devices. But that, too, is dependent on there being enough room in the VR market for devices that aren't made by the big console companies.
The fight is expected begin in the second half of 2015. But David De Martini, the former head of EA Partners who joined Oculus as its head of partnerships and has since retired, said the quality of its technology means Oculus could lose the battle over the first hit game and device, but still win the war.
"Even if the platform doesn't take off rapidly when it first releases, it will win [because the immersive experiences on the Rift] are so far and above revolutionary," he said. "When people see the capability of the platform, they'll flock to it. That could be ahead of the release or as the product releases. It'll lead to a slower rate of adoption, but ultimately it will win because it's so amazing on those dimensions."
Matthew Lynley is a business reporter for BuzzFeed News in San Francisco. Lynley reports on Silicon Valley and the tech industry.
Contact Matthew Lynley at firstname.lastname@example.org.
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