Why You’re Right to Be Worried About the Facebook-Oculus Deal

The Kickstarter Myth

Most members of the gaming community became aware of the Oculus Rift thanks to two things: the ringing endorsement of id Software co-founder and Doom co-creator John Carmack at QuakeCon 2012, and Oculus’ Kickstarter campaign. The latter garnered impressive support, drawing some 9,522 backers who donated a total of $2,437,429 — nearly 10 times the stated goal of $250,000.

At its best, Kickstarter is a pre-order system. At its worst, it’s panhandling with an elevator pitch.

It’s as much the fault of Kickstarter as it is Oculus that backers and players are upset about Oculus pulling down $2 billion by selling to Facebook. The very nature of the crowdfunding service is to help bring into the world creative projects that couldn’t otherwise get made. Oculus pitched the Rift to consumers and asked them to donate (or at the least, pre-order an early prototype software development kit) in order to help make the Rift a reality.

Kickstarter subsists on a culture of consumers and creators banding together to circumvent the traditional gatekeepers — rich folks who get to decide what gets made and what doesn’t, since they control the money. It’s a camaraderie service as much as anything, but with consumers sharing the risk for a project with the creators.

But the difference to the usual system is consumers don’t “invest,” since traditional investors risk their money for the chance of making more. Instead, consumers are offered Kickstarter “rewards” that a project or company is under no legal obligation to actually provide. At its best, Kickstarter is a pre-order system. At its worst, it’s panhandling with an elevator pitch.

The issues of crowdfunding aside, the culture of asking consumers to help with a project often outwardly states, and always implies, that the project needs the help of consumers. It’s a great idea that can’t get off the ground. The gatekeepers won’t let the creatives make their dreams come true. Only you can make something like the Rift a reality — fuck The Man, we can do it together. That’s the narrative crowdfunding creates to separate donors from their money, and it’s a narrative Oculus benefited from to the tune of $2.4 million (and more if we make the short leap in thinking Oculus’ securing of venture funding was helped along by its extremely successful Kickstarter).

In funding the Rift, players gave their money to the idea that they would help Oculus realize its vision on its own terms — something reiterated by Reddit users commenting on Luckey’s post, and something echoed in a blog post written by Notch.

“I did not chip in ten grand to seed a first investment round to build value for a Facebook acquisition,” Notch wrote. That’s exactly the sentiment many who backed the Oculus have right now.

It doesn’t help that Luckey himself said in 2012 that Oculus would not sell out to a larger company.

“Oculus is going forward in a big way, but a way that still lets me focus on the community first, and not sell out to a large company,” Luckey said on the Meant to be Seen forums.

So while of course businesses exist to make money, to generate profit, and to sell products to those ends, Oculus’ use of Kickstarter traded on a more altruistic narrative — that it was existing outside the usual paradigm and needed donations in order to realize its great idea. It’s callous to ignore the fact that that’s how Rift was sold to Kickstarter backers, who contributed no small amount of money to help make it happen.

But as it turns out, the Kickstarter narrative of donors banding together to help creators realize their crazy ideas is a myth. The Kickstarter myth exists as long as it’s convenient to helping people get free money out of consumers, before it shifts to, “Well, this is capitalism, of course they were going to sell out / were in it for the money / weren’t actually in this together with donors.” If you’re feeling like a chump for buying into the story, you’re not alone.

Donors invested themselves in the idea they were becoming a part of helping a vision become real — not helping to build value in a company that, it’s worth recalling, hasn’t actually really made anything yet. Selling the company with its promise to backers unfulfilled feels like a betrayal because in a very real way, it is.

The Appropriate Response is Skepticism

Of course, at least some of this is a matter of emotional attachment to a company that, ultimately, was nobody’s friend. It’s unfortunate that Kickstarter perpetuates an altruistic myth of consumers helping to bring good ideas into the world, when the reality is that good ideas clearly have no need to beg for free money. Good ideas make money and people with money want a piece — it’s the system as it has always worked, and crowdfunding culture is often twisted to allow even bigger benefits from the traditional system to everyone involved, except consumers.

The fact is that the thing Oculus has positioned itself as has changed drastically.

All that said, Oculus being bought by Facebook is just an event, and there’s no information yet as to how to judge that event. Facebook has a bad reputation but it also has been decent to Instagram and other acquisitions, and the members of Oculus who the public trust insist the company will continue as it has, but with a great deal more resources.

It all really could work out for the best, the way many members of the tech and games journalism community seem to think.

But Facebook’s questionable history in dealing with users, Oculus’ apparent exploitation of the altruistic nature of crowdfunding, and the fact that the VR company was in no way hurting for cash thanks to venture capital funding means gaming fans are fully in the right to be at least skeptical of the deal.

The fact is that the thing Oculus has positioned itself as has changed drastically. Its goals have changed drastically. It now is part of a company that has quarterly reports and income projections and, most importantly, shareholders to whom it is responsible. Oculus’ very nature is different. That can’t be ignored.

It’s certainly too early to judge Oculus based on its decision to sell to Facebook. As Jim Sterling put it in his latest episode of “The Jimquisition,” in reality, it could be worse — Oculus could have been acquired by a gaming company, after all. Facebook has a much better track record with acquisitions than pretty much any major gaming corporation. You’re just as likely to see ads in your VR with EA or Microsoft taking over Oculus as Facebook.

There’s also the upshot that Facebook’s investment creates an even bigger, more intense public focus on virtual reality; Facebook just spent $2 billion telling the world there’s a burgeoning VR market where there’s money to be made. That’s going to mean more competition as other companies amp up their VR work, or jump in anew. And that could bring about the VR world players were hoping for when they first heard about Oculus, as much as one company working with the backing of Facebook.

But as for Oculus itself, it’s time to exercise some skepticism and some patience, and to wait to see exactly what a marriage with Facebook will look like.


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5 Comments on Why You’re Right to Be Worried About the Facebook-Oculus Deal

Cru

On March 27, 2014 at 12:19 pm

Hahaha, I am never giving to kickstarter again. Good job Oculus.

SweetPea

On March 27, 2014 at 1:21 pm

I liked Palmer Lucky. I liked Oculus. As someone has mentioned on reddit, Luckey could have been the next Steve Jobs. I agree with that. I watched his presentation on Steam Dev Days and I was amazed how enthusiastic he was. He finished it by saying he believes VR is going to be the “most important technology in the history of humanity”. I absolutely can’t believe that this guy would sell out to Facebook. Gabe Newell didn’t sell Steam to EA, because he knew the consequences. Luckey just destroyed his repuation. Even if he didn’t make the decision, he’s the face of the company.

There is a huge potential in VR, more than people realize. Ford was interested in it, NASA was interested in it. Oculus hasn’t even released anything, and they get an offer of 2 BILLION dollars. This should have been a clear sign NOT to sell out. The value of Oculus could only go up with time and they weren’t really in need of money. Even if they were, why not go to Valve? That seems like the obvious choice, they have been “friends” from the beginning.

But now, all that is gone. Oculus is no longer and independent company. The whole announcement is full of PR-bull, as is Luckey’s post on their website. That’s the future of Oculus. Already, they’re talking about social experiences, whatever that means. SOCIAL SOCIAL SOCIAL. That’s the complete opposite of what a lot of gamers look for: escapism. Maybe I’m being too negative, but I’m done with Oculus.

Rickshaw

On March 27, 2014 at 7:41 pm

I have always believed in the old saying

“FACEBOOK SUCKS!”

quicktooth

On March 27, 2014 at 9:22 pm

I wish to add my voice to SweetPea’s. They’ve just said nearly everything I’ve been thinking. I can add to that that Cru’s response, to utterly distrust Kickstarter, will be completely validated if that company does not sue Oculus. They made a project under false pretenses, it’s that simple. They didn’t need the money Facebook was offering, as the article above says they simply used the altruism and goodwill of consumers to make an incredible pile of money- all without even actually releasing a product!! If kickstarter can’t protect it’s own funding model and the trust of consumers, then the model it has, built entirely *on* trust, will dissappear. I for one am backing no more projects until I can be *sure* that I’m not getting screwed.

Anonymous

On March 29, 2014 at 4:40 pm

Luckey’s just a wide-eyed naive kid.

We’ve still got Razer to look to for VR. Logitech will probably follow. Sony and MS will probably end up making something for their next gen consoles after XboxOne and PS4.