Breaking Down the Facebook-Oculus Backlash - 1

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Breaking Down the Facebook-Oculus Backlash - 1
In the week since Facebook announced plans to purchase Oculus, the general consensus among early adopters of the company's popular virtual reality headsets has been a combination of anger and dismay.

Many were frustrated that a project they funded less than two years ago on Kickstarter was being taken out of the community's hands. Among them was Markus 'Notch' Persson, the creator of another nontraditionally-funded gaming project, Minecraft. In a March 25th blog post, Persson said he found Facebook "creepy," and was no longer going to build a version of Minecraft for the Rift, Oculus's headset. Persson was one of Oculus's top-level Kickstarter backers.

The other common reaction to the news was, "Why Facebook? It's not a game company." The official line from Facebook during the announcement was that it saw virtual reality as something that would be a "social experience," and that it would be the best fit to make that happen. The next day, Facebook CEO Mark Zuckerberg told reporters and investors his company's vision was to build the next "computing platform."

Zuckerberg's use of those two particular words is what should strike a chord with anyone who's been following Facebook's slew of recent acquisitions. Every purchase, up to this point, could be easily explained under the guise of expanding its social media empire.

Instagram was for photo sharing, was for photo tagging through face recognition. Atlas was for targeted ad delivery, and WhatsApp was a pure buyout of instant messaging competition. Sure, Facebook has games too, but there's a huge difference between Words With Friends and crowdfunded virtual reality that can break the uncanny valley (warning: NSFW link).

When Zuckerberg said the words "computing platform," he confirmed that these acquisitions are the beginning of a calculated effort by Facebook to quickly become more than just a social network. He wants it to become a multi-service, online megapower the likes of Google. The reasoning behind the purchase of Oculus is mainly to own tomorrow's technology and be ahead of the curve.

When Google announced it was building self driving cars—using technology and teams built through multiple acquisitions—the move was heralded. Perhaps Facebook's ultimate use of the Oculus technology will get the same response, but for now that seems unlikely. The overall backlash against Facebook doesn't have as much to do with it taking away a community funded project as it does with how the public perceives the company as a whole.

Regardless of what Google has become, it was founded under the mantra of "do no evil." On the other hand, the public opinion of Facebook's mission is still driven by Zuckerberg's statement in 2010 that privacy is no longer a 'social norm.' Overcoming this perception as a company that exists to gather your personal information will be Facebook's key hurdle in becoming the next popular "computing platform." That's an extremely hard task when Facebook is currently under investigation by the FTC for allegedly violating a 2011 privacy agreement.

As for Oculus, it's safe to say the brand is in trouble. The company's vice president, Nate Mitchell, told GameInformer last week:

"We assumed that the reaction would be negative, especially from our core community. Beyond our core community, we expected it would be positive. I don't think we expected it to be so negative."

Mitchell confirmed that Oculus made the decision knowing that it would put off its "core community," otherwise know as its customers. Yet, the market for virtual reality headsets, at least for the next few years, is a very small one. One can hardly blame the sour tone from the Rift's early adopters. The technology is still very much in its beginning stages, and many purchasers are game developers focusing copious amounts of research and development towards the device, with no plans of immediate monetary gain. The announcement of the acquisition immediately put the future of their work into jeopardy.

As for the future of the Rift itself, competitors likeTrue Player Gear are entering the market, and popular video game developer, Valve, is reportedly working on its own headset. The VR community will very likely move to one of these systems, and Oculus may see its promised autonomy within Facebook disappear rather quickly. Of course, $2 billion worth of cash and stock will make that more palatable.

One brand that's taking a public relations hit, without any sort of monetary or intellectual property payoff, is the crowdfunding site where Oculus got it's initial $2.4 million, Kickstarter. Even though Kickstarter contributions are considered gifts (often with the promise of first dibs on a funded product), the reaction of many Oculus backers shows that crowdfunders see themselves more like angel investors than donors and early adopters.

As misguided as that notion is, it will likely make users more wary of participating in emerging technology Kickstarter campaigns and that mentality may seep into other Kickstarter genres as well. Any possibility of a funded product being taken out of the community's hands by an industry giant makes technology crowdfunding feel a lot less like community collaboration and a lot more like doing someone else's legwork for them.

After the dust settles, last week's maelstrom will leave one, clear-cut winner: advocates for equity crowdfunding. Expect it to use Oculus as an example of why the SEC should speed up its approval and regulation of the new investment technique.