Monday, June 23, 2014

First Take: Oculus deal a big step for virtual…

Think virtual reality is merely a fad? Facebook dropped 2 billion reasons to think otherwise.

The social network surprised the tech world by spending $2 billion to acquire virtual reality startup Oculus, which has dazzled the video game audience with its Oculus Rift headset.

The blockbuster comes one week after another tech giant, Sony, joined the VR space with the introduction of Project Morpheus, its experimental headset for the PlayStation 4 video game console.

As someone who has experienced Oculus Rift firsthand, the headset is impressive. Adventures such as the EVE VR game, which places users inside the cockpit of a fighting spacecraft, prove both thrilling and dizzying.

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"The cool thing about Oculus is they're able to put together a great product in terms of what a head mounted display could be, and they were able to attract a lot of game developers," says Gartner analyst Brian Blau.

It's clear Facebook CEO Mark Zuckerberg sees Oculus as a gateway to fields outside video games. "Oculus has the chance to create the most social platform ever, and change the way we work, play and communicate," he said in a statement announcing the deal. Zuckerberg also said the company plans to extend Oculus to new fields, including entertainment, communication and education.

But video games are still a critical part of Oculus at this stage, and this deal "catapults Facebook into core gaming," says Baird analyst Colin Sebastian. It's also possible Facebook experiments with Oculus and your smartphone or tablet. "Since Facebook is unabashedly focused on mobile, I would think Zuckerberg sees some interesting ways to integrate Oculus with mobile platforms."

There are still plenty of questions surrounding Oculus, arguably the best chance for VR to catch on with consumers. When do consumers get to experience Oculus, and for how much?

And even th! ough Zuckerberg sees VR as a "platform of tomorrow," Forrester analyst James McQuivey questions whether Oculus will escape niche status.

"Unlike mobile, where you can realistically use your phone for hours a day, in any location, for any number of purposes, the eventual utility of virtual reality is bounded by physics, the physiology of your five senses, and the content industry's inability to generate this kind of content easily."

Follow Brett Molina on Twitter: @bam923.

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