Meta’s Oculus VR: A Misguided Metaverse Vision?

What began as a craft project by a 17-year-old in 2009 developed into the catalyst for a new VR era within just a few years. Oculus was more than just a company – it was a symbol of the rebirth of virtual reality. But with the entry of Facebook there was a break with the community and well-known partners, strategic changes of course and ultimately the complete withdrawal of all founders. Today, the Oculus brand only exists as part of Meta’s VR gaming division and could soon disappear entirely due to recent cuts. What remains is a story of innovation, conflict, rapid change and the failure of a vision.

A teenager with vision

Palmer Luckey was just fifteen years old when he first got involved with VR hardware. He analyzed old research reports, military patents and medical VR systems before buying used technology cheaply on eBay and experimenting himself. At seventeen, he built the first VR prototype, called “PR1” – a heavy, uncomfortable, but functional VR helmet. His goal: affordable, powerful VR glasses for the gaming market.

At the beginning of 2012 the time had come: the sixth generation of his prototype, now called “Oculus Rift”, was ready for the public. To this end, Luckey founded the start-up “Oculus VR” together with programmer Brendan Iribe, software architect Michael Antonov and Jack McCauley, who was significantly involved in the development of the “Guitar Hero” instruments. The hobby project quickly developed into a serious tech start-up. However, the decisive personnel came with id Software legend John Carmack.

Oculus is sparking VR hype

Carmack was excited about Luckey’s prototype and showed off the device at E3 2012 with a VR version of Doom 3. A little hype quickly broke out in the gaming scene and Oculus used the momentum for a Kickstarter campaign. Valve founder Gabe Newell also publicly recommended supporting the campaign, and a total of $250,000 was to be collected on August 1, 2012. The total was raised within 36 hours and in the end over 2.4 million dollars were raised from around 9,500 supporters. The enthusiasm was huge: VR finally seemed to no longer just be a research and tinkering topic, but rather tangible for consumers. Carmack joined Oculus as chief technology officer in 2013.

Back in March 2013, Oculus delivered the first development kit (DK1), which was still far from the final product, but enabled developers to create their own games for VR for the first time. A $16 million funding round followed shortly thereafter and another $75 million was added in December 2013. The breakthrough was supposed to come with the “Crystal Cove” prototype, presented at CES 2014. It offered spatial tracking and an OLED display with low latency for the first time. This was crucial to reducing motion sickness, which was a serious problem with many early VR systems. Advance sales for the DK2 began in March 2014. Oculus partnered with Unity and Epic Games, which made their engines free to Rift developers. Valve also shared a lot of know-how and personnel with Oculus and believed in a common goal. The VR world was on the rise.

Facebook changes everything

On March 25, 2014, to many people’s surprise, Facebook announced its acquisition of Oculus for around two billion US dollars. Mark Zuckerberg spoke of an upcoming platform that would enable new forms of communication, education and collaboration beyond gaming. For the social media billionaire, the dream of having his own, self-controlled hardware was finally coming true – his very own iPhone moment. Twelve years later, we know that Zuckerberg’s VR bet didn’t work out, despite the name change and billions in investments.

The VR community was immediately divided back then. Many supporters were also emotionally invested in the “Oculus” project. They saw themselves as part of a movement led by a tech prodigy who was developing revolutionary technology in his garage – for the community and not for a tech company. But the reality was different. Oculus has always been a success-oriented company with great potential, which also received financial injections outside of Kickstarter. So a takeover was only a matter of time.

However, after the start-up, which was perceived as likeable, became part of an unpopular group that was previously known primarily for data collection and platform control, many Kickstarter backers felt cheated. One of them was Minecraft inventor Markus Persson, who immediately stopped his talks with Oculus about a VR implementation of his successful game. A few months later, however, Microsoft swallowed up his company and Minecraft was released for the Oculus Rift in 2016. The takeover also led to a falling out with Valve, which then worked with HTC and eventually published the Valve Index itself a few years later.

The first Oculus Rift and the birth of the Quest

Despite the criticism, product development continued and, thanks to Facebook’s billions, significantly faster than planned. The first commercial Rift headset (CV1) was released in March 2016 for $599. It offered 1080 × 1200 pixels per eye, 90 Hz, 360-degree tracking and, for the first time, touch controllers developed specifically for VR. At the same time, Oculus worked with Samsung on Gear VR, a low-cost mobile solution based on Galaxy smartphones. This was followed in 2018 by the Oculus Go, which for the first time worked without a PC or smartphone, but only had three degrees of motion (3DoF).

A year later, Facebook and Oculus changed course: the Quest, a self-sufficient VR headset with 6-DoF tracking and inside-out cameras, appeared for the first time. The connection to an expensive gaming PC was no longer necessary, which eliminated another barrier to entry. With the Quest 2, Meta 2020 dropped the price to $299 and doubled the performance. The devices sold millions of times, also thanks to software like “Beat Saber”, which is still used today Tops the list of best-selling Quest games of all time.

Quest becomes a closed platform

Since the Facebook takeover, the platform philosophy has changed fundamentally. A relatively open developer platform became a controlled ecosystem. Facebook increasingly demanded exclusive contracts, closed the store for experimental projects and linked Oculus devices to Facebook accounts from 2020 – a step that led to a temporary stop in sales of Oculus VR glasses in Germany.

Developers felt left out, users complained about privacy issues, and sideloading tools like SideQuest emerged to circumvent blocks. Oculus founded its own studios under Facebook and financed exclusive titles. As of 2020, Facebook acquired several well-known development studios, including Beat Games (“Beat Saber”), Ready at Dawn (“Lone Echo”), BigBox VR (“Population: One”), Sanzaru Games (“Asgard’s Wrath”) and Camouflaj (“Iron Man VR”).

The goal was to create a stable pipeline of high-quality, exclusive content for the Quest platform. Over the years, Oculus Studios would produce VR blockbusters such as “Asgard’s Wrath 2”, “Batman: Arkham Shadow” and “Marvel’s Deadpool VR”. Storytelling attempts like the Oculus Story Studio also showed the potential for VR films, but the priority clearly shifted towards games.

The exodus of the founders

Between 2015 and 2021, all Oculus co-founders left the company – a gradual process that revealed the growing gap between the original vision and the new corporate reality. Shortly after taking over Facebook, Jack McCauley left disillusioned with the new corporate structure and changing priorities. Palmer Luckey, the face of the company and inventor of the first prototype, was fired in 2017. The trigger was a political controversy: Luckey had financially supported a pro-Trump group called “Nimble America,” which, among other things, spread anti-Clinton memes. The revelation led to massive criticism from the developer community, with some studios threatening to boycott Oculus products.

Facebook distanced itself, Luckey initially disappeared from the public and ultimately left the company. He himself later spoke of a forced departure. Things have now calmed down and Luckey is working with Meta again through his arms company Anduril. Brendan Iribe, CEO and one of the most important strategic minds behind Oculus, left the company in 2018. The reason: Facebook had stopped the ambitious Rift 2 project, in which Iribe was significantly involved. The decision signaled a clear shift away from high-end PC VR towards cheaper, self-sufficient devices like the Quest.

For Iribe, who believed in the future of PC-based virtual reality, this was a break from the original product philosophy. Nate Mitchell, most recently Head of VR Product at Facebook, left in 2021. Iribe and Mitchell are now working together on an AI project. Michael Antonov switched to the biotech industry in 2019. John Carmack, who joined Oculus as CTO in 2013 and gave the company enormous credibility, also reduced his role to an advisory role starting in 2019. In 2022 he left Meta completely and publicly criticized the group’s inefficiency. In an internal memo, he spoke of “wasted potential” and an organization that is moving too slowly despite enormous resources.

Rebranding and metaverse change

Without the original minds behind Oculus, Facebook made a radical change of course in October 2021: The company renamed itself Meta and declared the “Metaverse” to be its central vision for the future. In an elaborately staged keynote, Mark Zuckerberg presented a world full of virtual spaces in which people should work, play and meet. His VR glasses were intended to be the gateway to this new reality. But most people seemed rather confused by Zuckerberg’s vision. As a result, the Oculus brand was gradually evaporated. Oculus Quest became Meta Quest, the Oculus logo disappeared from the devices, and the standalone Oculus app was integrated into the meta infrastructure. What had once started as an independent start-up was now completely absorbed into the group – not only structurally, but also symbolically.

Zuckerberg’s metaverse strategy should consume enormous resources. In 2022 alone, Meta invested over $13 billion in its Reality Labs, the VR and AR division. But the results fell short of expectations. Horizon Worlds, Meta’s social VR platform, has always struggled with low user numbers, technical problems and an uninviting aesthetic. Early on, critics scoffed at the cartoonish avatars without legs, which were more reminiscent of early Second Life experiments than a revolutionary online platform. Instead of an open, collaborative VR world, a closed platform approach emerged. The original vision of the Oculus founders – open standards, developer freedom, community proximity – was increasingly pushed into the background.

Meta controlled hardware, software, store and content. Linking to Facebook and later Meta accounts became mandatory, and data protection concerns increased. Developers complained about non-transparent guidelines and arbitrary rejections in the App Store and the hoped-for industry growth failed to materialize even with improved and affordable devices such as the Meta Quest 3 and Quest 3S. Today, Meta relies primarily on artificial intelligence and smart glasses, while virtual reality only seems to be an afterthought.

Oculus once paved the way for virtual reality into the present. Without Luckey’s pioneering work, Carmack’s support and the enthusiasm of early supporters, many developments in the industry may not exist today. But history also shows how quickly an ideal can be replaced by corporate logic. The meteoric rise of Oculus is also a lesson in the risks of takeovers in the tech sector and misunderstood and misguided visions. With the huge savings in Meta’s VR gaming division and the closure of numerous studios, it will only be a matter of time before the last remnant of the once celebrated start-up disappears from the VR scene.

(joe)