This post was written by Neal Moore, Directing Associate and Senior Strategist here at Jump. You can get in touch with him by commenting on this post.
Mark Zuckerberg and company have billions to spend on, really, whatever.
And one school of thought is that a company with that much capital should be making risky investments in non-core, orthogonal businesses just because one of those potentially disruptive technologies could end up being the next big thing.
There’s also the school of thought that criticizes recent acquisitions by big brands like Facebook and Google
as “a reflection of uncertainty as the companies search for tech's next big thing.”
But in either case, this move is much more strategic than that.
If we unpack what’s possible technologically, what’s desirable for Facebook’s users, and what’s profitable for Facebook and their partners, we can come to a new understanding of the opportunity.
Mark Zuckerberg’s announcement
talks about immersive gaming, virtual courtside seats for a game, virtual doctor’s visits, and above all, making it possible to “share unbounded spaces and experiences with the people in your life.” There's no question that this is a long-range gambit.
While the courtside seat case is really interesting for its own reasons—imagine TBS losing clout with advertisers as viewers seek out richer experiences online; the NBA could make deals with Facebook instead—the most interesting thing to me is the core Facebook value proposition: sharing experiences with friends. And with that in mind, we can move into a closer look at what this acquisition is, and what it isn’t.
What It’s Not
Popular assessment of this massive $2B purchase of Oculus Rift seems to be centered on three motivations:
- Making it possible for friends and family to meet up in virtual rooms, creating a more immersive competitor to Google Hangouts
- Blocking Google from the most promising VR technology yet, and beating Google to the next frontier in advertising space
- Enhancing Facebook’s attractiveness as a gaming platform
These assessments miss the mark. Here’s why:
- Casual virtual rooms are a lousy application of VR. Facebook’s brand is about connecting real people. They have video calling; 3D could enhance it incrementally. It’s not about competing with uncanny Second Life or World of Warcraft fantasy worlds. That’s a different group with a different set of needs than most Facebook users who would rather stay in 2D than get creeped out by an avatar of their friend in real-time.
- Blocked from a great 3D interface, Google is hindered, but they still have the world they created with Earth and SketchUp to plaster with ads. If Google wants to make a YouTube of virtual worlds, they won’t own the experience of 3D footage of events captured by friends and family until they make their own Rift-beater. What they will have that Facebook won’t, however, is Google Earth and the world-builders of their former SketchUp unit. Call this one a draw.
- No one needs a more immersive Farmville. Zuckerberg seems to be reassuring excited gamers that the next big thing in gaming will still happen… he’s not buying Rift to shut it down and spoil the party for Sony or Microsoft. He simply doesn’t have to care about gaming platforms; Facebook isn’t threatened by Microsoft or Sony. While Xbox One has its charms as a communications platform with Skype and the Xbox Live ecosystem, it’s far from the kind of adoption rate that Facebook has. Gaming is a red herring.
We know, then, what this acquisition of Oculus Rift isn’t
. So what is it?
What It Is
The real opportunity for Facebook is immersive memories. With this concept, people could:
- Share the journals and highlights of their experiences using Facebook
- Invite their friends into their world one highlight, photo, story, or video at a time. They post, they boast—and their friends enter that world
- Have a richer, more immersive, more compelling experience thanks to Facebook’s newly-acquired VR technology
This concept of immersive memories avoids all of the hang-ups we see with the popular assessment of Facebook’s new relationship with Oculus Rift, and gets right back to the all-important idea of sharing experiences with friends.
To really make the most of this move towards an immersive sharing experience with friends, a playback/control input device like Oculus Rift just isn’t enough. People need to get their experience into the system, which is where things get interesting. What else would people need?
- 3D environment capture
- Wearable 3D experience video capture
- 3D space reconstruction and navigation
- Massive storage and fast access for smooth real-time navigation
- Solid, high-speed broadband
Oculus Rift is a step in the right direction, but there’s certainly a lot that needs to happen in order for users to be able to make the most of this experience. VR is still in its infancy. Using headgear is a big behavioral change, especially at a time when more Facebook use is happening on mobile. That said, this sort of acquisition could be the necessary next step for launching VR into the mainstream.
If Facebook wants to create a system of immersive memories, it needs to think about what companies provide these capabilities (whether to buy or partner), who else wants them, what is in it for them to go through Facebook instead of someone else, and what exactly is an appropriate valuation. With some of Facebook’s other recent acquisitions, it’s clear that Zuckerberg is able to think through these kinds of problems.
If Facebook is serious about taking the next steps to round out the system of IP or physical offerings, there are a few companies that I think Zuckerberg should be looking at:
- GoPro: GoPro is already capturing compelling experiences. Facebook needs more compelling experiences to make the most of this new world it’s trying to build.
- Telepathy One: Telepathy One is a nifty Google Glass competitor with this use case in mind. A system of immersive memories needs memories, and a device like this could help capture those kinds of images every day.
- Panono Ball: Toss it or roll it around, and capture a space. Useful for the type of image capturing that a device like the Rift requires.
- Photosynth: A software that can stich images together faster or as well as Google Street View or Earth—live and at consumer-accessible processing bandwidth by 2016. This, or something like it, is essential to capturing the environment in a seamless way.
- Artemis: Facebook’s interest in broadening wireless infrastructure to reach remote users (drone-mounted hotspots?) could use Artemis’ pCell technology. It could also speed up video transfer rates for already dense areas, a necessity considering the massive bandwidth that this type of imaging requires.
If Facebook is going to create a fully immersive experience, it’s going to need more than just Oculus Rift to do it, and companies like those above could all help Facebook continue to build a full system—instead of just one part of it.
In looking at this acquisition, I find it more useful to think about finding the opportunities present in what information is available. Doing so implies a lot about what could be next—immersive memories—and what’s adjacent to where the brand is today.
In purchasing Oculus Rift, Facebook isn’t looking to make a more immersive Farmville, to create virtual rooms, or even just to defend itself against Google. It’s looking to build upon its core competencies—always a good idea
—and create an even more immersive personal network, the likes of which have never been seen before.