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Oculus Consumer version = Valve's VR HMD? - Crazy?

MarkM
Level 2
I saw the announcement where Valve is going to show their VR HMD in January. See this link:

http://www.roadtovr.com/vr-headset-valve-virtual-reality-steam/

We also know from that article as well as others that Oculus VR has been working closely with Valve.

We also know that Valve is entering the hardware space with their Steam Machine.

We also know that Oculus VR is a startup that requires funding--and a lot more than 16 million dollars to launch a hardware product into the consumer space. Well some of us know this anyway.. ๐Ÿ™‚

What I am thinking is that what will be announced in January by Valve is either the acquisition of Oculus VR or a significant investment into Oculus VR that allows a Valve branded Oculus HMD to be released. My bet it is an acquisition.

It just doesn't make sense for Valve and Oculus to be working together on what would end up being a competing products. It also shows us where the funding is going to come from to get a HMD into the consumer space. Tell me if you were the Valve CEO would you build it or buy it? What would be the best for Oculus VR?

Crazy?

Let me know your thoughts.
16 REPLIES 16

virror
Level 3
$16 million is not a lot of money considering the amount of staff they seem to have atm, also they already confirmed multiple time they have external funding already.

I think Oculus and Valve will release their own headsets but using the same API as this will be beneficial for both parties, and two big players using a standardized API will hopefully make future manufacturers more likely to implement the same API for their product.

DarkAkuma
Level 3
"Dreamwriter" wrote:
Sure it's not an insane idea for the two companies to be independently working on their own thing, but it's a stretch to say that "all indications" are that that's happening - there are no indications at all pointing at that being the case.


Considering that the "all indications" that I'm talking about are in that article (and another from Oculus that I'm not looking up to quote) and state that they are working on their own prototypes, it's not a stretch to say that.

Granted we know that the Oculus prototype is leading into the DK2 and CM1, but we can only guess at this point that Valves prototype is leading into a product. For all we know the prototype is just something they're working on to learn with, with no plans of release.

To assume anything other then them making their own HMDs at this point with what we know would be a "stretch". Because that's just all the info we have right now.
Project: Ocarina - The Legend of Zelda, Ocarina of Time in VR @DarkAkuma_ - Twitter http://darkakuma.z-net.us/ - My Blog http://www.z-net.us/ - SNES Online Gaming

MarkM
Level 2
Some really great points here.

I wanted to comment on a couple of them. I do believe both companies are working on their own prototypes. That much would make a lot of sense--the combined R&D approach with Oculus looking at some angles and Valve looking at another--sharing research (and cost) to come up with potentially one great product. If they were going to compete it doesn't make sense to share. Business rarely if ever works this way. The one SDK comment is understandable but I think it unlikely. Whichever device wins the hearts and minds of the emerging VR market will be the one supported. Further I don't think the SDK is the big hurdle anyway.

The potential of Valve going for a two screen solution only makes sense if you believe that Valve is not interested in the PC marketplace and has another box in mind to drive it

You wouldn't try to sell a product into a new market with only of the most powerful PCs being able to do the job. Most people who buy computers these days are buying laptops and most cannot drive multiple displays. Those who have machines that can are in a small percentile in comparison. If it were me I might make such a dual screen product but only as high end offering. The cost of the device would be higher and the market would be smaller. Again, in my opinion and no offense intended to anyone who believes in the dual screen solution as a first consumer VR product.

There is something else that is obvious here--it is not like these two companies are of equal strength. Valve is a well established well funded revenue generating enterprise. Oculus VR is a start up with only two publicly known infusions of capital -- first with kickstarter and 16 million in funding. I do not know the headcount at Oculus but it is safe to say with offices in multiple locations and a reasonable staff size the burn rate could easily be 200k a month if not higher. Trade shows and travel--my guess is 200k is a low number. Truly to compare the two is like David and Goliath. I see them as compatible partners but not equal in any way. Oculus is specialized and focused and burning money with an investment group who has big plans for this to be something big and not a hobby market. Valve is a business that spends money on R&D and generates revenue as the key focus.

One area I do have a lot of personal experience is in is developing and managing consumer software products that were carried in retail in nearly every major retail location you can think of --all major retailers (Best Buy, Walmart, Target) These retailers buy very little of any product from traditional distribution channels any more. You are either direct with them with a line of products they want/need or it doesn't get in. If you do get in you need to build and ship the product into their stores on consignment. Now maybe this is different with hardware but I don't think so. Maybe someone out there knows?

The retailer's value is access to the market and believe me when I say they make everyone pay dearly for it. They also have no tolerance for risk. They know exactly how much money per square foot of shelf space should generate and if doesn't it is out. In order to get the turns there has to be demand. How does Oculus create demand? Where does the money come from to market and create that demand come from? Please don't say you can do that with the 16 million.

I'd say short of this being the next "Furby" with it just hitting every major news outlet because it is so cool. it will likely be hard for Oculus to even get a meeting since they would only truly offer one product. They only place they could get product placement is in specialty retail but then those places are going to be low volume and spread over a large area. That is the hobby market that the Oculus investment group unlikely signed up for. What I believe based on my experience with investors is that there has to be a clearly defined exit strategy that is short term with a understood upside or there would not have been funding in the first place. Investors these days are not interested in trying to establish a new market. They want to find ways to participate in existing markets with a slight twist on an old understood formula. Right now -- the formula is investment into a companies that are likely to be acquired with some probable noted exceptions.

I will go out on a limb here and say the dreams of driving down to your local retailer and scooping up a consumer Oculus Rift are not very likely based on what I know about this business. I could go on to write a whole commentary of why retail is failing in technology and no it is not about Amazon it is this zero risk mindset of retail that doesn't use the power of its reach to get NEW products out there. It really is the same old thing--where nothing is new unless it is considered "safe" and gets the turns. That is why people don't go to retails locations to see new things. That is not where they are. It didn't use to be that way. I digress.

Oculus VR needs a partner who has access to the channel. Who has credibility. Who has the ability to mitigate the risk. That is another piece Valve brings to the table. They have this access and the capital.

Let me take you down one last path...

Someone said they could get manufacturing up in China for 150k. I won't argue as I never done it but I think we have to look at what it costs to get to the point they can manufacture something. First off whatever they come up with will need to have what ever is special about it covered by patents. That has to be a part of the road map as truly the value of Oculus VR s their intellectual property. Sony, Microsoft and Samsung will be happy to rip off the innovations and make it their own. The Microsofts and Sonys of the world are not friendly and they are not about to let an upstart reduce their chances by even a percent of marketshare. My point is that it is not just about putting together great hardware and getting it built to hand to people who have the money. Then there is the FCC/UL and product liability insurance on and on.. I just don't see 16 million being the right number to make this happen.

Of course my arguments all fall to the wayside if we suddenly see an investment of 50-100 million dollars. That is a different ball game and it could happen. I am just saying without further investment there has to be another plan. That is why I am sticking to my Valve prediction. Frankly I hope I am right I cannot think of a better outcome nor can I think of anything more disruptive to the status quo that taking the brilliance of two great companies and putting them together as one. One product. One eco-system (Steam) and one channel to feed. It is f-ing brilliant.

Anyway--I love my rift and love what the team at Oculus have done. They started the ball rolling and I think if they have the right partner or a lot more capital they have a shot and making something truly wonderful happen. I think Valve is going up against Microsoft and Sony and they need something to define them. They need something that the big behemoth companies can't respond to with any kind of agility. Microsoft and Sony did not design their consoles with VR in mind. Perhaps Valve did...

Anyway--I share from my own general experience in no attempt to fight or call anyone a fool. I just have been in the computer business a long time and I think I see something that I find more exciting than Oculus going at it alone.

Anyone at Oculus reading this please also take no offense. I love what you are doing--I spend all my non work hours thinking about this stuff. I love the audacity to try and know that what I am saying has all been thought about and has been well considered. I just had an "aha" moment about what might be happening and wanted to share it with the group.

Truly wish you needed someone with my skill set.. I'd be back in California in a heartbeat.

MarkM
Level 2
Gosh.. I killed the thread... I have never gotten the last word!

DarkAkuma
Level 3
"MarkM" wrote:
Gosh.. I killed the thread... I have never gotten the last word!


or in this case, the last 943,157,836,572...
Project: Ocarina - The Legend of Zelda, Ocarina of Time in VR @DarkAkuma_ - Twitter http://darkakuma.z-net.us/ - My Blog http://www.z-net.us/ - SNES Online Gaming

Rosenklotz
Level 2
I think Valve is going to use Oculus Tech with their own branding and some minor changes in design. Considering the R&D it takes Oculus to develop their first consumer version I find it unlikely that Valve is going to develop a HMD all on their own. My bet is that there will be some kind of cooperation between Valve and Oculus, maybe a "VR Steam machine" that is optimized for VR and comes bundled with a HMD with Valve branding based on the original Oculus Rift + some killer Application / AAA Game. This could help making Steam machines big as well as contribute to Oculus` popularity.

The V1 of the Rift will also be sold seperatly for PC users, of course. Maybe there will be retail bundles with powerful Android Tablets too (because most tablets have an HDMI port and their power should be enough for VR Cinema and basic demos)

saviornt
Level 3
Market competition is a good thing. I hope that the big 3 get involved as well (Sony, Microsoft, and Ninetendo). With that being said, I hope that they have learned their lessons about STANDARDS and INTEROPERABILITY. I should be able to use any HMD on any platform. This is what will drive consumer "acceptance" into this new age at a faster rate than it would otherwise.
Current WIPs using Unreal Engine 4: Agrona - Tales of an Era: Medieval Fantasy MORPG