At the 2012 SXSW Interactive, Bruce Sterling commented on the emergence of “stacks” during his closing remarks. These stacks are: Facebook, Google, Amazon, Microsoft and Apple. They’re corporations that are competing not just in business, but as ecosystems for the digital world we live in. Notice lately how they’ve been spending a lot of money? Google bought Nest for $3.2 billion. Microsoft bought Nokia for $7.2 billion. Facebook bought Instagram for $1 billion. Now they’ve bought Oculus VR for $2 billion.
These acquisitions are where the stacks think the future of our ecosystems lie. What techie hasn’t considered submerging into virtual reality since Neal Stephenson’s “Snow Crash” or even “Back To the Future 2?” In his announcement, Mark Zuckerberg cites virtual education and medical practice as reasons for buying Oculus. Whether these VR goggles end up being our port into the Matrix or not, there’s one man’s enthusiasm behind their recent success.
Palmer Luckey was only a child in the nineties, when arcades were sporting clunky VR headsets. His dad’s a car salesman. His mother stayed at home and home-schooled him near Irvine, California. He grew up wanting to be a tech journalist and describes himself as a “self-taught engineer, a hacker, a maker, (and) an electronics enthusiast.” At 14, he was taking courses at a community college. At 15 he started a forum called ModRetro that focused on modifying vintage gaming consoles. He started flipping repaired iPhones for thousands of dollars in his teens. Eventually he moved onto old VR systems, buying them from government auctions for significantly less than their original price. He tinkered with them until he realized they didn’t live up to his expectations.
So he made his own.
Luckey took the parts from his VR collection and Frankensteined them together into his own prototypes. He started working at the University of Southern California as an engineer in their Mixed Reality lab and attended classes at California State University Long Beach. He dropped out when there was an enthusiastic response from the tech community to his VR headset, the Oculus Rift. He began a Kickstarter campaign to fund further development. When John Carmack (programmer/designer for video game hits “Doom” and “Quake”) started praising Luckey in public, the campaign heated up and raised $2.5 million.
Luckey founded the Oculus VR company and hired accomplished tech professionals as his CEO and chief software architect. They focused on shipping developer kits to programmers… and raising $16 million in private funding. At the 2014 D.I.C.E. Summit, Luckey claimed that virtual reality will surpass the resolution of the human eye in the next five years. He also wants to get VR hardware down to the size of a set of prescription eyeglasses.
Then on Tuesday, March 24, Facebook swept in and bought the whole shebang. Many Kickstarter backers were furious. Luckey says he started getting death threats that extended to family. He said he understands the customer frustration, but that a $75 million investment with Andreessen Horowitz had already ceded control of the company. His hope is that Facebook will be able to produce the device at a lower cost for consumers, to “make the world a more connected place.”
Time will tell if Facebook’s investment will play out how Zuckerberg and Luckey expect it to. But make no mistake, the stacks were already looking for real estate in the next digital ecosystem. Now the vultures are going to be circling over the other virtual reality territories out there.