A company that was conceived less than a year ago today
announced its Series B round of funding late last night, with a massive raise
of $75 million to add to its existing $16 million Series A and $2.4 million in
Kickstarter crowdfunding dollars. That company is Oculus Rift: A virtual
reality headset dreamt up by Gaikai veteran Brendan Iribe and a team of other
startup vets. With nearly $100 million invested, expectations are huge, but the
company is ready to meet those expectations, Iribe tells TechCrunch, and exceed
them with a vision of the future that blurs the line between the virtual and
the real.
Why So Much Money, So Fast
The Rift has already managed to sell over 42,000 units prior
to its consumer launch, via development kits that are admittedly rough around
the edges, according to Iribe. That’s impressive enough, but it’s not what’s
selling investors like Marc Andreessen and game industry legends like John
Carmack on the Rift – that’s the experience provided by the next-generation
prototype, which is functionally the same as what we’ll see from the first
consumer device, Iribe says, but which has been used by only a few hundred
people at most as of right now.
Once the new prototype was perfected, Iribe got in touch
with Marc Andreessen and Chris Dixon, to say that they’d achieved what they’d
set out to do and asked how soon they could come in to see it. The combination
of the prototype demonstration, and former id founder and Doom creator John
Carmack explaining his vision of where he sees the entire Oculus project headed
“pretty much convinced them on the spot,” Iribe tells me. Dixon and Andreessen
join the fairly limited group of outside VCs with ownership stake in Oculus VR,
and Iribe says that the partners and funding were chosen specifically with the
intent that they should help them get to through the initial V1 consumer launch
without having to go find more money elsewhere.
“The point of the first raise was to build out the
technology,” Iribe says, explaining what the money has been spent on so far.
“We actually thought it would take us a bit longer to get to the point of where
we’re at now.”
But it didn’t take that long. The new Oculus Rift prototype
should be virtually identical in terms of experience to the version that ships
to consumers.
Achievement Unlocked: Consumer-Caliber Experience
“We got to the point where the latest prototype of this
technology really is beyond even what we expected for V1,” Iribe told me. “We
kind of put the hammer down and said ‘Okay, this is it, this is definitely
enough to totally blow away the world and deliver our consumer, V1 product.’
We’re looking back even now on the dev kit and going ‘oh gosh, this new one is
so much better.’ It is literally an entirely different experience.’”
“Of the 300 people who have seen the current prototype, not
a single person has come away not saying ‘That’s gonna change the world,’ and
that’s really [what we needed to accomplish] in terms of delivering on the
promise of the vision we’ve all had for so many years,” Iribe says.
There’s a general feeling that it’s a true ‘Holy Grail’
experience in terms of immersive reality tech among those who’ve tried the
latest prototype, Iribe says. I asked if I’d be able to see for myself at CES
coming up in January, but he says they’re not ready to announce yet what
they’re bringing to the show, and we’ll find out closer to the date. Not to
read too much into it, but that does sound pretty promising for those hoping to
get a sense of this new design in action. The latest hardware still isn’t close
to final in terms of product design, however, Iribe adds:
“It’s what we want to bring as an experience,” he said.
“It’s a prototype, so it still has its circuit boards and exposed wires and all
that, but the experience, meaning once you put the device on, it is what we
want to deliver in a consumer product. People go in, spend long periods of time
in the experience and come out and say ‘I want to do more of that.’ There’s no
kind of discomfort, no dizziness, no nausea. So many of the technical hurdles
have been pretty much nailed.”
Vision In The Near-Term: Both Literal And Figurative
As for things they’re still working on the engineering side,
Iribe says that there’s an increasing interest in building more advanced eye
movement detection to the Rift’s functionality.
“[We recently hired] a lot of vision guys, that’s a big
effort for us now,” he says. “We’re really focusing on the vision side, in
terms of tracking and using optical tracking and camera tracking. That’s going
to be a big focus for us going forward. Over time, we want to get more of the
body in the game, but right now we’re trying to get your eyes in the game,
combining your vision with your head tracking.”
Aside from engineering work, there’s a lot that needs to be
nailed down in the immediate future. There’s figuring out how to consumerize
the actual product design itself, and then ramping up the initial production
run. That’s why Iribe isn’t putting a firm date on the Rift’s availability date
just yet: internally, they have a pretty good idea of when to expect it to
reach retailers and customers, but they’re purposely keeping tight-lipped about
those projections to make sure everything’s ready when the time comes. To that
end, they’re also hiring smart people aggressively in virtually every capacity,
as there’s not just a hardware and software component to the Rift, but
services, an ecosystem, a consumer education initiative and much, much more
that all need to come together at launch.
Carmack Codes And Codes And Codes To Avoid A Deflating
Launch
Hardware startups, especially those dealing with novel input
paradigms or wearable computing, have been multiplying sharply in the past
couple of years, and recently we’ve seen a number that were initially
crowdfunded via pre-orders deliver their shipping consumer devices. The results
aren’t pretty: while some like the Pebble have been fairly well-received
(though not universally loved), others like the Leap Motion and the Ouya have
sounded a sour note. Iribe admits that potential fate is a little daunting, but
believes that Oculus is doing everything right to avoid the same kind of crash
at the gate.
“John Carmack is writing code as fast as he can, travelling
as little as he can,” he said. “I think he’s back to the early days of kind of
a Doom and Quake era of him being held up in a room just programming as fast as
he can to make this work really well, and he tells me having more fun than he’s
had in a really long time.”
That likely explains why his dual roles at both Oculus and
id didn’t last long, as he stepped down from the original home of Doom and
Quake late last month to focus on being Oculus VR’s CTO full-time. Carmack is
doing what he loves most at Oculus, according to Iribe, which is tackling a
difficult problem that’s “right on the edge of reality.” Carmack pioneered both
2D and 3D gaming, and he’s doing the same thing all over again with the Oculus
Rift, and it “really works,” Iribe says.
Acquisition Potential, Valuation And Launch Sales Estimates
Along with launch date and Carmack project specifics, Oculus
is also keeping mum on valuation. Essentially, Iribe very loosely suggested a
20 to 40 percent equity sale at this stage for a startup like Oculus VR, which
would put the valuation somewhere between $200 and $400 million or so, with the
heavy caveat that this is mostly educated guessing on my part and not data
sourced direct from the company.
“The valuation wasn’t so high that [our investors] were
getting a tiny sliver, we had a pretty good valuation at each round [...] that
was fair for everybody,” was the only thing Iribe would say for sure on the
matter. “It’s good, but not too crazy.”
That valuation is high enough that any prospects of Oculus
Rift getting scooped up by Microsoft, Sony or any other major incumbent gaming
company is slim to none, Iribe says, at least until after they deliver their
initial run of consumer devices. He also says that personally, the idea of
having built what they have and not releasing it themselves just seems
impossible.
“We feel like we have a pretty good idea of what we can sell
through pre-orders, and through consumer launch, for the first six, eight or even
twelve months,” Iribe explains regarding their budgeting and the amount raised,
and why they don’t anticipate having to find more capital pre-launch.
Extrapolating from comments he made to me, I’d suggest they’re looking
somewhere in the neighborhood of one million devices for a production run
funded by what’s in their existing coffers, though Iribe declined to get into
specifics. He did say that they see that expanding to hundreds of millions of
devices and active users sometime in the next decade or so, thanks to the
long-term Oculus vision of VR beyond the confines of gaming.
Immersed In The Big Picture
What we’re looking at is the evolution of virtual reality,
starting with this headset. It’s going to be a little bigger than we’d all want
it to be of course, and it will have its form factor challenges, but the
experience inside is good enough that people are going to really enjoy it, and
love going in, playing games and watching movies. And then it’ll quickly
evolve, and its form factor will keep getting better; closer and closer to
sunglasses, lighter and easier to wear. Very quickly, over the next decade or
two, what we’re looking at really becomes about communications.
Just like the smartphone now represents the primary means
with which we communicate digitally, Iribe sees a future where VR supplants a
lot of the same usage, so that you have a pair of sunglass-style Rift goggles
that you simply slip on when you want to talk face-to-face, as if in person,
with your friend halfway around the world. Our kids will laugh at stories of
typing away on virtual keyboards and smiling back at grainy video into the
unblinking eye of a monitor-mounted webcam, and remote business won’t be so
remote anymore. In short, Oculus is taking the first step towards a world where
the “virtual” in virtual reality is just a technical distinction, not a
description of experience.
No comments:
Post a Comment