'Oculus Rift isn't going to sell billions in 2016 - and that's okay'

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For 18 months, there have been a lot of exciting developments for VR.

Facebook purchased Oculus for $2bn, while Sony was getting involved in this new space with Project Morpheus. And Valve announced it had partnered up with HTC for its first Valve VR headset, the Vive.

But in recent months, the mood surrounding VR has been slightly dampened. We have Network CEO Neil Young predicting a ‘VR collapse' as companies rush into the sector before it hits the mass market, while Frontier's David Braben urges caution towards the new tech. Furthermore, development veteran Warren Spector went as far as to call VR a fad.

But Oculus boss Brendan Iribe says that the dream hasn't died; rather, the reality has set in.

VR is the Holy Grail – it's the Holodeck,” he says. For a lot of enthusiasts like ourselves, that moment of sensation occurred during the first two years of Oculus' Kickstarter where everyone was excited about VR and saying ‘Oh my God, it's finally here'.

Then it's: ‘Okay, it's going to be here and it's going to ship. Now where are we really? It's going to work, but how? What is this? Who is this for?' You're not going to get a billion people on Oculus Rift when we ship in 2016. You are going to get hopefully millions, and that's okay. But we have come down from the initial sensation to focus on the reality and on making this an incredible experience. You buy it, you have to love it, you have to want to go back into it every day, you want to show your friends and then they want to buy it and they want to go back into it.

That domino will start to fall in 2016. It's going to be very excited. MCV has seen [Oculus' control input] Touch and the Toy Box tech demo. Most of the world hasn't seen that. They've seen maybe [older version] DK2, probably only DK1. This new Rift is a huge leap. And it's really where VR starts. The world is about to see that in 2016 – it's going to be very exciting.

Then every year or so they are going to see another leap. Not necessarily in consumer VR, but we will have at least a new prototype for a new consumer product almost every year. You are going to see new kit and tech coming at a very rapid pace. There's more to come.”

For all its pioneering ideas around new technology, it's clear that Oculus is a very grounded company. Iribe's expectations of Oculus Rift's sales are an indication of this. Another is the firm's partnership with Microsoft, which it announced just before E3. While Oculus has developed its own Touch controller (pictured top right), this is a new device that developers haven't had much experience with. But its Microsoft deal – which sees every Oculus Rift headset ship with an Xbox One pad – will help studios familiar with this controller.

Developers haven't had Touch yet. They haven't been able to work with Touch for years like they have the Gamepad,” Iribe explains. If we were going to go out there and deliver an input device for Rift, bundled in by default that everyone could depend on at launch, that's the Gamepad. We asked ourselves whether we could make a better Gamepad than Xbox's. Maybe, but wouldn't we be better served focusing on the future of VR input than trying to make a better Xbox One controller? And I'm not sure if we even could because it's awfully good and it has had decades of refinement, hundreds of millions of dollars of investment.

We felt we should bundle that in, get a great strong partnership with Microsoft so that we can ensure Windows 10 support out of the box is incredibly good. It really brought us together with Microsoft and also started to get some of the little Xbox bits over to Oculus. You start to see some of that streaming where you can stream the Xbox One console to our virtual cinema.

It's not the Holy Grail of VR, but it is a pretty cool use case – a virtual desktop, a virtual monitor, a virtual theatre over time is going to be a popular experience for VR. Imagine you can 3D reconstruct the room you are in and put an IMAX cinema right in your room and it's hi-res.”

However, Iribe adds, Oculus' Touch controller will eventually replace the Xbox One pad.

There's not going to be as much content on Touch at launch as there is on the Gamepad, but there's going to be more and more. Then you'll see in later generations of Rift there'll be bundled packages and things like that where Touch starts to be the main focus.”

Outside of Sony and Ubisoft, few big publishers are backing virtual reality. When we've asked EA or Take-Two about the technology, the standard answer has been: ‘We'll wait and see'. A lot of the scepticism around VR's potential is due to this hesitation, but Iribe is not concerned.

It's natural. Look at how long it took the big publishers to show up for mobile,” he says. By the time they got there they realised that if they were going to be successful they needed to acquire somebody for an awfully large amount of money. That was okay. That's not necessarily the wrong way to go about it, it's just what worked for them. It took them a long time to enter the mobile arena and there were hundreds of millions of smartphone users and it still took them a while.

What's unique about virtual reality is that inside of these publishers, the developers and the creators all want to make VR games. They want to be a part of virtual reality. This is why they got into gaming. You have this internal desire to build VR that just didn't exist on mobile.

You didn't have developers inside of EA banging down the executives' doors saying: ‘We just want to make a mobile game. That's the Holy Grail, that's what we want to do'. But they are saying that for VR.

Having that momentum internally means you'll see a lot of experiences show up over time. There's exactly zero consumer VR products shipping today. It's still early, everyone still needs to remind themselves.

Consumer VR hasn't started yet, it starts in 2016.”

FACEBOOK POWER

There are similarities between Oculus Rift – and any VR tech - and Nintendo's Wii.

The Rift, much like the Wii, is an entirely new concept that requires consumers to try the new tech to really understand them.

We want to get Rift to as many people as possible,” Oculus boss Brendan Iribe tells MCV.

We also want to make sure it's to the right people. We don't want to sell Rift to the wrong people who don't really know what they are getting themselves into. This is still the early generation of VR, it's the first generation of consumer virtual reality. You should know what kind of product you are buying.

And we want to try to do the best job possible at conveying that, at marketing that to the right people. We feel we've done a good job with the developer kits, maybe setting the expectation, marketing those to the right people. So we're going to be focusing our marketing efforts on really identifying and attracting the right consumers to Rift for PC VR and Gear for mobile virtual reality.

And it's great that with Facebook's backing we actually do have a marketing budget. As a start-up our marketing budget would have been much smaller. It's great to have its resources – we are hundreds of more people, we are goin

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