Oculus Rift Buyout Leads To Torrent Of Anger On Kickstarter

[Tanklover]

I pretty much called this reaction, and as I said yesterday, the best solution is to simply pass on the "profit" at least in some small way to the original backers.

2.5 mill was collected, pay back 25 mill (10x the original investment) to the backers, and thank them for helping to get the project where it is today.

That still leaves a HUGE profit for the company, and would probably help prevent so many angry backers.

That is the right thing to do (and no, i'm not a backer).

It's not mandatory, nothing legally says they need to do it etc, but heck, due to the efforts of the backers, they just made freaking 2 BILLION dollars. Even if you only count the 400 million for now, you still would have a massive profit for every single employee....even if you tossed 25 mill to the backers as a thank you.

Doubt it'll happen, but it's what I would do.

Why on earth do they need to give the backers anything back? much less 10x as much as what they back them with?. That is beyond ridiculous, they promised nothing beyond what the kickstarter campaign said which I'm guessing was the headset or whatever, so why do they need to give anyone anything more. They sold the company, even if they had been bought for 19 billion like whatsapp did they still shouldn't give any of the backers a cent of that money. They weren't investors, they don't deserve a piece of the pie, they deserve what was advertised for the backers which is the headset, right? so that's what they get, buyout by facebook or not.

No one who backed them in kickstarter is entitled to a cent of that money, are you people crazy?.

As long as you get your headset I don't see what all the butthurt is about. I don't really care either way, I don't understand the fb hate even though I don't use fb but this could be a positive thing, fb has a lot of money so that's never a bad thing. I'm sure it will be fine for gaming and not fb games precisely, so shut your yap people.

 

[Scars Unseen]

You donate, and you are promised a thing.

That's the very definition of an investment. Donation is when you give WITHOUT expecting anything in return. If you chip in with your money on a bigger project and promised some kind of return, that's an investment. Oculus took the money of many individuals promising an indie developed, affordable VR gear. With selling the whole thing to Facebook, they've broken that promise.

It's like you give me money so I could build a big house, and in return for your money, I offer you the right to stay at that house whenever you want. Then when the house is almost complete, I sell the whole thing to a giant corporation. Now, I'm f@cking rich and you are stuck with a landlord who will paint all the rooms bright blue, install a PA system that will blare adverts 24/7 in every room and may or may not make you pay rent on top of that.

Nope.

The only thing that you are promised in return for your money is outlined in the tier that you pledge at. Kickstarter is very clear on that, and if that isn't okay with you, use your money for something else(like actual investment, which Kickstarter is not). As far as I'm aware, all Kickstarter pledges have been fulfilled, which means that Oculus doesn't owe anyone anything, as - once again - Kickstarter is not an investment platform.

 

[tacotrainwreck]

They will make it cheaper with what? Pop-up advertising? Sounds ridiculous, but I wouldn't put it past Facebook.

 

[Scars Unseen]

They will make it cheaper with what? Pop-up advertising? Sounds ridiculous, but I wouldn't put it past Facebook.

If they follow through with what they mentioned(sports event and classroom telepresence), then I could see them using the Rift as a loss leader in hopes of opening those and other new markets, possibly profiting off of licensing deals with sports leagues and/or universities. It's not that different an idea from what the console developers do with games. Naturally, they could go the Google route as well, making money off of ad-to-play games. But that would be more of a decision on the game developers end(whether to make your game ad supported or not) that Facebook would merely be in a position to profit off of.

There are a lot of ways to profit from this that don't involve mandatory pop-up ads like some resurgence of turn of the century era NetZero dial-up service. And even if that did turn out to be what we get, someone will just hack together some custom firmware that eliminates the ads anyway, so I still maintain that the hardware is all that matters here.

 

[misg]

Well I highly doubt I will be interested in buying Occulus rift now. In the hands of facebook is just so unappealing.

 

[SonOfVoorhees]

As long as the backers get what was promised to them depending on the tier of payment they payed, then there is nothing than can do. They got what they paid the money in for, they dont know a percentage of the company or any product thats made. Having said that i understand why people are annoyed, what was once an idea that only gamers believed in and backed financially, has now been bought by FB now that all the hard work has been completed.

 

[Kuala BangoDango]

Well of course they're pissed off about this deal. Why the hell did they bother paying up with their own cash if some mega-corp like Facebook is just going to come in with $400 million anyways? That literally defeats the entire purpose behind crowdfunding, and essentially means that everyone that backed the Oculus just pissed (x) amount of money away.

I don't see how you (and a lot of other people) come to that conclusion. No Kickstarter backing means no product, which means no buyout - you can't have one without the other. And do you really expect companies like Oculus to attenuate their success to a level you find successful? You want it to be a hit so your money isn't wasted on a failed, dead-end product, but not so much of a hit that it'll attract bigger players with money to throw around?

People on Kickstarter paid to support the development of the headset in exchange for set rewards, which they will receive. Nothing has changed. So why the anger?

Because for a lot of backers it's not just about the final product but also about helping the common man (woman) stand up to the mega-corporations and be successful without needing those mega-corporations. It's about cutting those large publishers, corporations, and rich executives completely out of the loop.

It's about having the little guy make a successful product, become big, and shake his fist in the face of the corporations and say, "See?! You didn't believe in me or my product. You didn't want to fund my ideas because you didn't believe there was enough profit in it for you! Well the people believed! They backed me and my ideas and look at me now! And YOU, Mr. CEO, get none of my success!"

So when that guy then turns around and sells out to those very same corporations it only further strengthens the idea that corporations eventually own everything and the backers are merely there to pay all the costs of the initial risk (which the corporation no longer has to pay) and get the Kickstarter guy a stronger position to barter from to ask for a higher selling price.

To look at another example...Star Citizen. Chris Roberts went to Kickstarter because no publisher wanted to risk investing in a space shooter. There was no "market" for it. So Chris wants to cut them out of the loop. The people pay for the game to be made and the Star Citizen devs, once the game is launched, are supposed to get all the profits themselves. Now imagine if EA came along and said, "Wow Chris! $50 Million paid by your backers. You were right. There IS a market for this game." And then EA gives Chris "an offer he can't refuse" which he accepts and now EA owns Star Citizen. The Development costs were paid by the people but the profits go to EA. Chris Roberts takes his EA money and runs and all the other developers who WERE part of something special are back to being owned by a publisher.

If it were only about the final product then there would be no need for all the Kickstarter tiers. Who in their right mind would pay $10,000 for a copy of Star Citizen when the $50 backers get that very same game? Sure the higher tiers get bonuses but there's no way in hell the bonuses are valued at $10k. Backers pay $10k because they believe in the cause and when the cause sells out to a mega-corporation then those $10k backers are left with a $50 product and $9,950 worth of now-tarnished bad-taste-in-your-mouth fluff and broken dreams.

 

[vagabondwillsmile]

Well of course they're pissed off about this deal. Why the hell did they bother paying up with their own cash if some mega-corp like Facebook is just going to come in with $400 million anyways? That literally defeats the entire purpose behind crowdfunding, and essentially means that everyone that backed the Oculus just pissed (x) amount of money away.

I don't see how you (and a lot of other people) come to that conclusion. No Kickstarter backing means no product, which means no buyout - you can't have one without the other. And do you really expect companies like Oculus to attenuate their success to a level you find successful? You want it to be a hit so your money isn't wasted on a failed, dead-end product, but not so much of a hit that it'll attract bigger players with money to throw around?

People on Kickstarter paid to support the development of the headset in exchange for set rewards, which they will receive. Nothing has changed. So why the anger?

The comment to which you are responding addresses just one of several sources of discontent with the aquisition. I would say the principal source of discontent is that the aquisition is indicative of a change in the preceived fundamental intended use of the device, from one of dedicated gaming (with the possibility of other industrial applications as well such as medicine) to one of social media. The developement team promoted the product on Kickstarter as the former. In light of the latter, pledgers believe themselves - and rightly so - to have been duped, that the product for which they invested money will no longer be the product promised to them at the time they invested. This is a legitimate concern, rather than arbitrary, baseless "anger". They feel additionally, that they, in the end, have unwittingly invested in Facebook's vision and Facebook's future, for which the device is now presumably a vehicle.

Consider shareholders who would overthrow a board of directors for taking a company in a direction different from what,in order to solicit their investments, was initially promised . The principal is the same.

 

[Vivi22]

I don't use facebook because they creep me out and I don't like to have their ads shoved in my face, and that's a free service. Why would I pay hundreds of dollars to enable them to shove ads in my face even more?

So glad I didn't fund this. I'd call Carmack a POS for selling out like this, but I'm pretty sure for 2 billion dollars I would have sold out to.

What makes you think John Carmack had anything to do with this?

He's not complaining about it https://twitter.com/ID_AA_Carmack so I assume he was ok with the deal. And his name being attached was certainly what led a lot of people to donate to the Kickstarter.

Honestly, as long as Carmack is working on tech he finds interesting I don't think he gives a shit about the business side of things.

 

[008Zulu_v1legacy]

The Oculus Rift Kickstarter page is being flooded with negative comments from backers unhappy about yesterday's acquisition by Facebook.

I still reckon this is just a build up for an April Fool's joke. They are having to become more elaborate and realistic in order to maintain the shock of the "gotcha!" moment.

 

[Kargathia]

People on Kickstarter paid to support the development of the headset in exchange for set rewards, which they will receive. Nothing has changed. So why the anger?

It appears that the anger stems from the sentiment that one backs a Kickstarter project not for goodies, but to enable the creation of something they want.

Facebook's general consumer-facing business practices are notorious in their own right, but there is also nothing being done at all - by either party - to assuage the fears of the Rift simply becoming a proprietary device, closed off from use by everything backers wanted to do with it.

And while legally these are some very uncharted waters, I really can't blame people for being upset that Facebook's interests just completely superceded the mission statement advertised on Kickstarter.

EDIT: It appears that Vagabondwillsmile ninja'd me in both timeliness and eloquence.

 

[Alterego-X]

People on Kickstarter paid to support the development of the headset in exchange for set rewards, which they will receive. Nothing has changed. So why the anger?

In fact, they have already received all rewards back in 2013. The Kickstarter was for the Devkit 1.

This is pretty much the equivalent of if Subset Games would be bought by a publisher right now, and the people who backed FTL wouldbe complaining about how their money is being misapplied.

 

[Alterego-X]

You donate, and you are promised a thing.

That's the very definition of an investment. Donation is when you give WITHOUT expecting anything in return. If you chip in with your money on a bigger project and promised some kind of return, that's an investment. Oculus took the money of many individuals promising an indie developed, affordable VR gear.

Yes, and it delivered all of those indie developed, affordable VR gear to the backers.

 

[Charli]

You donate, and you are promised a thing.

That's the very definition of an investment. Donation is when you give WITHOUT expecting anything in return. If you chip in with your money on a bigger project and promised some kind of return, that's an investment. Oculus took the money of many individuals promising an indie developed, affordable VR gear. With selling the whole thing to Facebook, they've broken that promise.

It's like you give me money so I could build a big house, and in return for your money, I offer you the right to stay at that house whenever you want. Then when the house is almost complete, I sell the whole thing to a giant corporation. Now, I'm f@cking rich and you are stuck with a landlord who will paint all the rooms bright blue, install a PA system that will blare adverts 24/7 in every room and may or may not make you pay rent on top of that.

It's not quite an investment in the eyes of law, an investment usually gives back monetary value, by the definitions of kick-starter, what you're donating first of all may still not come to you within reasonable circumstances, the crowd funded nature of it has to allow for that to happen or they'll run into all sorts of problematic litigation so it is still technically a fund, donated to. So it cannot be deemed by law an investment... and if people start demanding kickstarter become an investment corporation then...it'll be saddled with the same rules and regulations that others adhere to.

I was not aware they'd promised the project would remain indie and under their control, but if that is true then the loose agreement is indeed broken. But I haven't heard that from anyone so far, it seems like that was just a 'what we're aiming for' writ. Most of the 'we give money and you get', clauses are usually straightforward, you give X and we give you X thing, if nothing of that has been withdrawn I think those trying to back out are going to have a hard time with it.

The most they can do is plead that the project mislead buyers but even then nothing about the facebook purchase has so far changed the item in question, nothing has yet been implied.

 

[Fdzzaigl]

Oh my, what would Facebook be up to now...

Reading your personal info and tastes from your brain, or perhaps to sell your iris type directly to the NSA?

Paranoia aside though, no thanks.

 

[Hero of Lime]

If you want a return on your investment, go to the stock market. Did anyone seriously use Kickstarter with the intent that the person/company getting the funding has to bend to their every whim? Or,that there is a return on the investment. You donate money to help someone's cause or product development, Oculus Rift was made, and it looked attractive and was thus bought by a bigger company.

If it wasn't Facebook it would have been someone else people on the internet would whine about.

Also, anyone complaining about "sellouts" would not deny a two billion dollar offer either.

 

[wildstars]

To look at another example...Star Citizen. Chris Roberts went to Kickstarter because no publisher wanted to risk investing in a space shooter. There was no "market" for it. So Chris wants to cut them out of the loop. The people pay for the game to be made and the Star Citizen devs, once the game is launched, are supposed to get all the profits themselves. Now imagine if EA came along and said, "Wow Chris! $50 Million paid by your backers. You were right. There IS a market for this game." And then EA gives Chris "an offer he can't refuse" which he accepts and now EA owns Star Citizen. The Development costs were paid by the people but the profits go to EA. Chris Roberts takes his EA money and runs and all the other developers who WERE part of something special are back to being owned by a publisher.

This was my very first thought after hearing about the Facebook buyout of Oculus. While I've got emotional investment in the OR, I don't have any financial dog in that fight. I've got a couple hundred bucks into Star Citizen, as well as a lot of dreams. If EA gets their grubby mitts on Starcitzen, I'm never crowdfunding another thing.I was going to pre-order the next OR dev kit this week (I was holding out for 1080p and 6dof), but I think I'll wait now.

I feel sorry the employees at Oculus. I've worked at two different small local companys that did well enough to get bought out. Both times, the CEOs/Owners were sold the moon and the stars, but they didn't read the fine print. Those same CEOs and Owners parroted down the same BS to the employees. The CEOs/Owners ended up rich, shafted, and bitter. The employees? We just got shafted and bitter.

I learned a lot from those experiences. I learned that Newark, NJ is what Gotham would be like without Batman. More importantly, I learned that the moment I discover my employer is selling out, I need to find another job. Also, all the new people hired with that influx of cash from the buyout are the first to be let go.

 

[RJ 17]

Well of course they're pissed off about this deal. Why the hell did they bother paying up with their own cash if some mega-corp like Facebook is just going to come in with $400 million anyways? That literally defeats the entire purpose behind crowdfunding, and essentially means that everyone that backed the Oculus just pissed (x) amount of money away.

I don't see how you (and a lot of other people) come to that conclusion. No Kickstarter backing means no product, which means no buyout - you can't have one without the other. And do you really expect companies like Oculus to attenuate their success to a level you find successful? You want it to be a hit so your money isn't wasted on a failed, dead-end product, but not so much of a hit that it'll attract bigger players with money to throw around?

People on Kickstarter paid to support the development of the headset in exchange for set rewards, which they will receive. Nothing has changed. So why the anger?

For starters, I'm not angry. I didn't back this thing so I've got no dog in this fight, I was just pointing out that those that did back it have a right to be angry. It's all a matter of perspective, of course. But hey, you're the one that wrote the article, so you tell me why the people that backed this thing are getting all up in arms about it.

My theory is that it does make people feel like they wasted their money, though I do agree with you that without the Kickstarter to get the project off the ground in the first place then Facebook likely wouldn't have been interested in the first place. Still, once Facebook's money does get involved, I'd still imagine that those that did back the Kickstarter feel like they wasted their money since the project was bought (that is, now being funded) by Facebook making the Kickstarter a moot point at this point. Sure, they'll get some rewards, but isn't one of the points about doing a Kickstarter so you won't have to be dealing with big name companies in the first place? Or at least that you tried getting a big name company to fund your project and when that didn't work you decide to start up a Kickstarter?

 

[EyeReaper]

eh, I don't really care. I'm still going to buy an Oculus anyways. If this extra money improves the quality of the OR or gets it out faster, I'm not gonna complain. I find it kinda funny that people aren't angry over OR selling out, but selling out to facebook specifically, as if they sold out to someone else it would be better or something.
At least, that's how I read it.