Oculus Rift Buyout Leads To Torrent Of Anger On Kickstarter

[Amir Kondori]

Those people ran the risk when they Kickstarted Oculus Rift in the first place. They're entitled to their opinions (vapid as they are), but it's best to leave the actual creative and business decisions to the people who know what they're talking about.

See that Reddit thread with Palmer Luckey trying to reason with complainers by making valid points from an informed position and getting only "YOU SOLD OUT!" and "FACEBOOK IS THE EVIL!" in response.

You call them valid points, others would say he was just trying to justify the sellout. Sellout is exactly what it was, literally. He sold the company. Usually the people whose money you used to build that company would get a cut, but because he used Kickstarter he gets ALL that money himself, split among whoever is a stakeholder at Oculus.
Backers have every right to be mad as hell about it.

^^this.

I'm kinda surprised this crowdfunding fad lasted as long as it did. I mean, it's friggin common sense! I jolt down some grandiose ideas and asks total strangers to finance my fever-dream, promising only some knick-knack, a place in the "special thanks" section or a skype call/dinner with majestic me. If I do succeed in the campaign and actually produce something worthwhile, I get to keep all the patents, copyrights and profits for myself. All that without investing a single dollar of my own. If the campaign doesn't succeed, the backers get their money back and nobody lost anything. If the campaign succeeds and I fail to produce anything worth a damn, whatever, right? It wasn't my money, what do I care. I just shove out whatever unfinished crap I managed to cobble together and call it a day (Dark Matter anyone?).

Or, I can do what Oculus did, and sell my company for the worth of a small country's entire GDP, buy an island and live like a king for the rest of my life. There is literally no way campaigners can lose with crowdfunding. Sure, they might need to endure some moaning and thrash talk when things go south, but that's kinda small price to pay considering the return.

Crowdfunding is not a fad and it is not over. Crowdfunding is here to stay, it is only getting bigger. People are not upset that they backed Oculus, I think most of the backers have been excited about the dev kit and the up coming second dev kit. They are upset that their money was used to build a company with a $2 billion exit plan after the co-founder said that was not going to happen. They are upset because the Facebook buyout will, inevitable, in the long term shift the focus of Oculus.

Crowdfuning itself has much more going for it than against it. I think it is telling that many more crowdfunded projects get completed than don't. That shows me a system that is working.

 

[JLF]

I find it weird that people are getting so upset with the Oculus Rift team when they are doing that, what anyone else would have done if they would have been in their shoes. Two billion for a company.

I would be more pissed at Facebook for using their influence to "ruin" a great independent company's dream. (Ruin = changing it to fit their agenda)

But I don't see any fault in backers hoping that the Oculus Team would pay back the money they got from their backers when they hit it big. 250,000 dollars is a small amount when you got 400 million in cash and 1.6 billion in stocks.

But that's just my opinion.

 

[Playbahnosh]

Crowdfunding is not a fad and it is not over. Crowdfunding is here to stay, it is only getting bigger. People are not upset that they backed Oculus, I think most of the backers have been excited about the dev kit and the up coming second dev kit. They are upset that their money was used to build a company with a $2 billion exit plan after the co-founder said that was not going to happen. They are upset because the Facebook buyout will, inevitable, in the long term shift the focus of Oculus.

Crowdfuning itself has much more going for it than against it. I think it is telling that many more crowdfunded projects get completed than don't. That shows me a system that is working.

Read what I wrote again. I said Crowdfunding does work flawlessly for the campaigners. It's basically online panhandling with a fancy name, zero risk, and none of the shame associated with it. It is a bubble, and if things like this Oculus-Facebook fiasco keep happening, it will burst sooner than you think. Indeed the backers are upset because the Oculus people did what they straight up promised they wouldn't do. And they are apparently getting away with it scot free and 2 billion richer. Who's gonna call them to account? Nobody. What's stopping other campaigners from not doing the exact same thing? If anything, this thing created precedence and showed not-so-honest predatory money people, that you can go from 0 to filthy rich with exactly no investment on your part. How long before people with even half viable technologies and ideas start to flood the platform looking straight for a fat buyout riding on the money of strangers? The only ones with anything to lose are the backers. But they get their signed poster and place in the "special thanks" for their $200, right?

 

[ThunderCavalier]

Part of me sees why they did this from an economical standpoint.

... But seriously, you'd have to be fucking stupid not to realize the backlash you'd get from marketing a hardcore gaming hardware like this and then suddenly having it being sold to Facebook, where casual games go to die.

My only hopes is that the end product is still awesome, but we're not sure if FB bought this merely to get a cut of the profits or to utterly pollute the system.

 

[Kameburger]

Oh well.

All aboard the Morpheus train!

Yes, let's all get hyped for the cheap knock-off VR headset that runs on closed platform with inferior specs.

Well the indie open one just got a 'please sign into facebook to proceed button' literally forced into your sensory system, so in comparison, the Sony version might not be so bad in comparison... I certainly like the PlayStation logo, a lot more then I like the idea of Facebook winning in its slow strategy to eventually physically tunnel into my brain...

 

[Karthak]

Part of me sees why they did this from an economical standpoint.

... But seriously, you'd have to be fucking stupid not to realize the backlash you'd get from marketing a hardcore gaming hardware like this and then suddenly having it being sold to Facebook, where casual games go to die.

Isn't the backlash a complete and total lightweight compared to 2 billion dollars?

 

[Amir Kondori]

Crowdfunding is not a fad and it is not over. Crowdfunding is here to stay, it is only getting bigger. People are not upset that they backed Oculus, I think most of the backers have been excited about the dev kit and the up coming second dev kit. They are upset that their money was used to build a company with a $2 billion exit plan after the co-founder said that was not going to happen. They are upset because the Facebook buyout will, inevitable, in the long term shift the focus of Oculus.

Crowdfuning itself has much more going for it than against it. I think it is telling that many more crowdfunded projects get completed than don't. That shows me a system that is working.

Read what I wrote again. I said Crowdfunding does work flawlessly for the campaigners. It's basically online panhandling with a fancy name, zero risk, and none of the shame associated with it. It is a bubble, and if things like this Oculus-Facebook fiasco keep happening, it will burst sooner than you think. Indeed the backers are upset because the Oculus people did what they straight up promised they wouldn't do. And they are apparently getting away with it scot free and 2 billion richer. Who's gonna call them to account? Nobody. What's stopping other campaigners from not doing the exact same thing? If anything, this thing created precedence and showed not-so-honest predatory money people, that you can go from 0 to filthy rich with exactly no investment on your part. How long before people with even half viable technologies and ideas start to flood the platform looking straight for a fat buyout riding on the money of strangers? The only ones with anything to lose are the backers. But they get their signed poster and place in the "special thanks" for their $200, right?

First of all nothing illegal was done, just something distasteful. It is far more common for a Kickstarter project work out than not work out, and Kickstarted projects are mostly products, not companies. There have been a lot of successes for crowdfunding, just off the top of my head I can think of The Banner Saga, Broken Age, the Pebble smartwatch, the OUYA, HiddenRadio, and many, many more projects that have been funded, created, and shipped.

If you look at the numbers crowdfunding is growing, and growing at an accelerated rate. I know you think it is a "bubble" but I disagree. There are just too many opportunities to help bring to market things that speak to you personally for crowdfunding to die as a funding model.

 

[FalloutJack]

Part of me sees why they did this from an economical standpoint.

... But seriously, you'd have to be fucking stupid not to realize the backlash you'd get from marketing a hardcore gaming hardware like this and then suddenly having it being sold to Facebook, where casual games go to die.

Isn't the backlash a complete and total lightweight compared to 2 billion dollars?

You haven't been reading what public opinion's done to people these days. Big companies have been bleeding rather profusely for the error of their ways lately. A bad product coupled with a poor choice of words and unwanted business practices has done more damage in recent times - I think - than ever before in a company's history. I think Microsoft will live, but I don't think ones like EA will ever recover. Facebook being a social media site, as in dependent upon society, stands to take a REALLY bad hit if this tanks, or if it ever turns into something shitty later. How many people are there on Facebook, I wonder? Enough to make you damn scared if they're ever displeased? Dunno.

 

[ThunderCavalier]

Isn't the backlash a complete and total lightweight compared to 2 billion dollars?

Ever hear of PR Nightmare?

You could get the entire US Military Budget behind a project, but if the Internet collectively hates your guts, you're fucked either way. Despite what anyone may say, Bad Word of Mouth still exists and there is no better way to drive your project into the dirt than to kill off your core fanbase and any tangentially related customers. FB and Gaming do not have a very good relationship, so this very well might be a death knell for any hope of this being a dedicated gaming machine unless it, like, gives us a HD Final Fantasy VII or something.

 

[Clifford Beasley]

Kickstarter seems less to me about being a backer or investor and more of an artificial way to feel like you are part of something. Now people that backed the OR are upset that they aren't in a little club of their own. Now not all of them will feel this way. Some really do feel betrayed and what not. They way a lot of them are yelling childishly though seem to put them in the first camp.

I'm surprised by how few people in this thread are upset about Zuckerburg said he's wants to use it. This thing is going to be rebranded to something like the Facebook Face2Face. Oculus Rift is too Sci-fi for a Facebook addict to buy. The gaming aspect already seems to be put on the back burner. I can already see the in-your-face button asking if you want to add a Face2Face to your account. You will have a glorified Mii that will have your profile picture stretched onto it's head. Everyone will meet in some sort of virtual mall where you can go to virtual stores to play virtual Farmville or whatever other fad game there is.

All in all, a fancy (and very niche) piece of tech has been turned into something it was never intended to be. Some people want to burn someone like a witch because they made a profit off of crowdfunding. Some people want to cry like a baby because they don't feel like they are part of something anymore. Some are happy about potential new ways the tech can be used. Some don't care. What makes this different from any other thing that happens in life? Opinions are opinions and the individual only has so much sway over what happens in the world. Yawn and walk away to the next thing you have no control over.

 

[Andy Chalk]

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.

And you get the copy of Star Citizen you were promised when you pledged. This is how Kickstarter works, and has always worked. Anyone who thinks otherwise has a fundamental misunderstanding of the system.

You might also bear in mind that Roberts started the Star Citizen Kickstarter not to make the game, but to raise enough money to convince "real" investors to take over. From the Kickstarter page:

"We have investors that have agreed to contribute the balance we need to complete this game as long as we can validate that there is a demand for a high end PC space game. By meeting or surpassing our target on Kickstarter you tell the world that you want a PC based Space Sim and allow us to make this game."

In other words, Roberts said right up front that he wanted to do exactly what Oculus VR did: Get enough money from Kickstarter backers to attract serious money from elsewhere to get the product across the finish line.

Is Chris Roberts the bad guy now too?

 

[Andy Chalk]

So I think you are unfairly de-legitimizing their anger. Though I personally have no bone in this fight, I will never throw my money around as a donation to a company.

Then don't Kickstart things. (Which I think would be good advice for a lot of people in this thread.) If you Kickstart a product, you presumably want it to succeed; if it succeeds on any kind of meaningful scale, especially if it's something legitimately new and groundbreaking like the OR, it will likely be subject to a big-money acquisition attempt at some point. And the nature of business is that if someone offers you $2 billion for your fledgling startup, you take it. Being surprised or angered by that outcome is silly, because it's precisely the outcome you're rooting for when you toss your money in the hat. (I was surprised that it was Facebook and by the value of the buyout, but not that it happened.)

 

[maxben]

So I think you are unfairly de-legitimizing their anger. Though I personally have no bone in this fight, I will never throw my money around as a donation to a company.

Then don't Kickstart things. (Which I think would be good advice for a lot of people in this thread.) If you Kickstart a product, you presumably want it to succeed; if it succeeds on any kind of meaningful scale, especially if it's something legitimately new and groundbreaking like the OR, it will likely be subject to a big-money acquisition attempt at some point. And the nature of business is that if someone offers you $2 billion for your fledgling startup, you take it. Being surprised or angered by that outcome is silly, because it's precisely the outcome you're rooting for when you toss your money in the hat. (I was surprised that it was Facebook and by the value of the buyout, but not that it happened.)

But that is what I was saying, when people Kickstart things they do it for very complex and often idealized reasons. To dilute their thoughts and emotions into "they want it to succeed in any way shape or form" is to misunderstand the impulse of a lot of them unfairly. You are right, this is how business works, but you are wrong to assume that individuals who Kickstart are a) aware of this or b) believe that this is how it will/should turn out.

Imagine for example if Notch wasn't Notch and he ended up selling Minecraft to EA, how would gamers feel about that what with Minecraft's "Indie" cred? Or similarly, your favourite Indie band which you supported in its infancy joins a major label, how many people would feel betrayed and how many would be happy? It's a similar situation. When you pay or support a product, you have certain assumptions about it that may be wrong and irrational but they are what motivates you. As I mentioned, many people who Kickstart would never have been motivated to do so if they did not believe irrationally that it means that the product would remain indie forever.

And then we go to the main problem. You say that they shouldn't Kickstart, and many of them won't after these kinds of examples, which will actually mean the massive decline of crowdsourced funding at the end of the day. Though, on the other hand, it may create a very powerful niche competitor aimed specifically for the indie crowd with unique rules that appeal to the indie developers and indie-minded contributors.

Sorry for going on a little bit of a tangent, these kinds of economic problems based on the "irrational" consumer are quite interesting to me.

 

[Kuala BangoDango]

...

And you get the copy of Star Citizen you were promised when you pledged. This is how Kickstarter works, and has always worked. Anyone who thinks otherwise has a fundamental misunderstanding of the system.

You might also bear in mind that Roberts started the Star Citizen Kickstarter not to make the game, but to raise enough money to convince "real" investors to take over. From the Kickstarter page:

"We have investors that have agreed to contribute the balance we need to complete this game as long as we can validate that there is a demand for a high end PC space game. By meeting or surpassing our target on Kickstarter you tell the world that you want a PC based Space Sim and allow us to make this game."

In other words, Roberts said right up front that he wanted to do exactly what Oculus VR did: Get enough money from Kickstarter backers to attract serious money from elsewhere to get the product across the finish line.

Is Chris Roberts the bad guy now too?

Chris Roberts is definitely not the bad guy. I'm not even using his real scenario but rather a "what if" scenario based on Star Citizen (being the most successful crowd-funded example till now) selling their entire game/company to one of the big dogs. There is a difference, too, between Chris looking for investors to help fund his ideas and looking to actually be entirely bought out. Furthermore, once Chris saw he earned enough from backers and didn't need investors anymore he dropped the idea of investors entirely from his plans.

And so you are correct. While legally (well, if there even IS any sort of legal status to crowdfunding) any backers who pay are officially just buying copies of the game with tier-appropriate fluff there is unofficially more to it. If it were only about buying the product then why are there so many willing to pay more than the product is worth, ie. higher tiers? If it's about making sure the product gets made then why are there so many still paying even after the product has hit the "we now have enough to make it" amount?

And if crowdfunding is only about the product earning enough to attract further investors or buyouts then shouldn't we call it something else? The Oculus Rift wasn't actually complete when it got bought out. Does it deserve to be called "Crowdfunded"? Shouldn't we call it "Crowdstarted" instead? After all, Facebook has taken over funding it now and at $2 Billion to start they're funding it for a lot more than the "Crowd" ever did. "Crowdstarted but Corporatefunded"?

Anyway, my post wasn't trying to say what's right or wrong. Heck, I'd most likely take the money too especially if I got to keep working on the project. My post was merely trying to explain why so many were angry about the situation. Many backers weren't investing in a product, they were investing in an indie start-up. They certainly weren't, knowingly, paying for all the initial risks so that one of the richest, most profitable, corporations in the world could reap the reward.

 

[Andy Chalk]

The bottom line is that idealism has a way of running up against reality in ways that go far beyond Kickstarter. I do get that people might feel a gut reaction against the idea of their "indie hero" willingly becoming part of the machine, but that's the way it goes. Especially, I think, when you're dealing with a company that's actually manufacturing a product rather than developing software; the need for production facilities, supply lines, inventory management and all the other fun stuff that goes hand-in-hand with creating and selling a physical product makes long-term and large-scale financial support far more necessary than indie game development.

The only part about all this that kinda chaps my ass is Notch's cancellation of Oculus Minecraft. He of all people should know that this is how business goes, but while a lot of people support him (and I think a lot of people would stand behind him if he took a two-week vacation to go seal-clubbing in Newfoundland) I'm inclined to agree with CliffyB: I think he's come out of this looking like a petulant child having a temper tantrum.

 

[Karadalis]

Or maybe.. just maybe... Notch doesnt want to make a minecraft that is bogged down by facebook shenanigans or has to comform to facebook standards or wants facebook adds in minecraft?

All those game companies that say that they will make their games OR compatible will get a nice letter from facebook sooner or later dictating that their games should be facebook compatible. And then we will see how much support will be left from game developers.

Facebook didnt bought OR because they plan to make it a game peripheral, they are solely interested in the tech to expand their social network and earn money through that.. because you know.. thats their thing, thats what makes them billions of dollars every year. Games will be an afterthought.. the social network will be the main thing and focus of development.

And people didnt kickstarted a social network VR tool.. they crowdfunded a gaming peripheral. Facebook can now do whatever the hell they please with it and im pretty sure they care more about selfie posting teens then gamers. Sure they might say they wont interfere and have a "hands off aproach"

But you know who also has a "hands off policy" when they buy companies? EA... and they are as hands offish as a cleptomaniac