Tag Archive: HMD

Why Sell Out? Oculus -> Facebook

A lot of people are fuming over today’s announcement that Facebook would be buying Palmer Luckey’s Oculus. Palmer and company produced two mainstream marketed development kit head mounted displays which became darlings of the grassroots VR/Gamer community. Starting with Kickstarter, Oculus, channeled through Palmer’s and later John Carmack’s charisma and a hacker friendly attitude, built a loyal and vocal user base, one that championed the ethos of open source and quasi-community development.

Tonight, there’s a lot of disappointment and vitrol that Oculus has abandoned the community, and worse yet (from their perspective), sold out to the Devil incarnate. How could Palmer, who just announced the deal on Reddit, have turned his back on the admiring crowds? Who would have thought the Oculus enthusiasts could be turned into a howling mob in the course of a single afternoon?

Were they betrayed? And by who?

It’s easy to forget that Oculus funding didn’t end with Kickstarter. There’s the Venture Capitalists. Unlike the Kickstarter money-for-prototype funding, the VCs were getting equity, board seats, and a preferential position in the decision making process. VCs don’t take major stakes unless they receive major control of their target.

So when Oculus was offered $400m in cash plus $1.6B in Facebook stock (plus another $300m incentive bonus), was Palmer really making that call alone? After multiple VC funding rounds and stock incentives to key employees, Palmer must have relatively small minority stake in Oculus, although even so the deal involves a considerable sum for him. But a minority share and non-preferred stock means that his vote is in no way decisive… the Venture Capitalists, led by Andreessen Horowitz, make the big time financial decisions. They invest based on their strategic relationships with potential buyers like Facebook (Andreessen sits on the board of Facebook… no small thing.)

It’s only natural that the VCs would push hard for the deal. Inasmuch as Oculus never really had a strategy to rake in 9 figure profits cash on the barrel at huge multiples of their original investment, what’s an investor to do? Let’s hypothetically (and generously) say that there would have been a 50% chance that Oculus could generate $2B in profits (or other liquid value) within the next 4 years. If the investors were to allow Oculus to remain independent they’d be giving up a certain $2B right now, in exchange for a potential payout down the road. How big would that payout need to be? Well…, in this make-believe scenario the investors are essentially deferring their $2B as a high risk loan. They should then receive interest payments on their loan (the time value of money.) But when you risk other-peoples’-money you must pay the vig. Let’s assume 20% per year (that’s low… I promise!) So… discounting for the 50% risk and the vig, the VCs need more than $5B in profit on the future bet. That significantly decreases their (50%) chance of success.

Time to take the money and run!

Does that make Palmer Luckey the bad guy? No, it just makes him the guy who took the VC money without realizing that control had also been surrendered. This is a dance that occurs with every venture capital deal; the term sheets have the control clauses permanently etched.

Is the Facebook deal a bad thing? Good thing? Oculus developed technically well conceived and implemented head mounted displays. The VR displays are/were wildly popular with a community of up to 75,000, doubtless enhanced by the ultra-low $300 price tag. They would need to sell tens of millions of units at this price point in order to realize anything like the $2B Facebook offer. Realistically, the price point needed to be double (or triple) in order to have margins comparable to normal consumer electronic gear. I don’t see them achieving millions of units sold at $600-$900/unit. Pundits have suggested other unspecified, service based, revenue streams. Lacking the clout of a Facebook/Google sized borg, I don’t feel like they could ever reach a critical mass capable of bringing in $5B+ in value (other than equity.)

While the Facebook ethic is the nightmare scenario for the highly independent Oculus community, their alternatives were limited. VCs always rely on the profitability of equity not of product. What will FB do with Oculus? Unknown. But if the Oculus product never makes a single cent, it nonetheless will not die an ugly and horrible cash flow strangulation death; what would certainly have been their fate absent being made part of the borg.


The Great Bubble

2013 has brought much excitement to the VR world, especially the perception of great breakthroughs in Head Mounted Display products. Can we take a deep breath, then hold up a distant mirror to the cautionary history of VR from 1993-1998. Back then there also was a fever pitch of excitement as companies pitched great breakthroughs, attracted outsize investments from private and public markets, and yet, the best of them crashed and burned, taking their investors, customers, and vendors down with them.

I invite you to review this chronological collection of VR news reports beginning with the fire sale of VPL’s much vaunted patent portfolio. The reports follow the rise and fall of three VR industry giants: Virtuality, IO Systems, and Superscape. I present these as examples, but they’re not alone. Very few VR firms escaped the 90’s. Sadly the VR bubble burst long before the late 90’s tech bubble burst. It wasn’t the economy – stupid!

Does history repeat itself?

View PDF

Vintage VR-4 Head Mounted Display Teardown

Here’s a much more detailed tear down of the Virtual Research VR-4 Head Mounted Display, done by one of the engineers at VR sometime in 1994. He shows us how to remove the back light inverter and the main PCB.

‘Scuse the vintage VHS EP mode recording. I was trying to save on video tape costs; a 6 hour tape cost $1.50!

Digital VR Rehab

For years, therapists would attempt to treat smokers and alcoholics using real-life triggers. Let addicts see a lighter or an empty bottle, or even a photo of something smoking or drinking related, to trigger cravings, then teach them coping strategies. It was limited because patients could tell they were in a lab and their new found coping skills were not always transferrable to the real world. Enter Virtual Reality:

The theory being that the immersive VR world better approximates the real world, allowing better skills transference and allowing researchers to easily AB test different scenarios. A pilot program at Duke run by assistant professor Zach Rosenthal with funding from the National Institute on Drug Abuse and the Department of Defense has already run about 90 people through this VR rehab trial. No formal conclusions have been reached, but preliminary data suggests effectiveness. More reading here.

Awesome VR Optics for 1″ Class Displays At Less Than Ten Dollars!

Professional wide field of view Virtual Reality optics for less than the price of a couple of double lattes! A while back I demonstrated a design for Leep On The Cheap, a proof of concept for wide field of view optics on 3″ to 4″ display panels. Trouble was… there was quite a bit of distortion and chromatic aberration. However, it sparked quite a bit of thought and development in the VR DIY community. They’re the ones doing all the heavy lifting.

32mm Erfle Eyepiece

32mm Erfle Eyepiece

So… it’s time to come back with another optical design for wide field of view VR, but this time the optical qualities are first rate and remarkably inexpensive. Of course there are a new set of trade-offs: field of view is limited to about 65 deg. (not bad, but not totally immersive), and I rely on somewhat smaller display panels, about 1″ to 1.5″ diagonal. This is roughly the same as the: Nvision Datavisor LCD, Visette Pro, and Virtual Research VR4/V6/V8.

This design, and many commercial versions, rely a the unique characteristic of telescope eyepieces: that they can be directly used as HMD optics without modification. Even better, they’re made in fairly large quantity, with a large selection of optical characteristics and quality, and somebody else has already solved the issues of distortion, chromatic aberration, internal reflections, coatings, and aspheric design. Did I mention that they’re inexpensive. The sweet spot are either Erfle or Plossl designs; Erfle offers wider field of view. Even wider fields can be achieved with variations on the Nagler design, but the weight becomes prohibitively high.

It’s easier to give the tour by video… viddy this my droogies:

Lens sources:

30mm fl Erfle from Surplus Shed – $9.50

32mm fl Erfle from Surplus Shed – $12.50

I’ll leave you hanging re: the LCD panel. The one in the video shown above was torn from a Virtual Research V6; low res, old school.

More info on eyepieces:


Common Telescope Eyepiece Designs


Platypus Headsets?

The Science Channel interviews Jaron Lanier who shows off some wide field of view headsets from the late 80’s. Jaron feels like a platypus when wearing one of these JumboTrons. The narrator’s conclusion (and Jaron’s as well): The state of the art in VR hasn’t progressed too much further.

(A tip of the hat to Aphradonis over at mtbs3d.com for finding this little gem!)


Seeing the Eye in a New Light

There’s been an enormous resurgence of DIY HMDs in the VR hacker community recently, some quite impressive. Understanding how the eye works is the key to these inventions. I found a really instructive 70 year old nugget which gives HMD designers the real lowdown. All the way from 1941 to you….

If you find this video a little advanced (it really isn’t), check out part 1 of the same series: