Content has almost always sold hardware in the video game industry. Look at all of the exclusive content for Nintendo consoles. Or how many people bought XBox's for the sole purpose of playing Halo.
Sure, most VR hardware options may technically be peripherals for PCs, but at a cost of several hundred dollars or more, it isn't in the same category as PC mouses or joysticks. The way I see it, VR hardware is essentially a standalone device that connects to PCs, simply so that many people won't need to buy that too, saving them $1k-2k.
Creating exclusive games and buying exclusive content licensing/distribution rights for any gaming platform, especially ones in stiff competition for early adopters and the lion's share of a new market, is a great business decision. If Oculus hadn't secured exclusive content, people would have simply bought whichever hardware worked better, or shipped first. In this case, most people would have likely bought the Vive. Oculus knew that superior content is the tie-breaker and can even overshadow slight technological shortcomings, if they exist.
Oculus should never have reversed their plans to keep the content exclusive. Now, many people will just buy Vives and use them to play Oculus-subsidized content. Oculus could have created a great monopoly. Now I suspect they will have serious difficulty building a sustainable business. Peter Thiel is on Facebook's board and Marc Andreessen is on both Facebook's and Oculus's board. I can't imagine either one would support reversing the decision to make exclusive content.
- hardware exclusives may be a better business model, but consumers (at least a vocal subset) clearly don't like them
- Microsoft seems to be moving towards having all Xbox games run on pc so console exclusives may be on their last legs
- the vr market is relatively tiny, so splitting it up with exclusives will make it harder for devs to justify making content
- game margins are much higher than vr hardware, and do it may be better to have store exclusives rather than hardware (something steam is doing without the backlash)
-Early adopters take considerable risk when buying new hardware. If the market ends up crowning a different system king, your options are:
Accept that objectively/subjectively superior technology isn’t the only thing driving sales and adoption.
Or be a sore loser (which I’m not admonishing; VR tech is expensive) and complain loudly on message boards.
-I doubt that what Microsoft chooses to do with Xbox games in the future is due to regret or guilt about past decisions regarding exclusive content. Halo served them quite well at the height of the console wars.
-If I’m a dev making VR content and I am doing it to make a living, not just to make something cool to show my friends or as a fun project, my dream is that a VR hardware manufacturer pays a premium for exclusive rights. The hardware manufacturers can currently afford to pay more for exclusive content than they can hope to actually earn from the content, simply to drive hardware sales and platform adoption. I suspect it will be rough for developers, especially small teams, that are unable to negotiate exclusive deals. They will need to optimize and maintain their content for multiple platforms. And what can they hope to earn? <50,000 units in the wild, ~$25 per title Without an exclusive deal, it looks a lot like the movie industry. You either make a hit and do well, do really bad an move on, or worse, you do kind of okay, and then feel obligated to maintain the games and support the few that bought your game for the next few years.
-Exclusive content makes sense for many businesses. Doing it flawlessly, without causing potentially debilitating PR backlash is clearly easier said than done.
VR is effectively a better monitor. The cutting edge monitors also go for hundreds of dollars. Do you agree that monitors should also have proprietary ports that refuse to play non-licensed games or content?
I think your argument is a great defense for whichever VR company ultimately secures a near-monopoly on this market. “Your Honor, my company is really just a fancy monitor company. We are actually in close competition with dozens of monitor and television manufacturers. We don’t have anything close to a monopoly.”
Again, I don’t believe VR hardware is in the same category as most PC peripherals, including monitors. The hardware could easily be marketed as a standalone system if the more traditional PC hardware was put into a pretty box and sold with it. The system would just cost $1k-2k more and few would be able to afford it.
If I was a traditional monitor manufacturer and I created some kind of magical new content for traditional monitor viewing that people would be willing to buy a new monitor to experience, I would definitely try to make it exclusive. Though I’m not sure the best way to do that would be a proprietary port.
"Creating exclusive games and buying exclusive content licensing/distribution rights for any gaming platform, especially ones in stiff competition for early adopters and the lion's share of a new market, is a great business decision. If Oculus hadn't secured exclusive content, people would have simply bought whichever hardware worked better, or shipped first."
Good for Oculus, but as you point out, bad for consumers who might prefer another vendor's possibly superior hardware.
I don't really understand the motivation behind excoriating companies for taking indisputably pro-consumer actions. Pointing out the potential concerns is one thing, but you seem to be genuinely annoyed that Oculus has chosen not to act like jerks in this matter. Do you have Facebook stock? Are you playing devil's advocate?
I do not own Facebook stock, HTC stock, or any other stock associated with VR tech. Also, I do not own any VR systems or have any current plans to buy one.
I was just surprised at Oculus’s reversal. It seemed to be a generally bad business decision for Oculus, as well as a loss for VR developers. Certainly, this is a victory for HTC and other VR hardware competitors. It is also a short-term victory for non-Oculus VR hardware owners. They now get access to some existing content without having to buy a new system. But longer-term, if developers are less motivated to work in the VR space with no hope of negotiating a exclusive contract, I’m not sure the decision is such an indisputable victory for consumers.
I think sergiosgc's thoughts are on the right track "Dividing the market would definitely cause prospective consumers to wait for market stabilization. It is a risk bigger than the risk posed by competitors.” Oculus clearly saw some other risk as being greater than that posed by competitors. But I’m not sure risk of dividing the market or slow market growth are what Oculus was worried about. Dividing the market and slower market growth are both certainly better (for a business) than your competitor getting the majority of the market, which seems much more likely now.
Also, I understood why Vive owners/loyalists would be upset by Oculus-exclusive content. Haters gonna hate. But it didn’t make sense why the VR community in general would be upset. Seanp2k2 mentions in a comment further down “broke promises about DRM”. I am not familiar enough with this controversy to confirm or disconfirm such promises, but if Oculus explicitly promised that they would not prevent their content from being used with other hardware, then breaking those promises would certainly be a risky move. The outrage would at least seem more justified. My guess is that this was the risk that was greater than the risk posed by competitors, and that Oculus underestimated it.
> Sure, most VR hardware options may technically be peripherals for PCs, but at a cost of several hundred dollars or more, it isn't in the same category as PC mouses or joysticks.
But in exactly the same segment as video cards, and you won't see too many games publishers stupid enough to refuse to run their games on unapproved video cards.
There's actually a large exclusivity-style fight going on in the GPU world. It's not as bad as the console style exclusivity but when you develop a major game you often have to choose whether you invite Nvidia or AMD into the process. They'll frequently pay money and/or provide you with advanced middleware technology, resulting in games that perform much much better on the chosen vendor's GPU's. There are even features that are specifically designed to perform horribly on the other vendor's cards, making them de-facto exclusive. Usually it's unimportant stuff like special stuff like Hair simulation but Cloth simulation or advanced shading can feel like real differences in fidelity.
The PC gaming market is different from the console market. PC gamers spend a lot more on their hardware, and in return ask for platform openness and very long backwards compatibility.
Dividing the market would definitely cause prospective consumers to wait for market stabilization. It is a risk bigger than the risk posed by competitors.
Sure, most VR hardware options may technically be peripherals for PCs, but at a cost of several hundred dollars or more, it isn't in the same category as PC mouses or joysticks. The way I see it, VR hardware is essentially a standalone device that connects to PCs, simply so that many people won't need to buy that too, saving them $1k-2k.
Creating exclusive games and buying exclusive content licensing/distribution rights for any gaming platform, especially ones in stiff competition for early adopters and the lion's share of a new market, is a great business decision. If Oculus hadn't secured exclusive content, people would have simply bought whichever hardware worked better, or shipped first. In this case, most people would have likely bought the Vive. Oculus knew that superior content is the tie-breaker and can even overshadow slight technological shortcomings, if they exist.
Oculus should never have reversed their plans to keep the content exclusive. Now, many people will just buy Vives and use them to play Oculus-subsidized content. Oculus could have created a great monopoly. Now I suspect they will have serious difficulty building a sustainable business. Peter Thiel is on Facebook's board and Marc Andreessen is on both Facebook's and Oculus's board. I can't imagine either one would support reversing the decision to make exclusive content.