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.