WHY FACEBOOK BUYING OCCULUS RIFT IS A BAD THING FOR GAMERS, AND ULTIMATELY, FOR VR TECHNOLOGY

Yesterday afternoon the Internet was rocked by the announcement that Facebook has acquired Occulus, the gamer’s VR darling startup, for $2 billion. At first, I, like many others, thought it was a joke, one of those bogus posts that people put on Google+ during a slow workday, or some clickbait article from some douchey gaming blog. I even thought for a millisecond that it might be an April Fools’ gag, though April Fool’s Day was still several days away. However, as I quickly double-checked and triple-checked, and finally confirmed the news as true, several emotions rushed right through my mind: anger, betrayal, and finally sadness. Many gamers felt those very emotions, from the comments on gaming blogs and social media sites, and the Occulus/Facebook damage control PR machine went into full overdrive, with a statement from Mark Zuckenberg, Mr. Facebook himself, with assurances from Occulus founders Palmer Luickey Brendan Iribe that this would be good for the company and for gaming, and with comments posted by “professional PR operatives” attempting to counteract the upsurge of negative reaction to the news. The gist of the damage control “message” was that gamers were paranoid and overreacting, that Occulus would remain independent, and that this would be good for gaming.

Don’t believe it for a second. It’s all bad.

First, there’s the issue with Facebook and Zuckenberg’s track record. After the news of the deal became public, Minecraft creator Notch made a public statement to the effect that he was canceling all Minecraft development for the Occulus Rift. Apparently he had been working with the Occulus people, and had been to his offices as recently as last week, and he was never told of any impending acquisition. He further stated that he did not contribute $10,000 of his own money as early seed capital for Occulus, only for the founders to turn around and quickly sell the company to Facebook for a windfall. I’m guessing Notch is echoing the feelings of many of Occulus’ early backers there. He also stated that Facebook’s intentions are unclear, and that they “give him the creeps.” He’s also echoing the feelings of most gamers with that one as well. After all, isn’t Zuckenberg that screwed everybody over, including his partner and best friend, in order to make Facebook a success? Did you read/watch “The Social Network”? Do we really think he’ll let Occulus operate independently for very long?

There is only one thing Zuckenberg/Facebook are interested in with the Occulus purchase: public perception and shoring up the Facebook share price. It’s no secret that Facebook has had trouble monetizing the site, despite its giant popularity. Facebook was late to mobile, and all its initiatives there have crashed and burned. (Does anyone remember the HTC or Motorola Facebook smartphones?) In the past year, Facebook has launched into an acquisition spree (from Instagram to WhatsApp) , in order to give the investors and the public at large that Facebook is a growing, thriving business that’s keeping with the latest technological developments/trends. Now that mobile is stagnant (and mobile companies are betting on those silly wearables as the next big thing… but that’sa topic for another day), the next big things in tech are AR (Augmented Reality) and VR (Virtual Reality.) AR belongs to Google, with its Glass technology (which will be huge, mark my words.) But VR is still a nascent technology, with the most publicized efforts being those of Kickstarter statup Occulus and Sony’s Project Morpheus. By buying Occulus, Facebook gets to say that it’s at the forefront of VR technology, which will be parroted by know-nothing financial analysts and reporters. Facebook is cool and edgy again.

So Occulus gets much needed capita out of the deal. How can that be bad? Well, like I said before, the money has strings attached. Facebook’s corporate tendrils will begin to probe insinuate into Occulus, and will destroy the young company. Maybe it will begin with an ambitious suit, initially sent as a liaison. Then more suits will follow. Pretty soon they’ll have those hapless occulus employess filing TPS Reports in triplicate, and the talent will head out the door (beginning with John Carmack.)

And those $2 billion will attract hucksters and con-men to VR, just like what happened with Kickstarter when it first went big.  Expect a lot of VR startups with big promises scamming investors out of their cash, with little to show for it.  The technology will get a bad rep before it’s even ready.

Then there’s the company culture… remember Star Trek’s Prime Directive, about non-interference with less developed cultures? Occulus was a startup, and it needed to remain a startup for a few more years. Startups achieve great things – look at HP, Apple, Google. Would they have achieved what they did without the pressure to succeed? This deal erases all that. Occulus is now Facebooks kept, well-fed pet. The pressure to succeed and achieve is off, gone. Nothing to see here, folks, these are not the droids we’re looking for, moving on to Sony and Project Occulus, move along.

This is all that went through my mind yesterday when I read the news. Today? I just feel sadness… for what could have been.

Is Sony’s Gaming Business in Trouble Despite the PS4’s Successful Launch?

We know that Sony’s Electronics and Entertainment divisions are hemorrhaging money.  But is Sony’s gaming business in trouble too?

This question sound like utter nonsense at first … after all, the Playstation is selling like gangbusters in North America and Europe, eclipsing even Sony’s 5 million unit sales target for the current fiscal year.

However, there are some signs that all is not rosy inside Sony right now.  Worrying signs.

First, there’s the announcement that Jack Trenton, CEO of Sony Computer Entertainment America was leaving the company.  Jack Trenton has been an integral part of Sony’s PlayStation business since 1995.  He’s been a very public face of the gaming side of the company, handling keynotes at E3. He’s well-liked by gamers and the gaming press.  His sudden departure will remain a mystery for now (thank gag clauses in contracts for that) but it certainly doesn’t look good, especially after the successful PS4 launch.

The second worrisome signs are key departures at Sony’s internal game development studios, which are key to the PS4’s long-term success.  There were substantial layoffs at Sony’s Santa Monica studios, developers of the God of War series.  There was also the departure of Amy Hennig, one of the developers of the Uncharted series.  Even more troubling is the departure of Jamie Griesemer from Sucker Punch, lead designer of “Infamous:  Second Son”, the PS4’s first-party exclusive crown jewel.  When devs start leaving the roost it means there’s trouble, or little faith in the company’s future.

Finally there’s the PS4’s collapsing sales in Japan.  My Gamestop source attributes the rapidly slowing sales of the console over there to “xenophobia”, and there’s certainly an element of that.  Sony making Mark Cerny the public face of the PS4 did not help matters, or its generic internal PC hardware.  But the main problem is that game developers in Japan haven’t warmed to the PS4.  They’re happily developing games for mobile platforms, which costs them less and makes them more money.  Everyone over there wants to make the next Monster Hunter or the next Puzzle & Dragons.  Whatever console development remains over here is focused on the PS3, which is still selling and has the JRPGs and dating sims that Japanese gamers crave.

So what will Sony do?  It has one advantage:  its CEO, Katz Hirai, is a games guy.  He understands the business, and what his customers wants.  If anyone can overcome all these challenges (draining talent pool, finding success in Japan) it’s him.

THE HONEYMOON IS OVER FOR THE PS4 IN JAPAN

The PlayStation 4 launched in Japan on 2/22/2014 and sold 322,083 units in its first week, an excellent début for the darling of the next-generation console wars. However, the numbers for the second week of Japanese PS4 sales have come in, and it seems that system will have trouble having the same success in its homeland of Japan as it has enjoyed in the West. The PS4 sold just 65,685 in its second week over there, a monstrous drop from its first-week sales, and the worst second-week sales performance for any console in recent memory. For comparison purposes,, the Nintendo Wii U, a system widely derided and mocked by the media as a failure, sold 160,653 units in its second week in Japan. Curiously, the same games and mainstream media that blasted and mocked the Wii Unsure not reporting or commenting on these disappointing and troubling PS4 numbers.

So what does this mean for the PS4? Several things. First, it seems that the system will have to battle a perception of it being a “gaijin” or foreign console to gain mass acceptance in its homeland of Japan, a country whose people are notoriously finicky about buying foreign electronic products (except Apple stuff.) The second thing is deeply related to the first: the PS4 needs to get developer mineshaft, so that it can get the JRPGs and visual novels, hunting games and dating sims and other quirky Japanese game genres that the Japanese gamers love. Those are the type of games that drive console sales over there, and the PS3 has them, as does the Nintendo 3DS and the iOS and Android mobile devices. However, these are the very same revs that view the PS4 as a gaijin system, or just a glorified PC. Japan also took its sweet time getting comfortable with HD game development on the PS3, and many devs are not inclined to develop on the PS4’s x86 hardware, unless Sony provides, development assistance and incentives.

 

Is it time to hit the panic button? Are consoles dead in Japan? Not yet, but the PS4s honeymoon is clearly over, and Sony’s got their work cut out for them.