Future of Film: Why Oculus Rift Was Worth $2B to Facebook

This story first appeared in the Sept. 12 issue of The Hollywood Reporter magazine.

When Palmer Luckey, then just 18, began tinkering with ideas for a virtual reality headset in his parents’ garage in Long Beach, Calif., in 2011, movies provided part of his inspiration. “He was inspired by the idea of stepping inside a game and experiencing a virtual world, sort of like you’ve seen in the movies, like in The Matrix,” says Nate Mitchell, who — along with Luckey, CEO Brendan Iribe and chief software architect Michael Antonov — is one of the founders of Oculus VR, the company, headquartered in Irvine, Calif., that quickly grew out of Luckey’s first efforts.

“In that same vein, when we started the company, we had a major focus on games. What has happened over the course of the past few years, we’ve come to realize that VR isn’t just about games, but VR is a completely new creature. It really starts to open up a lot of new possibilities. A big part of that has been the interest from film and storytellers, experimenting with what narrative storytelling looks like in VR.”

Those possibilities were enough to convince Facebook to close a deal in July to buy Oculus for $2 billion. And though no dates have been announced, by the end of 2015, the Oculus Rift headset as well as one from Sony’s competing Project Morpheus are expected to hit the consumer market.

The question is what content will be available. Eugene Chung, hired by Oculus to serve as its director of film and media, predicts that VR storytelling will be “a revolutionary departure from the moving pictures of today.” To begin to picture that future, Oculus has created an application called Oculus Cinema that allows users wearing the headset to experience sitting in a virtual movie theater as they watch an existing movie play on a screen in front of them. “It helps bridge the gap for people who don’t understand what VR is in a really familiar way,” says Mitchell. “I showed it to my father, who’s a real movie buff, and he was blown away and said, ‘It’s like having an Imax movie theater in your house!’ ”

There are other intermediate steps before Hollywood embraces virtual reality’s full storytelling potential. Studios such as Fox are looking at how VR can be used as a marketing device for mainstream movies. At this summer’s Comic-Con, Legendary, whose founder Thomas Tull has invested in Oculus, offered a demonstration that allowed headset-wearers to pilot the Jaeger robot suits from Pacific Rim.

Further down the road, Mitchell predicts, VR “movies” could resemble the interactive theater of today, where, instead of sitting and watching a story unfold onstage, audiences follow actors from room to room, deciding for themselves which plotline interests them.

“VR can bridge the gap between games and films. Games have been incredibly interactive but lacking in terms of story. Films can be powerful in terms of stories,” he says. “We’re going to see all sorts of combinations of the two. We’re just trying to get a handle on what makes sense, what’s interesting and what’s fun.”

Read more from The Hollywood Reporter’s “Future of Film” special report:

Studios Will Have to Take Their Cues From TV Networks

Producers Opt for Foreign Talent, Far-Flung Locations to Boost Box Office

Even Bigger Screens and, Yep, Cinema Selfies

4 Experts Predict How Moviegoing Will Change in 10 Years

VFX Legend Douglas Trumbull’s Plan to Save the Movies