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Facebook's Oculus Rift Premiers, The Next Big Thing in Virtual Reality?

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Virtual Reality (VR) gaming company Oculus officially premiered its newest device, the Oculus Rift, yesterday at special press event in San Francisco. In March of last year, the company was purchased by Facebook (FB - Free Report) for an impressive $2 billion. Since its purchase, Oculus has been one of the most recognizable names in the virtual reality market. This pre-E3 announcement by the company is an important one for consumers. Therefore, let’s explore what is currently known about the Oculus Rift.



Figure 1: The Oculus Rift - Photo from James Martin via CNET

Release Date and Price Point

Sadly, neither the release date nor the exact cost of the Oculus Rift was established yesterday at the presser. The only details provided were the final consumer version of the Oculus Rift will be available in first quarter of 2016 and both CNET.com and Wired.com report the price of roughly $1,500 for the headset and a PC with the capabilities to run the system, though the specifics of what hardware can run the hardware was not mention either.

Relationship with Microsoft

The partnership between Microsoft (MSFT - Free Report) and Facebook/Oculus is an important one. Firstly, the headset will be bundled with a standard Xbox One wireless controller. Secondly, gamers will be able to stream Xbox One games directly to the Oculus Rift headset via Windows 10’s Xbox streaming functionality; Windows 10 will be released at the end of July.

According to the previously mentioned CNET.com report, this partnership is essentially a “stopgap” to allow game developers to create games specifically for the Oculus Rift, as well as allow Oculus to further develop their own wireless hand controllers, Oculus Touch, which allow users to perform more realistic and natural hand motions and gestures.

Games Being Released

The game to be released for the Oculus Rift with the most buzz surrounding it is EVE Valkyrie from CCP Games. The gameplay footage from the released trailer simply looks stunning. Also noted in the cited CNET.com article is that “games for the Oculus Rift will be developed on platforms like Unity and Unreal Engine 4, and a wide array of game studios are getting on board.”

Gamers can also “expect upcoming titles from heavy-hitters like Insomniac, Harmonix and Square Enix.” Furthermore, Oculus has invested more than $10 million to accelerate game development from independent software companies.

Competition

The Oculus Rift does not have the VR headset market all to itself. The four most notable VR headsets are Sony’s (SNE - Free Report) Project Morpheus, Google’s (GOOGL - Free Report) Cardboard, HTC and Value’s HTC Vive, and Samsung’s Gear VR, which runs Oculus software. However, excluding the Project Morpheus, the other three VR headsets are used to bring one’s mobile device into the virtual reality world.

A New Rift in the Gaming Lithosphere?

Unfortunately, due to not having an exact release date, a definitive price, what hardware is needed to fun its software, or projected sales figures, it would be ill-advised to determine the potential success or failure of the Oculus Rift or even its effect on Facebook’s shares.

From what is known, the Oculus Rift’s projected release date is after the 2015 holiday season, which may affect the number of units sold, especially with the current $1,500 price tag. However, the price may be lower than anticipated due to the number of VR headsets entering the market.

The concept of gamers stepping into another 3-dimentional world is the next gaming frontier that will be conquered, and Oculus may the company that leads the exploration.

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