Why Oculus is paying for Rift exclusives instead of developing them itself

When I spoke with Oculus VR CEO Brendan Iribe at Gamescom earlier this month, one of the first things we wound up talking about was the concern that, by funding the development of Rift-exclusive games, Oculus is potentially stifling the marketplace for VR games before it really has a chance to flourish. 

Last month company founder Palmer Luckey took to Reddit to try and assuage that concern, and at Gamescom Iribe further described the arrangement as a sort of second-party affair where Oculus funds external development of Rift-exclusive games through its Oculus Studios division.

"It's one-and-a-half party, or second-party really, where we're shouldering all of the investment of developing a game as though it were our own," said Iribe. "We're even, in many cases, bringing game ideas to developers and saying 'hey, would you want to do either of these?'"

This seems to be a bit of a departure from Oculus Studios' founding mission, laid out by division chief Jason Rubin when he joined Oculus last summer as "building high-quality VR content that helps define the platform and inspire[s] others to do the same."

At the time it sounded as though Oculus was looking to spend Facebook's money on beefing up its own internal game development efforts by buying up talented developers or even whole studios, but Iribe now tells me it didn't quite work out that way.

"We've grown a lot, and if we acquired studios we'd be growing even faster, headcount-wise," he said. "Over time we may go and grow a first-party set of studios; we kick it around, we talk about the idea. It's just not where we want to focus the growth of the headcount right now."

Instead, the company wound up using Oculus Studios to cut exclusive development deals with the likes of Insomniac, High Voltage, Gunfire Games and other teams. Iribe took pains to lay these deals out as win-win for the developers involved: Oculus pays for the cost of development, and the developer gets to keep ownership of the intellectual property they've created, potentially freeing them to make other games based on it for platforms besides the Rift.

"Instead of setting up internal studios, we put together this Oculus Studios group that funds external teams as though they're internal teams," said Iribe. "We're funding them so they can get into VR."

While Iribe wouldn't disclose any specifics of these funding arrangements, he did point out that Oculus is paying for games it expects to be Rift-exclusive  ("Content made specifically for the Rift, that's the goal") and designed to take advantage of the Rift's idiosyncracies, most notably its Touch motion controllers. For more on how those controllers are being designed to be a core component of Oculus' game design philosophy going forward, check out our full interview with Iribe on the topic.