The logo for Oculus VR's new in-house film studio

If it sounds like Story Studio is the beginning stage of Oculus VR pivoting away from a focus on gaming, that's because it's partly true. Iribe admits that without a solid input solution for VR, there's still more work to be done to perfect the gaming genre and get it consumer-ready. As the technology currently stands, the viewer's main entry point and point of control in the VR space is Oculus' headset. Given that, he says that a near-term shift to entertainment makes sense for the company.

"We were starting to make these experiences ... that felt a lot more like cinematic experiences than they did video games. And I think a lot of that is because we don't have VR input," says Iribe.

"The camera needs to be locked to your head. Your head movement needs to move the camera absolutely perfectly in sync," Iribe explains of Oculus VR's entertainment epiphany. "You need it all to work as close to human vision as possible. And the closer you get, the more comfortable it is. Suddenly, this caused us to rethink gaming as what we're after. And as we were rethinking it and we're making these demos, we were starting to make these experiences ... that felt a lot more like cinematic experiences than they did video games. And I think a lot of that is because we don't have VR input."

Despite that lack of a control scheme, Iribe and Unseld hinted that Lost would allow for an unprecedented level of interactivity between the viewer and CG characters based on environmental triggers. And the experience, it seems, won't have a finite length either, as the duration of these viewer interactions will determine the short's length. "I think it's about four minutes," says Unseld. "But the interesting thing is, it changes. There is no real fixed length. Like some people experience it and for them it's much longer. And some people go through it really fast. The way that it's structured is that it adapts to the way you go through it."

A promotional poster for Oculus Story Studio's first animated short, 'Lost.'

Iribe wouldn't specify the number of Oculus VR staffers dedicated to working within Story Studio, but concedes it's "a small group of former Pixar, Industrial Light and Magic and gaming [developers] that have done cinematic experiences." Regardless, the internal group's DNA is plain to see considering its output will be entirely CGI-based. When I asked if Story Studio was essentially Oculus' version of a VR-focused Pixar, Unseld welcomed the comparison, but also stressed that the decision to go full CG is "not a style choice. It's a tool choice."

"With VR, there isn't a perfect 3D capture device yet," Iribe says. "In fully animated CG, we can give characters AI ... you know, behaviors. And we can program them to do things that feel natural and interact."

That stylistic decision also stems from the technical constraints involved in filming live-action VR. Iribe credits VR artists like Félix and Paul, and Chris Milk for pioneering work in that vein using real-world environments and actors, but explains that those works are hampered by insufficient camera tech. "With VR, there isn't a perfect 3D capture device yet," he says. "That capture device technology is going to take a while. In fully animated CG, we can give characters AI ... you know, behaviors. And we can program them to do things that feel natural and interact."

It's all a matter of seamlessly interacting in a one-to-one manner within the VR environment. Unseld says that, for now, CG is the way forward for VR films as it allows for full freedom of motion in the VR space. "That's the biggest problem of live-action VR, is that it's a fixed position you're in," he says. "If you take a step to the left, nothing changes. ... That difference in immersion is enormous. And if you film something with a camera, you can't do that."

Robot concept character art from 'Lost.'

For its part, Oculus VR isn't necessarily interested in creating the equipment needed to capture live action in VR as the solution is "not at all obvious." Instead, Iribe says he's looking to the greater community to tackle that issue, something he believes will be VR's "next major, major, major breakthrough."

"We can't explore this new field in a vacuum," says Unseld.

As for Story Studio's commercial prospects, Iribe was tight-lipped, saying only that future releases would be exclusive to the Rift platform, and that the company had no plans to announce a monetization strategy. Wider distribution for Story Studio's shorts will only come into play, Iribe says, when mobile VR catches up to Crescent Bay's level of immersion and presence.

With the Sundance Film Festival as the backdrop for Story Studio's unveiling and Oculus VR's Hollywood debut, Unseld intends to elaborate further on the high-profile talent involved with Lost, as well as the number of projects currently in development. And, of course, there's also the potential for connecting with future creative partners.

"Every step of the way as we learn, we're going to be turning around and sharing these things," says Unseld. "We can't explore this new field in a vacuum."