Oculus Co-Founders Luckey and Mitchell on the Rift’s Progress, Price and Limitations (Q&A, Part One)

There were plenty of great onstage interviews at D11 last week, but — as attendees doubtless know — the conversations that happen offstage are often just as engaging. Such was the case on the last day of the conference, when Oculus VR co-founders Palmer Luckey and Nate Mitchell drove up from their office in Irvine, Calif., for lunch and an hour-long chat.

Oculus is a 30-person startup focused on just one thing: Virtual-reality videogames, by way of a wearable headset that plugs into gamers’ PCs. Its much-anticipated VR headset, the Oculus Rift, was funded on Kickstarter last year to the tune of $2.4 million, and an early version is now in the hands of thousands of game developers. A consumer version is on the way — though the company has yet to announce a release date.

At conferences like this year’s GDC, Luckey has publicly acknowledged that the first versions of the headset won’t be perfect, because developers are still learning what game mechanics work (or don’t) in VR. In this wide-ranging Q&A, Luckey and Mitchell told AllThingsD about that learning process, the Rift’s limitations, its ballpark price point, what they want from developers, messing with coworkers wearing the Rift, and how it stacks up to other next-gen technology like the Xbox Kinect and Google Glass.

For easier reading, we’ve split the chat into two parts. Part One is below. And here’s Part Two.

(Before we begin, a sad note: This interview took place last Thursday, one day before Oculus VR’s lead engineer and fellow co-founder Andrew Reisse was struck and killed as a bystander during a high-speed car chase. The company memorialized Reisse as a “brilliant computer graphics engineer” on its blog on Saturday).

Asa Mathat / D: All Things Digital

AllThingsD: How do you control people’s high expectations for the Rift? At GDC, Palmer called virtual reality the “holy grail of gaming,” but was quick to clarify that the first version you release won’t completely fulfill that promise.

Palmer Luckey: The developer kit, especially, but yeah, even the first consumer Rift has a long way to go. People who research it tend to have good expectations, but there’s two other sets: You have people who think that VR tech is already super-advanced, that it’s like “The Matrix” already, and that we just happen to be cheaper. And then you have people who think that it’s completely broken and hopeless. The best way is to get them to look inside of a Rift, and usually they’re like, “Oh, I get it. It’s not the Matrix, but it’s also not terribly broken.”

Who’s the audience for the Rift? Who’s going to really appreciate it?

Luckey: I don’t think it’s just hardcore gamers. At GDC, Valve talked about how players who were very skilled at Team Fortress 2 felt like the Rift lowered their skill level. I play a ton of TF2: You’re jumping off things and spinning around and then instantly snapping back, constantly whipping back and forth as you walk along. But what they found with people who didn’t play games as much, who weren’t TF2 players — they reported that it increased their perceived skills. I think the Rift can open up the possibility, for a lot of games that have been “hardcore games,” for normal people to play them. They have the right muscle memory built up. Every day, they look around and they move their head to look around. It’s not a huge leap to do that inside of a video game when you have the proper tools.

Nate Mitchell: It also totally depends upon the content. We’ve already seen some people do Minecraft mods (unofficial modifications to the original game to support the Oculus Rift). We have the families in the office, they bring in their kids, and you’ve got 10 kids playing Minecraft in our conference room on the Rift, on the same server. That shows you that there is this huge audience of all sorts of people.

Luckey: In fact, we’ve done that some in the office, too. [laughs] It’s not just for the kids.

Mitchell: Right now, the audience is game developers, and the content is super-key to the whole user experience. Having content that appeals to those types of people, that’s what we want.

Do you need a killer app?

Mitchell: Definitely. We could use a couple killer apps. Ideally, we’d have a game for the niche market. You’d have Call of Duty 9 over here, and something like Minecraft over here, and a wide swath of games in between.

But what about a killer app that’s exclusively for the Rift? A lot of Wii owners only played Wii Sports. Do you need something like that to distinguish the game play?

Mitchell: I won’t say that we need it, but I will say that we want it. That’s something we are trying to figure out. Is it something someone else is going to develop? We’ve discussed — does it make sense to do something ourselves internally? We’re not sure yet. Right now, the focus has been, “Let’s build the tools, and help the developers get there.”

Luckey: It doesn’t make sense for our first focus to be to hire a bunch of game developers to sit and try and figure out what works best in VR, when there’s literally thousands of other people that are willing to figure it out for themselves. They want the privilege of being the first to work in this space.

How does the Rift fit in with other new gaming hardware coming out, like the Xbox One and PlayStation 4?

Luckey: Right now, it’s just for PC games, because that’s the open platform. Mobile support’s also possible, but that’s just more of a technical problem — phones are not powerful enough to provide a good VR experience right now. There’s no technical reason that the Rift can’t work on consoles. It has standard input/outputs, it wouldn’t be a lot of work. It’s just a matter of console manufacturers deciding to license it as a peripheral. They’re the gatekeepers.

Have you talked to them about that?

Luckey: We can’t say.

Mitchell: I think when you look at this upcoming console generation, we are this black sheep, doing something completely different, but we like that. We’re aiming for what we consider to be next-generation gaming. Xbox and PlayStation, they’re doing awesome stuff. And we’re big fans. That said, the Rift is going to be something entirely different.

Luckey: And we’re focusing specifically on gaming. We’re not trying to make a multi-platform home media hub for the family.

How much is the consumer version of the Rift going to cost?

Luckey: The current developer kits are $300. We don’t know what the consumer version’s going to cost — it could be more, could be less. But we’re looking to stay in that same ballpark. We’re not going to be charging $800 or something. We have to be affordable. If you’re not affordable, you may as well not exist for a huge segment of the market.

I guess you would know, since you have the world’s largest private collection of VR headsets.

Mitchell: [laughs]

Luckey: I’m one of the few people where it’s different. I would spend whatever it was. Gamers are not known to be the most affluent population of people. If something’s even $600, it doesn’t matter how good it is, how great of an experience it is — if they just can’t afford it, then it really might as well not exist. We’re going for the mainstream, but time will tell what the market is.

Mitchell: A big part of it’s going to be the content. If it’s only Call of Duty 9, it’s only going to be the niche hardcore gamers. If we can get other stuff on there, which I think we’re already making exciting progress on, I think it’s going to be a lot broader. The three tenets for us are immersion, wearability and affordability. If we can nail those three things, that’s the killer combination that makes it a consumer VR device.

Luckey: The other thing is, it’s possible to make better hardware if you sell it at that lower price point. When you can sell thousands of something, or tens or hundreds or millions of something, you can afford to put better components into it than if you were only making a hundred of these things for $10,000 each. There are people who’ve said, “You should sell a version with better specs for $1,000,” but it’d be better to sell it for $200 and sell more of them.

What are the limitations of the Rift right now, beyond needing to be wired into a PC?

Mitchell: We don’t have positional tracking right now.

Luckey: [That means] you can’t track movement through space, you can only track rotation.

Mitchell: That’s a big one, something we’d love to solve for the consumer version. The only other “limitation,” I’d say right now — well, there’s things we want to improve, like weight. The more comfortable it is, the more immersive it is. So, there’s that. There’s resolution. We want to bring the resolution up for the consumer version.

And, for the foreseeable future, will players still need to use a handheld console-like controller?

Luckey: We don’t know yet.

Mitchell: Human-computer interaction and user input, especially for VR, is something that we’re constantly researching and evaluating.

Luckey: The reason we’re using gamepads (now) is that everyone knows how to use it, so we don’t need to teach a new [control] device while we’re demoing. But we do know that a keyboard, mouse or gamepad isn’t the best possible VR gaming interface.

Mitchell: It’s another abstraction. We’d love to — well, we’re exploring the possibilities.

Luckey: [waving hand] Use your imagination. [he and Mitchell both laugh]

Mitchell: Microsoft, with the new Kinect, is doing some really interesting stuff. Leap Motion is doing incredible stuff. This tech is out there. It’s a matter of packaging it just right for virtual reality, so that we’re putting players totally inside the game. We always joke, you want to look down in the game and go, ‘Yes, I’m Batman!’ And then you pull out your lightsaber or whatever it is — I know, I’m destroying canon here —

Luckey: — I, I’ll just leave that.

Mitchell: [laughs]

Luckey: One of the things I talked about at GDC is that other game consoles, it’s very abstract. You’re controlling something on a screen, using a controller that’s nothing like how you interact in real life. If you hand a person who doesn’t game a 360 controller, it’s like, “Here’s a 16-button, dual analog controller. Use it!” It’s very difficult for someone to pick it up.

And that was the brilliance of the Wiimote, right? If you want to bowl, here’s the controller, just move it like you’re bowling.

Luckey: Even then, it was an abstraction. But it’s clear you want a control interface so that people feel they’re inside the game. It’s clear that you want to take it to the level where they’re not just looking around in the game, but they’re interacting in the same way that they would interact with real life. On Kinect, no matter how great the tracking is, you’re still controlling something on a screen. You don’t feel like you’re inside of the game if you’re looking at a screen in your living room. It’s never going to feel good until you can feel like you’re actually that person.

In Part Two of this Q&A, Luckey and Mitchell discuss Google Glass, motion sickness, messing with coworkers, and their long-term plans for the company.