00:00

MUCH FOR JOINING US. THIS NEW SAMSUNG YEAR HEADSET THAT YOU PARTNERED ON IS GETTING SO MUCH BUZZ. $99. AT THE SAME TIME, IT IS NOT OCULUS RIPPED. WHY THIS PRODUCT NOW WHEN CONSUMERS ARE WAITING FOR RIPPED? BRENDAN: WE WANTED TO GET VIRTUAL REALITY OUT TO AS MANY PEOPLE AS POSSIBLE. IT WILL APPEAL TO A NEW AND DIFFERENT AUDIENCES, ESPECIALLY AT $99 PRAYER -- PAIRED WITH YOUR SMARTPHONE. I THINK IT IS JUST A BIGGER AUDIENCE. SO WE ARE EXCITED ABOUT THE NEW PARTNERSHIP WITH SAMSUNG. EMILY: YOUR FORMER PARTNERSHIPS WITH NETFLIX, FOX, LIONS GATE IN TERMS OF CONTENT, HOW DO YOU SHARE REVENUE ON THAT CONTENT? DO YOU GET A CUT OF WHAT NETFLIX OR HULU GET? BRENDAN: WE ANNOUNCED A LOT OF PARTNERSHIPS TODAY WITH THE GAME DEVELOPERS AND ENTERTAINMENT AND FILM STUDIOS AND PRODUCERS AND SERVICES LIKE NETFLIX AND HULU AND ONES THAT YOU MENTIONED. WE JUST WANT TO PROVIDE AS MUCH ENTERTAINMENT AS POSSIBLE ON GEAR VR AND ON RIFT FOR USERS TO ENJOY. THESE PARTNERS ARE REALLY EXCITED ABOUT VIRTUAL REALITY AND WHERE THIS IS ALL GOING TO GO. AND THEY WANT TO GET IN ON THE GROUND FLOOR. WANT TO GET IN NOW. EMILY: CAN YOU GIVE US AN IDEA OF HOW THE? REVENUE SHARE WORKS BRENDA -- REVENUE SHARE WORKS? BRE NDAN: THESE ARE THE EARLY DAYS AND WE ARE DOING EVERYTHING WE CAN DO TO SUPPORT THEM AND THEY ARE DOING EVERYTHING THEY CAN DO TO SUPPORT US. THEY ARE JUST DOESN'T IS HE A STICK ABOUT WHERE THIS IS GOING TO GO AS WE ARE. EMILY: CONTENT IS ONE THING. EXCLUSIVE CONTENT IS ANOTHER. HOW IMPORTANT IS EXCLUSIVE CONTENT TO OCULUS, STUFF YOU CAN ONLY SEE WHEN YOU USE YOUR HEADSET? BRENDAN: THE CONTENT YOU HAVE ON THESE DEVICES WILL CERTAINLY BE A BIG DRIVER OF WHO IS GOING TO COME ONTO THE PLATFORM AND WHO IS GONE TO BUY THE PRODUCT. AT OCULUS, WE DON'T HAVE THAT MUCH IS CLOSE OF CONTENT. WE HAVE A LOT OF FIRST PARTY AND SECOND PARTY CONTENT. THERE IS A LOT OF CONTENT WHERE WE HAVE FULLY FUNDED THE ENTIRE GAME. WE CONSIDER THAT A FIRST PARTY APPROACH, LIKE MICROSOFT AND XBOX WOULD HAVE HALO. WE HAVE THIS WHOLE SUITE OF GAMES THAT WILL ONLY BE ON OUR PLATFORMS BECAUSE WE PAY FOR THE FULL DEVELOPMENT RIGHT FROM THE BEGINNING LIKE A FIRST PARTY GAME. EMILY: I WAS SPEAKING WITH THE NDS CHRISTIANSEN WHO TOLD ME HE THINKS VIRTUAL-REALITY WILL BE MAINSTREAM AS EARLY AS NEXT YEAR. THIS SAMSUNG EAR HEADSET SEEMS LIKE THIS COULD MAKE THAT POSSIBLE. WHERE DO YOU THINK VR WILL BE MAINSTREAM AND HOW MANY HEADSETS INITIALLY DO YOU EXPECT TO SELL? BRENDAN: I THINK IT DEPENDS ON YOUR DEFINITION OF MAINSTREAM. WE BELIEVE THE MASS MARKET WILL HAVE A LOT OF EARLY ADOPTERS OF VR. BUT IF YOU ARE LOOKING AT THE SMARTPHONE SCALE, AT BILLIONS OF USERS OUT THERE, THAT WILL TAKE A LONG TIME. WE SAID TODAY THIS IS JUST THE BEGINNING AND, YEAR-OVER-YEAR, IT WILL GROW INTO SOMETHING BIG. BUT IT REALLY IS GOOD TO START SMALL. EVERYBODY IS GETTING AND NOW BECAUSE THEY ARE EXCITED ABOUT THE POTENTIAL AND GROW OVER THE NEXT YEARS, LIKE SMARTPHONES DID IN THE EARLY YEARS. IT WILL TAKE A WHILE, BUT IT WILL GET VERY BIG IN THE FUTURE. EMILY: BEING PART OF FACEBOOK, WHAT D.C. FOR THE POTENTIAL FOR SOCIAL AND INTERACTIVE VR -- WHAT DO YOU SEE FOR THE POTENTIAL FOR SOCIAL AND INTERACTIVE VR MARKETS? BRENDAN: MARK ANNOUNCED YESTERDAY, FACEBOOK ANNOUNCED THAT THEY HAVE 360 VIDEOS ON NEWS FEED. THAT IS JUST THE FIRST STEP TO THAT IS NOT FULL TRUE VIRTUAL-REALITY. YOU CAN EXPERIENCE IT IN A VR HEADSET. OVER TIME, WE WILL GO TO NEW CAPTURE DEVICES THEY CAPTURE TO 3-D. SO YOU CAN CAPTURE A MOMENT IN TRUE 3-D, NOT AN OLD PHOTO OR VIDEO, BUT FULLY IMMERSIVE EXPERIENCE YOU CAN SHARE WITH OTHERS. AND THEY WILL FEEL LIKE THEY'RE RIGHT THERE WITH YOU. SO MAYBE IT IS YOUR KID'S BIRTHDAY AND I CAN SHARE IT WITH YOUR FAMILY AND THEY CAN FEEL LIKE THEY ARE ACTUALLY AT THE BIRTHDAY PARTY WITH YOU. AND THAT IS WHEN TO BE VERY BIG. THAT IS WHAT I THINK SCOTT AND MARKETABLE FACE BUT TEAM IS SO EXCITED ABOUT. EMILY: HOW MANY PEOPLE WILL FORK OVER A POTENTIALLY HUNDREDS OF DOLLARS MORE FOR RIFT. HOW WILL THE EXPERIENCE BE DIFFERENT? BREND AN: WE LOOK AT BOTH OF THESE AS MASS-MARKET PRODUCTS. THEY WILL START SMALL AND THE AUDIENCE WILL BUILD OVER TIME. BUT I THINK THERE IS GOING TO BE A VERY STRONG ENTHUSIAST MARKET ON THE OCULUS RIFT. THERE IS HUNDREDS OF MILLIONS OF PLAYERS A PC VIDEO GAMES. A LOT OF PEOPLE SAY THE PC IS IN DECLINE. ACTUALLY, THE PC GAMING MARKET IS GROWING YEAR-OVER-YEAR. IT IS GETTING BIGGER AND BIGGER. THERE IS THIS USE SUPER ENTHUSIASTIC AND PVR IS GOING TO EXPAND -- PC VR IS GOING TO EXPAND. AND YOU WILL HAVE IT AT A MUCH LOWER PRICE POINT, MORE ACCESSIBLE FOR SOME THIS FOR SOMEWHAT DIFFERENT AUDIENCE THAT WILL ALSO BE SUPER COMPETITIVE -- COMPELLING. EMILY: I KNOW YOU HAVE NOT GIVEN A LAUNCH DATE FOR RIFT RIGHT NOW. WE ARE STILL EXPECTING IT TO COME OUT EARLY NEXT YEAR. IS THAT STILL THE CASE? WILL WE SEE IT IN THE FIRST QUARTER? WHAT CAN YOU TELL US ABOUT THE COST? BRENDAN : THE RIFT IS ON SCHEDULE. THE TEAM IS MAKING A CREDIBLE PROGRESS. WE WILL BE SHIPPING IN Q1 OF NEXT YEAR. THE TEAM IS WORKING REALLY HARD. WE HAVEN'T ANNOUNCED THE PRICE YET. BUT WHAT WE DID SAY IS YOU CAN HAVE A RIFT AND A NEW PC -- BECAUSE MANY PEOPLE NEED NEW PCS -- THERE ARE CERTAINLY SOME PC AND THAT HAVE THEIR OWN PC AND JUST UPGRADED GAMING CARD AND HAVE EVERYTHING THEY NEED. BUT FOR A LOT OF NEW USERS, THEY WILL NEED THE PC AND THE COMBINED PRICE WILL BE ACTING HUNDRED DOLLARS OR LESS. YOU WILL BE ABLE TO SCALE OUR GET BIGGER PCS IF YOU WANT. BUT THAT IS THE OPTION THAT WE ARE EXCITED ABOUT. THAT IS NOT THE HEADSET ALONE. THAT IS THE HEADSET AND THE PC. EMILY: AS YOU SCALE UP THE PRODUCT AND THINK ABOUT WHAT THAT LOOKS LIKE, WHAT ABOUT THE BUSINESS MODEL? DO YOU SEE ADVERTISING WITHIN OCULUS? AND WHAT DOES THAT LOOK LIKE? BREND AN: WE ARE NOT THINKING ABOUT ADVERTISING AT ALL. WE ARE THINKING ABOUT ADVERTISING OUR OWN PRODUCT OUT IN THE WORLD TO GET MORE PEOPLE TO GRAB A RIFT OR A GEAR VR. VR ADVERTISING -- IN-VR ADVERTISING IS NOT SOMETHING WE ARE TALKING ABOUT RIGHT NOW. EMILY: REALLY EXCITED TO SEE THE SAMSUNG YEAR THAT WILL BEAT -- SAM SOME -- SAMSUNG GEAR THAT WILL BE OUT FOR THE HOLIDAYS. SCARLET: EMILY CHANG SPEAKING