The very small, and often very excitable, world of virtual reality was in an uproar last week when Oculus VR released a software update that broke a third-party program that allowed Rift games to be played on the HTC Vive.

"Our latest software update included several new features, bug fixes and security upgrades, including an update to our entitlement check that we added to curb piracy and protect games and apps that developers have worked so hard to make," Oculus told Polygon. "This update wasn't targeted at a specific hack."

We were told this was coming. "When we first learned about hacks that modify our software to interfere with the security, functionality and integrity of the Oculus ecosystem, and allow games to run outside the scope of our QA, testing and support, we immediately notified the community that we will not be supporting or maintaining the long term usability or quality of hacked software," Oculus said.

The developer of Revive, the program that allowed Rift games to be played on the Vive, has since updated the software. "I really didn't want to go down this path, but I feel there is no other way," the developer wrote in an update. "This release bypasses the Oculus Platform DRM in Unreal Engine games, so the entitlement check doesn't fail because the headset isn't connected."

In simple terms, the first version of the software didn't allow pirated games to be played. The latest version removes the DRM check completely, so the door is now open for piracy. "I still do not support piracy, do not use this library for pirated copies," the developer stated. "Only Oculus Dreamdeck has been tested so far, but it should work for every Unreal Engine game. Bypassing the DRM in Unity Engine games is being worked on, will be added to the next version."

Oculus, in the past few days, has lost a significant amount of goodwill from the community and picked a fight that led to the creation of a tool that allows piracy. Our response?

Why this matters

Oculus has to decide what business it's in, and where it wants to make its money. If the idea was that the Oculus Store would be a large part of the platform's success, Oculus will need to rethink that.

Steam already sells Rift and Vive games, and programs like Revive prove that the only thing keeping Rift exclusives from the Vive are contracts. The two platforms are just too alike for there to be any meaningful difference that would keep games from working on both platforms.

Which puts Oculus in a hard position. The Touch controllers may be coming later this year, but right now the Vive can do everything the Rift can do, but the Rift can't do everything the Vive can do. The Rift has exclusive games, but developers are helping to get those games to work on the Vive. And an arms race to stop that has led to the destruction of Oculus' DRM, along with a loss of goodwill from the community.

It's unlikely that Oculus can create a software lock that can't be cracked, and even if the company could, there's no reason for developers for sell their games exclusively on the Oculus Store unless Oculus cuts them a check. Without that money, a developer is much better served by selling a version of the game on Steam that works on both the Vive and the Rift, and soon the Rift store could be a ghost town with a few exclusives and locked-down versions of games that you'd be better off buying from Steam.

This, if you're Oculus, is not ideal.

Which is why this is such a bad look. The Oculus platform can't compete with Steam in any meaningful way, and right now the Oculus hardware can't compete with the Vive on features. The ability to purchase and play games on a competing platform isn't the issue, and it's certainly not an issue Oculus can solve with software. The issue is that so many people want to.

And now Oculus wants to control those developers? It's never going to work.

No one would want to go to Steam if Oculus had a better storefront with working social features. If the Rift could match the Vive feature for feature, including motion controls, the flow of games could take place in both directions instead of Vive owners hoping to replicate the Rift using their hardware. So Oculus is stuck releasing software security updates that both annoy customers and are broken within hours in an attempt to keep those pesky customers in one place.

Valve doesn't really care where you buy your VR games, because the company knows you'd rather be buying your games from Steam. Oculus is years away from matching the features already found on Steam, and the VR community is being very vocal about its desire to play games purchased on either platform on the Vive. And there's no reason, outside of Oculus' business, for the two platforms to be segregated by software checks.

"The hardware is almost identical," developer Andy Moore, who is working on Fantastic Contraption, told Polygon in a previous article. "The software and APIs [application program interface] are almost identical. The specs are almost identical. The Vive can do seated and standing and [with] the Vive you can mount both your lighthouses on one wall. And on the Oculus you can move one of the cameras to the back corner and get room scale."

Oculus needs to decide what business it's in. Is the value in hardware that can be replicated by the Vive? Is the business in a storefront that lacks even basic social features? Oculus can't just keep erecting walled gardens that developers walk through before the weekend is over, leaving the hardware and software even more exposed. The company has to find a way to make its hardware and software better than the competition so players want to stay.

And, even with Oculus having Facebook's money, Valve has such a huge advantage in this area that the software giant can afford to keep the Vive as open as possible while still raking in huge profits from Steam. That's an approach Oculus can't afford to take, but Facebook's multibillion-dollar VR bet may not have many other options. It's a losing battle.