In its quest to sell more of its Oculus Rift virtual reality headsets, social media giant Facebook (FB) - Get Report has tapped a 15-year Apple (AAPL) - Get Report hardware veteran to help lead the charge.
On Monday, Bloomberg reported that Facebook had named Michael Hillman to be Oculus Rift's head of hardware. Previously, Hillman had worked at Apple helping to develop hardware products such as the iMac personal computers, and eventually became Apple's chief architect for all desktop computers, according to the Bloomberg report. In 2015, Hillman left Apple to become a vice president at self-driving car startup Zoox.
Hillman will be working closely with Oculus chief operating officer Hans Hartmann, who left his position as COO of Fitbit (FIT) - Get Report about a year ago to join the Facebook team. In addition, Facebook hired Hugo Barra in January to be vice president of virtual reality at Oculus; previously he served as vice president of international at Chinese smart phone maker Xiaomi, and vice president of Android at Alphabet's (GOOGL) - Get Report Google.
Oculus is best known for the virtual reality headset Oculus Rift, which was first released exactly one year ago today. The device allows user to look around 360 degrees at a completely artificial environment, which is particularly useful when creating immersive gaming experiences. The company has already released over 100 Oculus Touch games on its store and has plans to release more over the next year.
Facebook first acquired Menlo Park-based Oculus for $2 billion in 2014, just two years after it was founded by entrepreneur Palmer Luckey. After the deal was announced, Facebook CEO Mark Zuckerberg wrote a post on his website that said Oculus would continue to operate independently under its parent company and that it would develop virtual reality first for gaming before extending into other territories.
Facebook cut the price on the Oculus Rift from $599 to $499 earlier this year. In addition, the Oculus Touch controllers received a similar price cut to $99 from $199. The drop in price made the headset more competitive with its main rival, the HTC Vive, which costs $799 and was released by HTC and Valve last April, shortly after the Oculus Rift was released. However, the Rift is still significantly more expensive than the $399 Sony (SNE) - Get Report Playstation VR headset option that came out in October, and Google's $79 Daydream View headset option that was released in November.
Oculus's VP of content Jason Rublin said that the price tag of the device was seen as the biggest barrier to it becoming more mainstream, pcgamer.com reported last month. In addition, Rublin noted that the cost of making the headsets had dropped in the past year and that new COO Hartmann had experience with reducing the cost of hardware products. "We think this shifts us into second gear," he told the publication about the price cut.
According to New York-based research firm SuperData, Oculus Rift is estimated to have sold 355,088 units in 2016, a number that's less than its three main competitors despite having out the earliest. The HTC Vive sold an estimated 420,108 units in 2016, vs. Playstation VR's 2,602,3078 units and Google's Daydream View 450,083 units. This data shows why Facebook would think it important to reduce the Oculus Rift's cost. In addition, Rublin told pcgamer.com that customer surveys Facebook conducted confirmed the importance of an affordable headset option.
Earlier this year, Zuckerberg revealed in a Facebook post that Oculus VR was working on a variety of new technologies, including a prototype for Oculus VR gloves. "We're working on new ways to bring your hands in virtual and augmented reality," he wrote. "Wearing these gloves, you can draw, type on a virtual keyboard, and even shoot webs like Spider Man."
In January, Zuckerberg and Luckey testified in a court trial against game maker ZeniMax Media's claims that it helped develop the technology for the Oculus Rift headset. The company argued that one of its employees, games developer John Carmack, started working with Oculus VR founder Luckey while still employed at ZeniMax and stole some of its data before becoming CTO at Oculus in 2013.
During the trial, Zuckerberg said the company was very confident that the headset was made with Oculus technology. However, in February, Facebook was ordered by a Dallas jury to pay ZeniMax $500 million in damages, much lower than the $2 billion that ZeniMax originally sought in court.