Facebook's Oculus VR Taps Netflix to Take Virtual Reality Mainstream

Facebook Inc.'s Oculus will sell movies, video games and streaming services via its virtual reality headsets, seeking to make the devices more appealing to average consumers, the company announced during a presentation in Hollywood on Thursday. Partners include 21st Century Fox Inc. and Lions Gate Entertainment, the studios behind "Gone Girl" and "The Hunger Games," Minecraft and video game service Twitch Interactive Inc., as well as streaming services such as Netflix and Hulu.

Facebook is betting virtual reality will be the next main technology and communication platform, a new way for people to watch videos, play games and share vignettes from their daily lives. Video sharing has grown 40 percent on Facebook since the start of the year, the social-networking company said on its most recent earnings call, and the company introduced 360-degree videos in collaboration with Oculus earlier this week.

"In just a few years, virtual reality has gone from the science fiction dream to an awesome reality," Zuckerberg, Facebook's chief executive officer, said during the presentation. "Right now we're entering the golden age of video and animation; most of what people share and experience is moving. After video, it's VR."

Zuckerberg cautioned that initial sales of virtual reality devices would be small, as consumers get used to the new technology. Many of these movies and services will be available first on Samsung Electronics's Gear headset, which uses Oculus technology.

Samsung unveiled a new version of the headset that will cost $99, a price Samsung Mobile Senior Vice President Peter Koo said will help bring virtual reality to the mainstream. Samsung's headset needs a smartphone to work.

Facebook will begin to sell the Oculus Rift, its first consumer virtual reality headset, early next year. It will cost about $1,500 (roughly Rs. 10,000), including the computer required to run the device, according to a recent story in Vanity Fair. The Rift is the most-anticipated product in a market projected to reach almost $16 billion (roughly Rs. 1,05,880 crores) by 2020, according to researcher MarketsandMarkets.

Facebook's $2 billion acquisition of Oculus VR last year spurred other companies to accelerate or develop their virtual reality plans. Google Inc. sells the low-cost Cardboard kit for turning phones into headsets, while Sony Corp. is working on a virtual reality headset to complement its PlayStation gaming device, and has said it will begin selling PlayStation VR next year.

Gaming is what first inspired Oculus founder Palmer Luckey to develop Oculus. He made a brief appearance Thursday to announce that Minecraft would be available on Oculus headsets next year.

Thursday's announcements also signaled Hollywood's growing interest in virtual reality. Fox said it was the first major studio to sell movies in the Oculus store. Beginning next week, users will be able to purchase more than 100 movies from the studio, including "Alien" and "X-Men: Days of Future Past."

"We are just scratching the surface of how Hollywood and VR will revolutionize entertainment by exploring innovative ways to develop immersive experiences as a new storytelling medium," Mike Dunn, President of 20th Century Fox Home Entertainment, said in a statement.

© 2015 Bloomberg L.P.