Oculus: VR Company's History Starting From Founding, Guide to Devices

Oculus was a virtual reality company founded by Palmer Luckey in 2012. It was acquired by Facebook, now known as Meta, in 2014 for $2 billion in cash and stock.

Luckey is the designer of the Oculus Rift VR headset that was later rebranded as Meta Quest. Meta has also released the Meta Quest 2 and Meta Quest Pro VR headsets and is planning to debut Meta Quest 3 this fall.

Luckey began designing and building VR headsets in 2009 and completed the first prototype for what would become the Oculus Rift headset the following year in his parents' garage in Long Beach, California, when he was 17 years old, according to a Smithsonian report.

He initially funded these products by fixing and reselling damaged iPhones and working jobs as a groundskeeper and computer repair technician, per the report. Video game pioneer John Carmack, who had been researching VR technology, asked Luckey to lend him a prototype of the Oculus Rift and wrote a glowing review of the product.

Luckey launched Oculus VR in April 2012, as well as a Kickstarter campaign seeking $250,000 to fund the project. The Oculus Kickstarter far surpassed its goal by September 2012 and raised nearly $2.5 million.

In June 2013, Oculus successfully closed $16 million in Series A funding co-lead by Spark Capital and Matrix Partners, Insider previously reported. Then, in December, the company raised $75 million in Series B funding led by Andreessen Horowitz.

The Oculus VR was the company's first consumer product. Before being acquired by Meta, Oculus also created the Oculus Rift DK1 and the Oculus Rift DK2.

"Designed by gamers, for gamers," read Oculus VR's original Kickstarter page. But Meta CEO Mark Zuckerberg envisioned use cases beyond gaming when he purchased the company.

"After games, we're going to make Oculus a platform for many other experiences," Zuckerberg wrote in a blog post regarding the announcement of Meta's acquisiton of Oculus. Imagine enjoying a court side seat at a game, studying in a classroom of students and teachers all over the world or consulting with a doctor face-to-face — just by putting on goggles in your home."

Virtual reality has been a major initiative for Meta, including building the metaverse and developing new generations of VR headsets. The company has invested $36 billion in the metaverse, which is a general term for a VR environment where users can socialize, play games, shop, and interact in other ways.

But Meta's Reality Labs division, which is tasked with building the metaverse, has remained unprofitable. Last year, the division lost $13.7 billion.

Zuckerberg said earlier this year that the company will focus on cost-cutting and efficiency, and will continue spending on VR but will be "constantly shifting how we execute."

Meta also faces competition from Apple and others in the VR space. Apple is releasing a mixed-reality headset, called Vision Pro, next year. But some Meta VR users are balking at Vision Pro's price: The device comes with a hefty $3,400 price tag. Meta's VR headsets range from about $300 to $1,000.

Much of Meta's VR work was spearheaded by Carmack, who joined Oculus a year before it was acquired by Facebook and served as Meta's consulting chief technology office for VR initiatives. Carmack left Meta in December 2022 to launch an artificial intelligence startup. While at Meta, he was critical of the company's progress in advancing VR and augmented reality.

Luckey, who dropped out of college to launch Oculus when he was 20 years old, has also been critical of Meta's VR products since he was fired from Facebook in 2016 after making contributions to far-right political groups. He said he didn't think the metaverse was a "good product," but that it could be "amazing in the future."

He also called Apple's Vision Pro "so good."

After selling Oculus and leaving Meta, Luckey founded Anduril Industries, a security and defense technology startup that strives to make the U.S. military more high-tech. In 2022, the company garnered a $1.5 billion investment, at an $8 billion valuation, which puts its total funding at $2.3 billion.

Lisa Eadicicco contributed to this report.