Oculus just officially announced that they’d be winding down Story Studio, the company’s internal VR film studio which produced first-party VR shorts like Lost, Henry, and Dear Angelica. Along with the closure, the company also says they’re earmarking $50 million to invest in non-gaming experiential VR content, and in doing so reveals a major reason why the company opted to shutter the studio.

Oculus announced the internal Story Studio at the start of 2015, saying that its mission would be to explore VR film and inspire the world to see VR as a medium for narrative and storytelling.

At the start of 2015, that made a lot of sense. The creative community at the time was still largely wrapping its head around the idea of VR, and among those that had, figuring out how to actually produce VR film content present a new challenge.

“When we started to show people [the Oculus Rift] in Hollywood, their question was ‘how do we get started?’… We said ‘you pick up these gaming tools like Unity or Unreal and you start making something’, but that’s not natural for [cinema creatives],” then-Oculus CEO Brendan Iribe told me at the time the studio was announced.

‘Lost’, the first VR short film released by Story Studio | Photo courtesy Oculus

So along came Oculus Story Studio to show Hollywood what game developers already realized: that VR could change the face of their medium. The studio’s shorts—Lost, Henry, and Dear Angelica—were polished appetizers designed to whet the appetite of the film community for a full course of immersive narrative that VR could offer. Though they were great demos for that purpose, the pieces themselves lacked gripping must-see narratives.

Now, two years and four months later, you could say that Oculus Story Studio achieved their mission; innovate filmmakers risk being considered ‘behind the curve’ if they aren’t at least thinking about how VR will transform storytelling. Immersive content has become a key attraction at major film events like Sundance and Tribeca, and many of Hollywood’s biggest names have since put a toe or even a foot into the warming VR waters, and things are continuing to grow.

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Lost, Henry, Dear Angelica, and Quill set the foundation upon which VR storytelling sits today. The Story Studio team are pioneers in VR development […],” the announcement of Story Studio’s closure reads.

‘Henry’, Story Studio’s first release, would take home the first ever Emmy for ‘Outstanding Original Interactive Program’ | Photo courtesy Oculus

And so Facebook is sensibly winding the studio down as part of a larger internal reorganization of Oculus which in the last few months has seen founder Palmer Luckey departing the company, CEO Brendan Iribe stepping into a new role as Head of Rift, and the hiring of Hugo Barra as the new Head of Oculus, amidst other shuffling.

Oculus says they’re earmarking $50 million—of the $250 million they recently committed to invest in VR content—exclusively for external investments in “non-gaming, experiential VR content.”

“In the same way we invested in the third-party game developers who made the incredible content lineups for Rift and Gear VR, we’re going to allocate more resources to third-party creatives to build out the VR storytelling library,” the announcement continues.

‘Dear Angelica’, Story Studio’s third release, necessitated the creation of ‘Quill’ a VR paint app now available for the Rift | Photo courtesy Oculus

Claiming “mission accomplished” is a nice way to let everyone involved (deservedly) walk away from Story Studio proud of their work. But it isn’t the only reason it made sense to close the internal studio. Another was due to an awkward relationship to external studios who are trying to build real businesses in VR film.

Studios like Within, Baobab, Penrose, Felix & Paul, and plenty more have raised significant money in the pursuit of becoming defining studios in VR film. These companies would often rub elbows with Oculus Story Studio at big film events like Sundance and Tribeca, ultimately all competing for the same limited amount of attention.

But as Oculus is a major VR platform holder, it often ended up shining the spotlight most strongly on its own internal Story Studio works, with big press events and even preferential placement on the Oculus storefront; not exactly the kind of relationship you want to have with external creators whom Oculus wants to court and help thrive on their platform.

You can imagine the tough internal decision making too: if Oculus’ the ultimate goal is to create a self-sustaining ecosystem of VR content, how does it look to your external content creators when the company is internally funding and releasing competing content for free instead of supporting the creators that the company hopes to one day thrive on the Oculus platform?

While Story Studio was surely important in getting some quality content produced to inspire folks with the potential of VR film, Oculus’ decision to wind it down in favor of throwing funding at external studios makes a lot of sense when you take a step back and look at what the company’s overall goal is: to be a platform and hardware maker, not a content producer. The move greatly improves the optics of Oculus’ priorities, and tells external VR film studios that the company is committed to enabling them, not competing with them.

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Ben is the world's most senior professional analyst solely dedicated to the XR industry, having founded Road to VR in 2011—a year before the Oculus Kickstarter sparked a resurgence that led to the modern XR landscape. He has authored more than 3,000 articles chronicling the evolution of the XR industry over more than a decade. With that unique perspective, Ben has been consistently recognized as one of the most influential voices in XR, giving keynotes and joining panel and podcast discussions at key industry events. He is a self-described "journalist and analyst, not evangelist."
  • Wednaud Ronelus

    This is a logical step forward. They did the right thing.

  • But they haven’t made it to California yet.

  • Randall Rudd

    Great! 50 million up for grabs for VR content developers, huh? So, please publish info or links to Oculus contacts that will enable content providers to establish a dialogue.

  • Foreign Devil

    I think they should have sold it instead of closing it. More profits that way too.

  • Lucidfeuer

    “Why the Closure of Oculus Story Studio is Good News for VR Filmmakers”

    I almost vomited in my mouth. I hope we won’t see these violent alienating contradictory titles on R2V. “Apple just fucked you over, and why this is good for user”, “Facebook is now censoring opinion, and why it’s good for democracy”….please no.

  • MW

    Wow! In the eyes of VR believers even failure and closing is ‘success’:) Do I really need to be genius to see that spending millions of dollars on movies looking like 360p, for insanely expensive hardware is a bad idea?
    And – mark my words – if VR hardware dont be much better and much cheaper soon, the same fate awaits mass gaming and software VR industry.

    • WyrdestGeek

      I would mark your words.

      But I do not think there would be a point.

      One way or another, in *some* form or another, AR/VR will eventually become part of the fabric of “normal”.

      But it probably won’t happen super soon, and it might not happen within the existing gaming ecosystem.

      And that means, if you want to be stubborn, you can keep saying that you were right.

      Furry cows moo and decompress.

  • Adam Zawadzki

    The closing of storystudio is just sad. They made remarkable content, which was great in visual style and story telling. There is only Penrose studio which deliver the same high quality in VR. In the end I hope that the people from storystudio stay in the VR space.

  • I know this is old news, but I’m still bummed about the end of the Story Studio. Closing it down and checking it off as a marketing and PR accomplishment was short-sighted. There’s more R&D to be done around the narrative potential, the structure and format of stories in VR, etc.

    Without a deliberate “Story Studio,” as opposed to a “Game Studio” — as we’ve seen, it’s mostly video games for VR, and those largely follow the same formula they had over on the flatscreen medium. It seems there’s already less narrative content, and consequently there’s less demonstration of the potential, so we return to the reason for Story Studio in the first place. Story Studio did make an impact, but it wasn’t lasting enough, because it needed a more sustained effort.

    Does anybody know: who has picked up the mantle here? Thanks for any replies.