Case 6:21-cv-00755-ADA Document 61-11 Filed 05/20/22 Page 1 of 22
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`Exhibit 10
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`
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`

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`NATIONAL BESTSELLER
`Case 6:21-cv-00755-ADA Document 61-11 Filed 05/20/22 Page 2 of 22
`NATIO WeFBPSPSE eeER Filed 05/20/22 Page2 of 22
`
`0CULUS, FACEBOOK,
`OCULUS, FACEBOOK,
`
`AND THE REVOLUTION
`THAT SWEPT
`THAT SWEPT
`
`THE
`THE
`HISTORY
`I | S T 0 R Y
`OF
`0 F
`THE
`VIRTUAL REALITY
`T Hi Ee
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`FUTURE
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`FUTURE
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`Baefick
`
`BLAKE J. HARRIS
`Wiwesrcune, BLAKE J. HARRIS
`WITH A FOREWORD
`BY ERNEST CLINE,
`AUTHOR OF
`AUTHOR OF CONS0LE WARS
`AUTHOR OF CONSOLE WARS
`READYPLAYER ONE
`READY PLAYER ONE
`
`

`

`Case 6:21-cv-00755-ADA Document 61-11 Filed 05/20/22 Page 3 of 22
`
`THE
`HISTORY
`OF
`THE
`FUTURE
`
`0CULUS, FACEBO0K,
`AND THE REVOLUTION
`
`THAT SWEPT
`VIRTUAL REALITY
`
`BLAKE J. HARRIS
`
`DEY ST.
`An Imprint of WILLIAM
`
`MORROW
`
`

`

`Case 6:21-cv-00755-ADA Document 61-11 Filed 05/20/22 Page 4 of 22
`
`.
`
`1
`
`K
`
`rights reserved.
`RA THEHISTORYOFTHEFUTURE. Copyright © 2019 by Blake J. Harris. All
`Printed in the United States of America. No part of this book may be used or repro-
`duced in any manner whatsoever without written permission except in the case of
`brief quotations embodied in critical articles and reviews. For information, address
`HarperColins Publishers, 195 Broadway, New York, NY 10007.
`
`HarperColins books may be purchased for educational, business, or sales pro-
`motional use. For information, please email
`the Special Markets Department at
`SPsales@harpercollins.com.
`
`this book was published in 2019 by Dey Street Books, an
`A hardcover edition of
`imprint of HarperCollins Publishers.
`
`FIRST WILLIAM MORROW PAPERBACK EDITION PUBLISHED 2020.
`
`Designed by Renata De Oliveira
`
`Library of Congress Cataloging-in-Publication Data has been applied for.
`
`ISBN 978-0-06-245597-0
`
`20 21 22 23 24
`
`LSc
`
`10 9 8 7 65 4 3 2 1
`
`

`

`Case 6:21-cv-00755-ADA Document 61-11 Filed 05/20/22 Page 5 of 22
`
`AUTHOR'S NOTE
`
`IN FEBRUARY 2016, 0CULUS/FACEBOOK GRANTED ME WHAT WAS ESSENTIALLY
`unlimited access to their employees for a book about the founding of
`Oculus, the magic of VR and the human drama that comes with try-
`ing to build the future. Over the course of the next
`two-plus years,
`I conducted hundreds of interviews and spoke every few days with key
`personnel at Oculus as they launched their first consumer product, at-
`tempted to lead a technological
`revolution and acclimated to life after a
`multibillion-dollar acquisition.
`Shortly thereafter, assome of the events described later in this book
`transpired, my access abruptly came to an end. Fortunately. by this
`point, I had already obtained all the information that I would need to
`finish this book.
`What
`follows is a story based on hundreds of exclusive interviews
`with Oculus/Facebook employees, many more with other pioneers in
`the VR industry, and a collection of more than 25,000 documents-
`coming from dozens of different sources--that provided me with an
`unvarnished,
`truly inside look at the history of a company, its people
`and a technological quest unlike any that's come before.
`To capture the excitement, uncertainty and oddities of that quest,
`I have written this book in such a way that I hope readers will feel like
`they are in the room with these characters as the story unfolds and as
`their objectives, perspectives and relationships evolve.
`
`

`

`Case 6:21-cv-00755-ADA Document 61-11 Filed 05/20/22 Page 6 of 22
`
`Xx
`
`AUTHOR'S N0TE
`
`this book is not an "oral history," myyears
`Although, stylistically,
`ofexperience with that format (as well as with documentary flmmak
`ing) helped guide a lot of the narrative decisions I made. Specifcaly,
`and as often as possible, I've tried to step out of the way and let thestory
`be presented through the thoughts,
`feelings and words of those who
`actually lived it. As such,
`in an effort
`to authentically recreate those
`experiences on the page, this book contains a lot of dialogue. Andsince
`dialogue is rarely remembered verbatim,
`I wanted to briefly explain my
`process for crafting the dialogue in this book, which can be broken
`down to threecategories:
`
`1.FIRSTHAND:In the majority ofcases, the dialogue that
`appears throughout
`the book is a representation of what
`firsthand sources recalled being said during a conversation
`to the best of their abilities.
`2.SECONDHAND:In cases where those present could not
`remember exactly what was said in a given moment, or
`in situationswherethosepresentdeclinedtospeakwith
`me (or declined to share certain details of a conversation),
`I occasionally--though rarely--relied on secondhand
`sources; but I did so only in situations where I had a good-
`faith reason to believe that the source would have specific
`knowledge of theconversation in question.
`3.TRANSPOSED:In several cases-particularly when it came to
`long, or nuanced,
`conversations-firsthand sources could
`remember the substance of what was discussed, but not
`necessarily a word-for-word recollection.
`In these instances,
`I relied on feedback from those involved to capture the
`essenceand meaning of thoseconversations, if not the
`exact words.
`
`I'd like to note that the success of Oculus truly was a team
`Lastly,
`effort. But unfortunately, even in a book this size, there just isn'tenough
`room to properly honor every contributor. As such,
`I have chosen to
`focus on a central narrative, and the number of times a person is men-
`tioned (or not) should not be read as a scorecard of contribution.
`
`

`

`Case 6:21-cv-00755-ADA Document 61-11 Filed 05/20/22 Page 7 of 22
`
`CHAPTER 30
`
`BLUE'S CLUES
`
`February/March 2014
`
`Mitomete ita okubyou na kako
`Wakaranaimama ni-
`
`A TIRED TAP TOo THE ALARM ON HIS PHONE, LUCKEY SHUSHED THE
`WITH
`song that he awoke up to each day: the theme song to Sword Ar On-
`line. And as Edelmann hadonce pointed out, it felt fiting that
`this-
`the anthem to an anime about virtual
`reality-was literally what got
`him out of bed every morning.
`LTypically,
`after waking up, Luckey would shower, brush histeeth,
`maybe grab a bite and then head to the ofice in his Honda Insight. But
`on February 21, things went a little different
`-because Edelmann, who
`had gotten a job at Disneyland the previous month, needed to get to
`work early that morning, and therefore had taken their car.
`Joe," Luckey said, calling up Chen who lived nearby, "I needa ride
`to the ofhce."
`b
`"Too late! I'malreadyhere."
`"So what you're saying is... youre awake and inpossessionofa
`car. Great! You can come pick me up."
`"Nice try."
`"Come on! I live so close!"
`Luckey did live pretty close, only about four miles away. But Chen
`wanted to make his friend sweat it out. "I have a better idea," he said.
`
`

`

`Case 6:21-cv-00755-ADA Document 61-11 Filed 05/20/22 Page 8 of 22
`BLUE'S CLVES
`
`337
`
`"Since, you know, you're becoming a fatass: why don't you run to the
`offce?"
`Chen, of course, was being sarcastic. But Luckey processed the
`suggestion and concluded that since he and his colleagues were in the
`midst of a companywide weight loss effort--the first annual "Oculus
`Weight Loss Challenge'-and
`since he had done some cross-country
`running years ago, this was actually a great idea.
`"Okay!" Luckey replied. "See you in a halfhour or so."
`"Wait! What?Just chill,
`Il comepickyouup in, like,tenminutes.
`"By then, you'll be too late. I'll already be out on the road, running
`like the wind!"
`With "Eye of the Tiger" now playing in hishead,Luckeydressedfor
`his sweaty "commute." This, however, was a bit problematic; since his
`wardrobeconsisted of little more than Hawaiian shirts, cargoshorts and
`lip-flops. He didn't even own a single pair of proper shoes. No, wait,
`he remembered: Chen had bought him a pair of blacksneakers at CES!
`So-Risin'up back on thestreeeeet -Luckey grabbed the sneakers
`-took my chances -he
`Did my time-
`-threw on a gray T-shirt and-
`stepped into pair of comfy American Flag pajama pantsjust a man
`andhis will to survive.
`Jogging away from his apartment, Luckey felt pretty good. Espe-
`cially when passing cars honked in support of his effort; with some
`drivers, perhaps feeling extra-patriotic due to the Winter Olympics go-
`ingon in Sochi, rolling down their windows to shout, "U-S-A! U-S-A!"
`As he hit a rhythm, his mind began to clear and, jogging through the
`streets,Luckey found himself
`thinking about Facebook; a little bit about
`what might have been had Oculus been acquired, but much more about
`the seemingly out-of-the-blue acquisition agreement that Facebook had
`ounced just two days earlier--to buy WhatsApp for $19 billion.'
`
`ONFEBRUARY 24, JOURNALIST DAVID KIRKPATRICK INVITED MARK ZUCKERBERG
`onstage at
`the Mobile World Congress in Barcelona to have a key-
`conversation. Originally,
`they had planned to discuss Facebook's
`Internet.org initiative (and, eventually. they'd get into that), but Kik-
`patrick had to at least begin by asking about the news that had shaken
`up Silicon Valley.
`
`

`

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`
`338
`
`THE HISTORY OF THE FUTURE
`
`"It's been on everybody's lips for the last week or so," Kitkpatrick
`said. "You bought WhatsApp for $19 billion. Which, once we got over
`our shock at that, some of us feel like we understand it. But tell us, here
`at the Mobile World Congress, which is really the world's major gather-
`ing of mobile communications, which is an industry that WhatsApp is
`a big part of; why did you do it and what does it mean?"
`for us,"
`Well, WhatsApp is a great company and it's a great fit
`Zuckerberg explained. "Alrcady, almost half a billion people love using
`WhatsApp for messaging. And it's the most engaging app that we've
`ever seen exist on mobile, by far. About 70 percent of people who use
`WhatsApp use it every day.
`.. So when we had the opportunity to be
`part of this journey,
`I was just realy excited to take [cofounder and
`CEO] Jan [Koum] up on that and help him realize his dream of con-
`necting a lot more people."
`Iribe watched Zuckerberg's keynote at
`From his office in Irvine,
`Mobile World Congress. And though he appreciated the rah-rah rheto-
`ric of Zuckerberg's initial explanation,
`it was what he said next, and
`throughout the rest of his keynote that especially piqued Iribe'sinterest.
`
`MARK ZUCKERBERG
`In terms of fit forFacebook,whenJan and I frst met and
`started talking about this, we really started talking about what
`it wasgoingtobelike toconnecteveryoneinthe world...
`
`Connect everyone.
`
`MARK ZUCKERBERG
`It wasn't really until we got aligned on that vision, between
`Facebook and WhatsApp, that we started talking about
`numbers and decided to make a deal. But it's that vision that
`I
`think makes the company such a great fit: the shared goal to
`help connect everyone in the world.
`
`Iribe had known that Facebook wanted to
`Prior to this keynote,
`connect everyone." After all, that was explicitly their mission. Butover
`the next forty-five minutes, he began to fully internalize what that mis-
`
`

`

`Case 6:21-cv-00755-ADA Document 61-11 Filed 05/20/22 Page 10 of 22
`
`BLUE'S CLUES 339
`
`sionreallymeant how it elevated beyond just words-and how Face-
`bookactually had a plan to try and accomplish that
`lofty endeavor.
`
`MARK ZUCKERBERG
`Today whatI really want to focus on is Internet.ong and how we
`can build this model for this industryy that can deliver the internet
`to, you know, 5-6
`(billion]-ultimately everyone in the world.
`And in doing so build what is going to be a profitable model
`amore profitable model with moresubscribers for carriers and
`geteveryoneon the internet in a muchshorterperiodof time ...
`
`Internet.org was a partnership between Facebook and mobile carri-
`ersto deliver the internet
`to those in less developed countries. The goal,
`as Zuckerberg would go on to describe, was to make it so that
`for an
`affordable price (ideally:
`free) everyone in the world could have access
`to "basic services" online--services like food pricing, weather reports,
`messaging,and social networking.
`
`DAVID KIRKPATRICK
`So it's a kind of gateway drug?
`MARK ZUCKERBERG
`Yeah. We think about it as an "on-ramp."
`
`The more Iribe thought about Facebook's mission and their biggest
`acquisitions, the more he harped on this:
`theres never been a service in
`the world that reached a billion people every day. None of the television
`networks, not even in their heyday, ever came close to reaching a bil-
`lion people. CBS? NBC: They never got to sell commercials to a billion
`peopleevery day! And here now, in this incredible new world, not only
`did Facebookhave 1.2 billion users but--with WhatsApp (500 million
`users)and Instagram (200 million
`users)they might be on their way
`tohavingthree ofthese billion-reach companies. Maybeeven four, with
`the rate that Messenger was growing.
`it would be like to get a billion
`As Iribe fantasized about what
`people into VR, an audience member asked Zuckerberg if Facebook
`was still interested in trying to acquire Snapchat.
`
`

`

`Case 6:21-cv-00755-ADA Document 61-11 Filed 05/20/22 Page 11 of 22
`
`340
`
`THE HISTORY OF THE FUTURE
`
`I mean,look,"Zuckerbergreplied, "after buying acompanyfor
`$16 billion, youre probably done for a while."
`Iribe hoped that was not
`the case, as he now planned to reopen
`discussions with Zuckerberg.
`
`"QUICK UPDATE," 0CULUS'S HEAD OF DEVELOPER RELATIONS, AARON DAVIES.
`wrote on March 5, sharing some good Mobile VR news with theexecu-
`tive team. "Max and I made a visit to Blizzard yesterday ..great meet-
`ing and good complemnent to build top-down momentum to matchthe
`bottom-up from theengineers. Most obvious and relevantopportunity,
`also most likely to get traction, is Hearthstone...
`I already got afollow
`up email about how they've been talking about VR coming soonerthan
`they thought and what that means for them."
`n Davieswaspleasedby how things had gone. With Mobile VRnow
`scheduled for release in 2015, Hearthstone seemed like a potential killer
`app. Unfortunately,
`Iribe didn't share Davies's enthusiasm--primarily
`because Iribe
`still
`harbored serious
`concerns
`about
`the viabil-
`ity of 3DOF Mobile VR (as well as frustration
`thatwithout his
`knowledge-Davies
`and Cohen had gone to see a dev and pitched a
`different product
`than the one that he and Mitchell had been pitching
`Blizzard for several months now).
`
`FROM: Brendan Iribe
`DATE: March 5, 2014
`SUBJECT: RE: Blizzard Update
`
`for me and Nate to visit. We need to
`I was expecting you'd wait
`coordinate better and make sure the message is correct.
`I don't want to turn too many PC game developers on to motion
`sickening mobile without being very up front and honest.
`
`>>>FROM: Max Cohen
`SUBJECT: RE: Blizzard Update
`
`We're not running a misinformation campaign here, Brendan...
`
`

`

`Case 6:21-cv-00755-ADA Document 61-11 Filed 05/20/22 Page 12 of 22
`
`BLUE'S CLUES
`
`341
`
`>>>FROM: Brendan Iribe
`SUBJECT: RE: Blizzard Update
`
`We've been courting Blizzard for a while. You shouldn't have gone
`withoutus..
`You should come back to the office and focus on the mobile SDK.
`It's embarrassing right now and isn't
`in a state we can ship.
`PRO UP!
`
`Pro up? That pissed off Cohen. As had the many many times Iribe
`had slighted Oculus's mobile project over the past
`few months. But
`beforehe could respond,
`Iribe had more to say:
`
`FROM: Brendan Iribe
`SUBJECT: RE: Blizzard Update
`
`is neat and a gimmicky toy. It's a taste, but
`
`Samsung's product
`the magic of VR.
`Oculus is designing, building and delivering the magic. We will be
`evangelizing that.
`Please come back to the office and we'll fix this messaging
`problem.
`
`it's not
`
`>>>FROM: Max Cohen
`SUBJECT: RE: Blizzard Update
`
`this morning to fly to San Francisco to make
`I left my wife at 4:45 a.m.
`deals happen for this product, and the trip was a huge success. If you
`want to talk in person, "ll be in tomorrow morning.
`We don't have a messaging problem. We have an executive support
`problem.
`
`-Oculus's
`Things escalated from there until David De Martini-
`head of world publishing -stepped in to play a role he'd been playing
`more and more as of late: peacemaker.
`
`

`

`Case 6:21-cv-00755-ADA Document 61-11 Filed 05/20/22 Page 13 of 22
`
`342
`
`THE HISTORY OF THE FUTURE
`
`this thread is everyone's passion to do some-
`is great about
`"What
`thing great," De Martini wrote to Cohen and Iribe. "In all honestyand
`-a "we"which bythewayincluded Iribe"discussed onMon-
`day, Mobile is an easy sell because it is pretty good and way better in
`small doses than people expect,
`it has a date, a huge partner, and a plan.
`Everyone that Aaron, Max, and I speak with will be interested and that
`is a VERY good thing,
`lt is a very good thing, because Mobile will be
`the lst place that
`they put there [icd games and apps and then Max,
`Aaron and I have a plan to WALK THEM UP THE LADDER TO
`THE REAL VR GREATNESS-PC... There really isn't astorywe
`.This
`can tell to get people to commit
`to PC right now and that is ok .
`is (al good thing, and Aaron, Max and I are communicating tightly like
`brothers and selling the true reality of Mobile VR (Aawsand al):"
`De Martini's comments were enough to end the sniping, But unfor-
`tunately, closure was yet to be found for this growing internal schism.
`
`MEANWHILE, ABRASH AND BINSTOCK WERE INCREASINGLY FEELING LIKE THEY
`were wasting their time at Valve. They both appreciated the freedom
`that the company had given them to explore virtual
`reality, but aseach
`became more invested in this technology,
`it was harder to ignore the
`fact that this investment did not seem mutual. That, financially speak-
`ing, Valve just wasn't willing to commit much to VR. And afterabout
`eighteen months of working with this technology, Abrash and Binstock
`felt like Valve was perpetually dithering and it was time for them topiss
`or get off the pot.
`they wanted Valve to produce a VR headset of
`In an ideal world,
`its own. They knew that this was a big ask-a commitment
`in the hun-
`dreds of millions,
`if not more-so,
`for the time being, all they really
`wanted was an infusion of cash to build some display prototypes. Or if
`that wasn't doable right now, then they at least needed an indication of
`when that might befeasible.
`Basically, what Abrash and Binstock wanted was some assurance
`this work they had been doing was headed somewhere. That this
`that
`was more than just a cool science project;
`that it was more than just an
`oo-lalala to impress visitors.
`In other words, as Abrash had told Bin-
`stock at a coffee shop before any of this had started:
`if you want arevo-
`
`

`

`Case 6:21-cv-00755-ADA Document 61-11 Filed 05/20/22 Page 14 of 22
`
`BLUE'S CLUES
`
`343
`
`lution, and you think you are capable of contributing, you should be
`activelypushing it forward.
`Sowhere did Valve stand? Did they actively want to push forward a
`VRrevolution? To find out once and for all, Abrash and Binstock spent
`the first week of March meeting with Gabe Newell and Valve's board
`ofdirectors.
`The following week, in a surprise to most, Atman Binstock decided
`toleave Valve and accept Iribe's offer to join Oculus. When asked by a
`what had led to this decision, Binstock explained with a sigh
`that, ultimately, "Valve is like this jolly fat man who just keeps getting
`more money and jollier but isn't willing to take any risks. They aren't
`pushingfor VR to happen; in fact, I'm not evensure if they care at all
`whether VR succeeds or fails. Whereas Oculus is different. Oculus is
`this rocket that is either going to deliver VR or explode spectacularly.
`And I want to do everything in my power to help ensure the former."
`This was a huge get for
`Iribe--who, years later, would cite Binstock
`as "the single most
`influential person when it came to me making the
`finalcallson Rift and [Oculus'shandcontroller] Touch... both hard-
`ware and software."
`
`ON MARCH 10, HOURS AFTER HIRING ATMAN BINSTOCK TO BE 0CULUS'S NEW
`chief architect,
`Iribe emailed Valve CEO Gabe Newell
`to say, "Sorry
`if we caused pain. We love Valve and want
`to maintain an awesome
`relationship with you guys. You're an inspiration to me, Palmer, and the
`crew.There's no one we'd rather change the world with ..
`The following day, Newell sent back a short
`reply: "Yep, we look
`forward to continuing to work with you all and Atman.
`I'm moving
`onto the VR team for a bit."
`Newell personally moving onto the VR team seemed to strongly
`indicate that Valve was about to get more aggressive in the VR space.
`And though this move was met with some anxiety by many at Oculus
`(particularly those who still fele betrayed by Valve's decision to launch
`a competitive SDK),
`Iribe viewed this as a net positive. Because, as he
`explained to colleagues, our biggest competitor is not Valve (or Sony
`or Microsof),
`it's not having enough people to adopt VR. Not get-
`ting enough developers on board. So having Valve compete? It's a little
`
`

`

`Case 6:21-cv-00755-ADA Document 61-11 Filed 05/20/22 Page 15 of 22
`
`344
`
`THE HISTORY OF THE FUTURE
`
`scary,yes, but I think itll begood for VR." And to round out thepoint,
`Iribe would reiterate a sentiment
`that had practically become mantra at
`Oculus: if it's good for VR, it's good for Oculus.
`"I
`think having Valve promote VR right now is a good thing," Iribe
`wrote to the team on March 14. "No one will use Steam VR unlessit's
`a LOT better and fully compatible with our full set ofhardware,which
`it simply won't [be]. Let's figure out the right way tomessagethis now,
`knowing this won't be a problem in the future."
`"Having fought
`this war with Steam once already at EA," David
`De Martini
`tried to caution Iribe,
`they have the world's most popu-
`lar platform for PC games and they are trying to become the de facto
`platform for VR. They are now the lst mover in that space and if we
`intend to have an open platform, we should negotiate with them now
`so that we get a piece of their VR sales in addition to ours. This may be
`possible and who knows what good may come of this conversation. EA
`as a 10,000 Ib gorilla couldn't
`take on Steam.
`It is a huge challenge and
`needs careful
`thought and consideration. Please trust me when I say
`the only thing that Valve really cares about is Valve. They are not bad
`people, but they are intense businessmen."
`replied that he
`Iribe appreciated De Martini's perspective, but
`wasn't worried at all" because,he said, we control our own destiny."
`Iribe then suggested they pick up this conversation after GDC (only
`two days away), though he did clarify a few things in the meantime:
`
`I don't want toengageValvearoundSteam VR revshare.
`That implies we're supporting them owning the customer."
`"We will own thecustomer. Our product, our platform,
`our customer."
`"Every step we take should be focused on delivering the
`best VR experience."
`
`In themidst ofthisback-and-forth,Iribereceivedanemailinvita-
`tion from Mark Zuckerberg to visit him at his home at Fair Oaks that
`Sunday so they could talk in person about an acquisition. Bring along
`anyone you'd like, Zuckerberg said. He ended with five words that Iribe
`lovedhearing: / WONT WASTEYOUR TIME.
`
`

`

`Case 6:21-cv-00755-ADA Document 61-11 Filed 05/20/22 Page 16 of 22
`
`BLUE'S CLUES
`
`345
`
`"MARK KNOWS WHERE WE STAND," IRIBE SAID, ADDRESSING THE EXECUTIVE TEAM
`in a conference room.
`"And he said he's not gonna waste our
`time..."
`Even so,
`it seemed unlikely that Zuckerberg would suddenly be
`willing to pay $4 billion. So what did they expect him to offer? And
`more important: how high did the number have to be for everyone to
`beon board with selling to Facebook?
`"What if it's a billion?" someoneasked the group.
`No way, too low.
`What about $1.5 billion?
`"Absolutely not," Iribe said, "We're not getting a number without
`a two in front."
`Luckey and Malamed glanced at each other- -both thinking that,
`uh,therewere plenty of great numbers with a one in fronť"
`-but
`Iribe
`wanted more, and he believed he could get it. He believed he could maybe
`evenger Zuckerberg up to $3 billion, which would essentially double the
`cof everyone else in that room. Everyoneexcept Mike Antonoy, who
`not only thought
`that Oculus was worth way more, but didn't
`really
`want to sell the company at any price. The more he thought about it, the
`less inclined he was to give up the freedom of remaining independent.
`"But we've already given up that freedom," Iribe countered. "We
`alreadyhave investors who own giant stakes in the company."
`This was a fair point, Antonov conceded. But still,
`Iribe knew what
`hemeant. They'd been through this before. It was only three years ago
`that they'd sold their baby to Autodesk, and Antonov was wary of los-
`ing that freedom again.
`Iribe understood where Antonov was coming from, and assured him
`that it wasn't as if a final decision needed to be made that day. This was a
`proces.There would be plenty of time for further decision. All that mat-
`tered right now was that Iribe had everyone's blessing before he met with
`Zuckerberg that weekend to see what the Facebook CEO had to say.
`
`ON SUNDAY, MARCH 16--ONE DAY BEFORE THE START OF GDC AND THREE BE-
`forepreorders for DK2 went live -Iribe lew up to San Francisco. But
`before heading to Zuckerberg's home, he sat down for coffee with the
`man he'd asked to join him for part of the day: John Carmack.
`Why Carmack? Why not Luckey or Mitchell or his longtime part-
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`THE HISTORY OF THE FUTURE
`
`ner Antonov? Because, Iribe reasoned that if hewere Mark he'd want to
`hear from the "godfatherof PC gaming"-the guy who'dbeenthrough
`platform shifts before--and from the purest, most technical deeppro-
`grammner sense.
`"I
`think it's important for you to share your vision for thirty min-
`utes or so," Iribe told Carmack, as they game planned at a coffee shop.
`"Mark will probably have a bunch of questions, you and I will answer
`those, and then you can head back to Dallas and I'll finish the discus-
`sion one-on-one with Mark. Sound good?"
`It did. Especiallybecause Carmack had thought that Iribe should
`have accepted Facebook's offer the first time around! Confident about
`what
`they were walking into,
`Iribe and Carmack took a cab to the
`home ofFacebook's CEO.
`"Thanks so much for coming!" Zuckerberg said, welcoming them.
`Iribe or Carmack had felt any nerves, Zuckerberg's congenial de-
`If
`meanor vanquished them. "I just ordered a pizza," he said with a smile,
`and then walked his guests out
`to a patio where-in
`the shade of a
`small gazebo-they sat and ate.
`"Why don't you tell Mark where you see all this going," Iribe sug-
`gested to Carmack.
`"I see a world in the future where there are no displays or moni-
`tors," Carmack said. “Because we have glasses. Everyone has virtual
`displays-everywhere, all the time. And soon well
`look back and it'll
`be almost
`'primitive'
`that we had these old computer boxes, and game
`consoles, and televisions up on walls."
`Carmack was an incredible speaker. The guy was famous for his
`keynotes and could go for hours at a time without seeming to catch his
`breath. He had a mental model for how all the technical details would
`work. As he delivered this overview of what he envisioned, Iribe looked
`down at his arm and noticed he had goose bumps.
`*Wow, yeah, I agree," Zuckerberg said. Carmack, soon after, left
`Iribe and Zuckerberg alone to talk business.
`6"That was surreal," Zuckerberg said, sharing a sentiment that he
`would later convey to Carmack directly via email. "I grew up playing
`his games and have always admired his work."
`At
`this point,
`it was clear that Zuckerberg wanted to do a deal,
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`but he still wasn't willing to hit the number that Iribe had loated out
`in January. Four billion outright was too much. He was willing to pay
`nearly $3 billion--and
`to structure the deal
`in a way that would espe-
`cially reward and incentivize Oculus's employees.
`"Im committed to doing this," Zuckertbergsaid. "I need to get my
`on board.
`In the meantime,
`I have one ask: that you don't go talk
`to anybody else, that you don't go shop this deal."
`
`"WE SHOULD TOTALLY SHOP THE DEAL!" LUCKEY JOKED, AS THE EXECUTIVE
`am began to discuss the deal, one they had internally code-named
`"Blue'sClues." But with GDC kicking off and preorders for DK2 go-
`ing live, there was hardly any time at the moment to talk Blue's Clues.
`A dinner at Zuckerberg's was scheduled for later in the week. The
`execswere excited to break bread with Zuckerberg and key members of
`histeam. But before that would happen, their excitement was tempered
`by a betrayal at GDC.
`"VR has been a dream of many game creators since the computer
`gamewas invented," explained Shuhei Yoshida, the president of World-
`wide Studios for Sony Computer Entertainment.
`"Many of us at Play-
`Stationhave dreamed about VR and what it could mean to the games
`we create." Then, minutes into a cryptically described Sony Panel, Yo-
`shidaunleashed the big reveal: "I am thrilled to introduce Project Mor-
`pheus, a virtual
`reality system for PlayStation 4."
`The crowd went wild. This was big news, of course, but it was by
`nomeans the betrayal. That would come forty-four minutes later into
`Sony's presentation, when Anton Mikhailov,
`from Sony R&D, an-
`nounced that they were "very excited to be working with CCP to bring
`their Eve: Valkyrie game to our devkit." Especially because "it's one
`the first games to be built ground up for VR and it shows
`Yes,itwasoneof the firstgamesto be builtexclusivelyfor VR..
`because it had been built
`for, and largely funded by, Oculus!
`In ex-
`change, CCP had given Oculus the exclusive rights to publish and dis-
`tribute their game. So what the hell had just happened?
`
`IRIBE SAID, CALLING UP THE MOST IMPORTANT PERSON IN HIs
`"HEY, MOM,"
`life. "Ive got some news I want to share. But you can't tell anybody."
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`THE HISTORY OF THE FUTURE
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`"Brendan," she replied, "I don't know anybody to tell!"
`Iribe laughed. "Really, Mom. This has to . .. you gotta really not
`tell anyone.
`I'm not even telling Luisa [Iribe's girlfriend at the time]
`because it's so confidential. Because this is a public company,
`it can't
`leak. This could even disrupt the whole deal."
`"I won'ttellanybody,Brendan."
`"Okay. So here's what's gonna happen
`
`ONE OF THE FINAL HURDLES IN CLOSING THE DEAL WAS GETTING CARMACK TO
`sign off. Which, as with hiring him at Oculus, required going through
`his wife and business manager Katherine Anna Kang. She was under
`the weather that weekend, which made it tough to close the deal-but
`even tougher were her requests for Carmack to receive over ten million
`dollars more up front; and for him to receive indemnity from Face-
`book. So that if his former company filed a suit against him, Facebook
`would be responsible for bearing those costs.
`"Oculus poked a beehive," Kang wrote to Facebook VP Amin
`Zoufonoun on March 23. "And we should not be responsible for it.
`If
`there is a judgment by a crazy judge and/or jury, we are not willing to
`risk our personalassets."
`The Carmack thing concerns me a bit," Zoufonoun texted Zuck-
`erberg over WhatsApp the following day.
`"Yes, it concerns me too," Zuckerberg replied. As did the fact that
`he found Carmack to be "socially awkward in person" (and Kang to be
`"crazy").
`the speed at which Zuckerberg
`There was another concern too:
`wanted to close this deal. Leading Zoufonoun to text him at one point
`that "there is more risk in doing this quickly over a weekend without
`really digging in on their agreements, IP, et cetera."
`Zuckerberg replied,
`"Let's keep pushing forward until we have
`something we can sign on a moment's notice. Then we can figure out
`how long we wait for diligence."
`As desired, both sides pushed forward, and eventually Face-
`book agreed to indemnify Carmack. Additionally,
`Iribe and Laird
`Malamedboth
`of whom, by virtue of sitting on Oculus's board of
`directors, had been indemnified by Oculus since the Series A-were
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`BLUE'S CLUES
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`349
`
`ableto maintain similar indemnity provisions in their negotiation with
`Facebook (a detail
`that, at the time, may have seemed trivial,
`though
`that would soon after change).
`As for the additional up-front compensation that Kang had re-
`questedfor Carmack, members of Oculus's founding team were willing
`to sacrifice and defer payments in order to make that happen.
`Shortly after solving that
`reallocationon
`the afternoon of
`March 24-Mitchell
`texted Iribe to ask, "Did we get JC?"
`"Yes. Signed," Iribe wrote back. "Five minutes ago."
`"Mission Accomplished," Mitchell replied. Finally, after four nearly
`sleeplessdays of negotiation,
`it appeared a deal would be reached.
`within hours of that mission-accomplished message, there was an un-
`expected twist: Facebook's stock price dropped 4 percent on the day,
`which--due to how the deal had been
`structuredwould
`drop the
`acquisition price of Oculus to ever-so-slightly below $2 billi