Was a new virtual reality rig funded by suckers? The SEC mulls kickbacks for Oculus Kickstarter contributors.

• Author: Shackford, Scott

It's hard to look cool while wearing virtual reality goggles. Just ask all those 1990s dreamers who shelled out big bucks for subpar experiences that left them standing alone in the nation's rapidly emptying arcades, waving their arms like dorks.

While the bulky helmets of yore are long gone, the dream did not die. Meet Oculus Rift: a new virtual reality headset that has generated huge buzz in the gaming industry. In 2012, Oculus VR raised $2.4 million on Kickstarter after asking for just $250,000 to help get the headset from drawing board to factory. The head-mounted displays are not yet commercially available, but developers are already hard at work on scenarios in which players can observe the landscape just by turning their heads. And Oculus' potential goes beyond games: The headsets made waves at the annual South by Southwest festival this year when HBO used them to offer tours of the Game of Thrones kingdom Westeros. The goggles also work as 3D media players, and may have applications in medicine and defense as well.

The whole setup had the makings of a classic crowdfunding success story. The folks who ponied up cash were promised swag such as posters and T-shirts, plus first dibs on those early developers' kits. And as with all Kickstarters, the terms of the deal clearly state that donors don't get their money back; the payoff is the warm fuzzy feeling you get from supporting a cool project.

Then, in late March, Facebook bought Oculus for $2 billion, $400 million of which was cash. This may seem like a strange acquisition for Facebook--the technology is hardware, not some app that can be easily incorporated into the social network's current offerings. But Facebook CEO Mark Zuckerberg explained his strategy in a statement: "Mobile is the platform of today, and now we're also getting ready for the platforms of tomorrow. Oculus has the chance to create the most social platform ever, and change the way we work, play and communicate."

Online reaction to news of the sale was swift. Some of Oculus Rift's funders felt betrayed. The developer of Minecraft tweeted that he was canceling a deal to bring the game to Oculus Rift because Facebook "creeps [him] out." Reddit was full of rage about the sale. User "g roller" summed up the community's feelings nicely with a succinct "I wish I never kickstarted you."

At the tech blog ValleyWag, Joel Johnson--who donated $300 to the Oculus VR Kickstarter campaign-provided a more nuanced take. "I, as a...