Facebook Inc.’s Oculus Rift is exploring the movie space with the launch of a new entertainment in-house studio called Oculus Story Studio. The studio’s focus will be on making virtual-reality films. Their debut piece premiered yesterday, Monday December 26, at the Sundance Film Festival.

“This is really tuning in to what a lot of people who are extending 360-degree film into VR cannot do yet,” Oculus’ Chief Executive Brendan Iribe said. “It’s getting into the heart and soul and magic of VR.”

The first project is a three-and-a-half to ten-minute interactive film called “Lost”; the first of five short animated films, which they will produce over the next year. Former Pixar artist, and now current creative director of Story Studios, Saschka Unseld, directed “Lost”. The viewer is placed into a forest scene with a mechanical creature, with the film displayed on a new device prototype called the “Crescent Bay”. This same prototype was on display at the Consumer Electronics Show earlier this month.

“A real-time version of a Pixar experience that you’re inside of,” said Iribe, describing the experience.

At this stage the film studio team is comprised of approximately 10 people, including individuals who have worked at Lucasfilm and Pixar Animation Studios.

Oculus has made a giant leap forward for virtual-reality devices since their launch. After launching in 2012, Oculus went from a $2.4 million kickstarter campaign in September 2012 to a $2 billion acquisition by Facebook in July 2014.

With this move from Oculus we are likely to see their competitors following suit in the not too distant future. Sony Corp. has shown off their virtual reality headsets with their Project Morpheus and Samsung Electronics Co. Ltd. joined the party when they collaborated with Oculus technology and launched the Gear VR. Not to be left out Microsoft Corp. launched their HoloLens last week, however they could face some limitations when it comes to movie streaming, which may not affect the other competitors.

The size of the Oculus Story Studio could grow significantly. It all depends on the success they achieve with the “Lost” film at the Sundance Film Festival this week.

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