Here's how it all went down, for those confused as to the role of Oculus, Valve, Zenimax, etc:
In the early 90's, John Carmack and Michael Abrash, in their early 20's, teamed up to make Quake. While together, they discussed the future of technology and both generally agreed that Virtual Reality would eventually become a viable medium and would be the next major paradigm shift, just like 3D acceleration was that they were working on at the time. Early VR at this time was clunky and generally did not work, so they shelved their research into VR.
Later, in the late 2000's, Palmer Luckey is an enthusiast who has worked in research VR before, who has an enormous VR headset collection. He posts on a forum called MeantToBeSeen3D, a forum for VR enthusiasts and electrical engineers. He outlines a cheap VR system that uses a phone as the primary display, dramatically reducing the cost of BOM.
John Carmack is actually a user on this forum at the time, still working at iD, posting under a pseudonym. Still a believer in VR, he's been posting on the site for years without people knowing. He sees Luckey's post and gets in contact with him. Luckey sends Carmack a prototype of his hardware, and Carmack begins modding Doom 3 to work with the hardware. The reason he does this is because it makes sense to take an existing game that already works to do rapid testing of hardware, rather than building a new game from scratch for testing. Using this build of Doom 3 to test the hardware, they tweak the design until the new VR system is stereoscopic - the previous prototype was only monoscopic. At this point, John Carmack goes to Zenimax and asks them to invest in VR game development, wanting Doom 3 to be a full VR game. Zenimax declines. Carmack asks them to research VR in any capacity, Zenimax declines.
Palmer Luckey, at this point, gets recognition because John Carmack demonstrates the prototype rift at Quakecon, where it's known as "Carmack's VR." Valve, who employs Michael Abrash, has been secretly researching VR (and AR through Jeri Ellsworth) for several years now. They begin collaborating with Palmer Luckey, who reveals his plan to kickstart the rift as a consumer VR development platform.
With help from Valve and John Carmack on the pitch video, Oculus raises several millions of dollars in kickstarter money to produce the Oculus Rift DK1. The Rift DK1 is based primarily on the original rift prototype design, using a 7" tablet screen instead of a cell phone screen. Valve demonstrates their "Valve room" prototype to Oculus and teaches them a few important concepts for VR that Oculus lacked:
-Sub-millimeter accurate positional Tracking
-Low persistence display to reduce blurring
-fresnel lenses for increased FOV
among other discoveries. Oculus begins integrating Valve's research into their product, which eventually became the DK2.
At this same time, frustrated by Zenimax's refusal to enter VR, either via game development or hardware research, John Carmack leaves the studio he founded to join Oculus as their Chief Scientist. It is around this time that Oculus enters Series A funding - Brandon Iribie is brought in as CEO. Palmer Luckey officially loses control of his company, and is relegated to "Founder" status. Venture capitalists take over Oculus.
Shortly after the series A funding, Oculus begins entertaining bids to buy the company outright, making billions for the venture capitalists. They show Mark Zuckerberg the Valve room demo during this time, and Zuckerberg is reportedly sold within a few hours of meeting Oculus. He famously decides to buy Oculus within 24 hours.
After buying Oculus, Zuckerberg tries to hire many of Valve's VR team away from the company. Michael Abrash winds up leaving valve for Oculus, but the vast majority of the team remains at Valve. Contact between Oculus and Valve ends. Valve eventually announces they will license their VR technology to hardware manufacturers to produce on their own. The first licensee is HTC, who announces the Vive. At the first tradeshow where Oculus Rift and Vive appear together, Oculus doesn't allow Valve employees to try their hardware, and vice versa.
After seeing Oculus bought for billions, Zenimax tries to sue Carmack and Oculus for "stealing" their "prototype" from zenimax (i.e. the mod of doom 3). And that basically leads us to where we are today.
