The game is called Wicked Paradise and is being developed by "veteran game designers who worked on the likes of Rage, the Call of Duty series, Lost Planet, Madden and Planetside 2"
This is taken from the IGN article on the announcement, which you can find here
Wicked Paradise Official Site
We guess it was inevitable: veteran game designers who worked on the likes of Rage, the Call of Duty series, Lost Planet, Madden and Planetside 2 are working on an "Erotic Adventure" game for Oculus Rift.
Called Wicked Paradise, the game is based on the principle that "Instead of watching an erotic movie or reading an erotic book in which the main character has exciting sexual adventures, you become that character!
"Imagine playing Leisure Suit Larry but instead of watching a screen, you are inside the game," it reads. "Imagine the world and its inhabitants look highly realistic. Imagine walking into a bar in Wicked Paradise, noticing a beautiful lady, talking to her, and seducing her." You can guess the rest - there's more info on the official site.
This was always going to happen, we suppose. Wicked Paradise is planned to release in 2014, at the same time as the Oculus Rift itself.
This is taken from the IGN article on the announcement, which you can find here
Wicked Paradise Official Site
Here is a Sneak Peek about this game
http://www.roadtovr.com/2013/06/12/wicked-paradise-erotic-virtual-reality-game-for-oculus-rift-6494