John Carmack quit id Software because parent company ZeniMax Media wouldn't agree to let games he was working on appear on the Oculus Rift virtual reality headset.
In an interview with USA Today, developer legend Carmack revealed he would have stayed at id if he had been allowed to make the likes of Wolfenstein: The New Order and Doom 4 work on the Oculus Rift.
Carmack, who last year joined Oculus VR as chief technological officer, said of the proposed deal: "It would have been a huge win.
"It seemed like a sensible plan for me."
ZeniMax declined comment when approached by USA Today.
Carmack announced in August that he had joined Oculus VR but insisted at the time he would work at both the headset maker and at id Software. Later, in November, he said he had quit id - the studio he co-founded in 1991 - to work at Oculus full-time.
But if ZeniMax had approved his proposal, Carmack would have continued to work at both id and Oculus, Carmack said.
"I would have been content probably staying there working with the people and technology that I know and the work we were doing," he said.
"But they couldn't come together on that which made me really sad. It was just unfortunate. When it became clear that I wasn't going to have the opportunity to do any work on VR while at id Software, I decided to not renew my contract."
As for id, its annual QuakeCon event is set for July this year. Will Carmack make an appearance?