Could virtual reality be the next big thing? Facebook’s Mark Zuckerberg seems to think so. Aiming to build the communications platforms of the future, Facebook recently acquired virtual reality company Oculus for $2 billion.
The deal includes $400 million in cash, 23.1 million shares of Facebook common stock and the opportunity for Oculus to earn an additional $300 million in cash and stock if it meets certain milestones. The transaction is expected to close in the second quarter of 2014.
Oculus builds immersive virtual reality experiences, most notably the Oculus Rift headset, for which Oculus has already received 75,000 development kit orders.
Virtual Reality Is the Future of Technology
Though it wasn’t not immediately apparent why Facebook would want to acquire Oculus, Zuckerberg made it clear that he views virtual reality as the technology of tomorrow:
Virtual reality was once the dream of science fiction. But the internet was also once a dream, and so were computers and smartphones. The future is coming and we have a chance to build it together.
Oculus will maintain its headquarters in Irvine, CA, and continue working independently of Facebook, though initially Facebook will help Oculus accelerate its plans to change the face of immersive gaming. Down the line Zuckerberg hopes that Oculus will become a platform for other experiences, including communications, entertainment, healthcare and education. “Imagine enjoying a court side seat at a game, studying in a classroom of students and teachers all over the world or consulting with a doctor face-to-face – just by putting on goggles in your home,” he wrote in a public post on Facebook.
The Oculus team has expressed its excitement about the deal, citing the companies’ common values as the cornerstone of their partnership. More importantly, though, Oculus sees the acquisition as the act that will truly set a virtual reality takeover in motion. The team wrote:
This partnership is one of the most important moments for virtual reality: it gives us the best shot at truly changing the world. It opens doors to new opportunities and partnerships, reduces risk on the manufacturing and work capital side, allows us to publish more made-for-VR content and lets us focus on what we do best: solving hard engineering challenges and delivering the future of VR.
Worries Among Oculus Rift Backers
The Oculus Rift was initially crowdfunded on Kickstarter, receiving an astounding $2.4 million in pledges for its comparatively paltry $250,000 goal in September 2012. After hearing news of the acquisition yesterday, backers began expressing their sadness and anger about the acquisition, accusing Oculus of “selling out” to Facebook:
Just like when Facebook’s WhatsApp acquisition caused users to worry that their service would change or be used to serve ads, Oculus can’t do much more to assure backers that the Facebook acquisition isn’t poison than reiterate that its immersive gaming technology is still its top priority. Only time will tell, though, if the Rift’s immersive gaming experience will still receive as much attention as promised.
Regardless of what happens with Oculus’ gaming plans, though, Facebook is going to push the technology to new communications and advertising ends. “Oculus has the chance to create the most social platform ever, and change the way we work, play and communicate,” Zuckerberg said. Hopefully in the meantime we all won’t become cyborgs addicted to virtual reality headsets!
What do you think of the Oculus acquisition?