Facebook Buys Virtual Reality “Platform Of Tomorrow” Oculus For $2 Billion In Cash And Stock
Facebook has just acquired “the platform of tomorrow.” The company announced this afternoon that it was acquiring Oculus — the company behind the Oculus Rift virtual reality (VR) gaming headset and platform — for $2 billion in cash and stock:
Facebook today announced that it has reached a definitive agreement to acquire Oculus VR, Inc., the leader in immersive virtual reality technology, for a total of approximately $2 billion. This includes $400 million in cash and 23.1 million shares of Facebook common stock (valued at $1.6 billion based on the average closing price of the 20 trading days preceding March 21, 2014 of $69.35 per share). The agreement also provides for an additional $300 million earn-out in cash and stock based on the achievement of certain milestones.
Right now Oculus is essentially a gaming company. And VR gaming could become a major industry and money maker for Facebook. But there’s much more going on in this acquisition.
Facebook CEO Mark Zuckerberg and his team have a much bigger vision for the technology and its future than simply gaming. They see Oculus as the basis of a new computing, social experience and communications platform. There will also likely be a range of commerical or enterprise applications.
According to the press release:
“Mobile is the platform of today, and now we’re also getting ready for the platforms of tomorrow,” said Facebook founder and CEO, Mark Zuckerberg. “Oculus has the chance to create the most social platform ever, and change the way we work, play and communicate.”
“We are excited to work with Mark and the Facebook team to deliver the very best virtual reality platform in the world,” saidBrendan Iribe, co-founder and CEO of Oculus VR. “We believe virtual reality will be heavily defined by social experiences that connect people in magical, new ways. It is a transformative and disruptive technology, that enables the world to experience the impossible, and it’s only just the beginning.”
In a sense, this is Facebook moving off the screen and into the (virtual) world. More details will come out in the next 24 hours. It’s a fascinating move that will both confuse and excite investors on Wall Street.
Below is a demo of Oculus Rift as a gaming experience.