Facebook To Get Deeper Into Gaming With Purchase Of Oculus
March 26, 2014

Facebook To Get Deeper Into Gaming With Purchase Of Oculus

Peter Suciu for redOrbit.com - Your Universe Online

On Tuesday Facebook “got real” when it announced that it had reached a definitive agreement to acquire Oculus VR.

The social networking giant announced that it would pay approximately $2 billion, including $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 stock over the past 20 trading days -- for the developer of virtual reality technology.

The transaction is expected to close in the second quarter of this year.

This latest acquisition follows Facebook’s $19 billion deal for messaging service WhatsApp, and according to Reuters, suggests that the world’s largest social network could be anticipating a shift in the evolving technology industry. Facebook was largely seen as slow to recognize the shift to mobile devices from the PC, but the new purchase suggests it is now focusing on the next big thing.

“Mobile is the platform of today, and now we’re also getting ready for the platforms of tomorrow,” Facebook founder and CEO, Mark Zuckerberg said in a statement. “Oculus has the chance to create the most social platform ever, and change the way we work, play and communicate.”

Under the terms of the deal Oculus will maintain its headquarters in Irvine, Calif. and will continue to develop the Oculus Rift virtual reality platform.

“We are excited to work with Mark and the Facebook team to deliver the very best virtual reality platform in the world,” said Brendan 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.”

Oculus VR launched a Kickstarter crowd-funded campaign last year, which raised $2.4 million for the company, and that followed with a $16 million Series A venture funding from Spark Capital and Matrix Partners to develop the Oculus Rift headset.

Reuters added that many in the industry now believe that wearable devices could represent the next big platform shift, as various tech giants have been developing wearable computers. The most notable is Google Glass, which features an electronic screen mounted to a pair of eyeglasses.

During a Tuesday conference call Reuters reported that Zuckerberg suggested that virtual reality could become the next social and communications platform.

“The history of our industry is that every 10 or 15 years there’s a new major computing platform, whether it’s the PC, the Web or now mobile,” he said. “We’re making a long-term bet that immersive, virtual and augmented reality will become a part of people’s daily life.”

However, the social network founder added that Facebook would not become a hardware company but rather the social network’s software and services could remain the company’s primary business, while it could generate revenue on future Oculus devices. This could include advertising to the sale of virtual goods.

Apparently not everyone is pleased with Facebook’s acquisition of Oculus VR.

The Washington Post reported on Wednesday that some early supporters of Oculus expressed concerns now that the social network is its owners.

“Virtual reality social network? Imagine the privacy issues there,” one commenter wrote as a response to Zuckerberg’s post on Facebook about the acquisition, as reported by the Washington Post.

Even some industry insiders seemed turned off by Facebook going into VR.

The paper added that Markus Persson, creator of the popular “Minecraft” game said, “We were in talks about maybe bringing a version of Minecraft to Oculus. I just canceled that deal. Facebook creeps me out.”