Updated: Facebook buys Oculus VR for $2 billion

Updated: Facebook buys Oculus VR for $2 billion

Facebook is purchasing Oculus VR, maker of the Oculus Rift virtual reality.

The deal is worth approximately $2 billion (about £1.2b, AU$2.1b), and an additional $300 million (about £181m, AU$327m) in earn-out cash and stock will be paid for hitting “certain milestones.”

In a press release, Facebook highlighted Oculus’ leadership in the virtual reality, but noted it plans to help take VR beyond gaming and into spaces like communications, media and entertainment, education and more.

During a call with investors, Facebook CEO Mark Zuckerberg said virtual reality “has potential to be the most social platform ever.”

The company has focused on pushing into mobile, and Zuckerberg said that more than 20% of peoples’ time spent on their phones is spent on Facebook. Now, the social network wants “to start working on the next major computing platform.”

“Mobile is the platform of today, and we’re starting to get ready for the platforms of tomorrow,” he said.

What happens to Oculus

Oculus VR will stay in its Irvine, Calif. headquarters and will continue making the Oculus Rift. During last week’s GDC, the company unveiled its latest version of the headset, Development Kit 2 or DK2.

According to Zuckerberg, Oculus’ has “big plans” on the immersive gaming front that aren’t going away. In fact, Facebook hopes to accelerate them.

The deal is expected to close in the second quarter of 2014. The announcement comes just over a month after Facebook revealed it was purchasing WhatsApp for a cool $19 billion.

During the investor call, Zuckerberg called the Oculus acquisition “a long-term bet on the future of computing.” He said the most exciting developments are happening around vision, and referred to Oculus VR as the clear leaders in the space.

Facebook seems unphased by the fact that Oculus has yet to ship a commercial Rift headset, or that others, like Sony, are making forays into the VR space.

Zuckerberg said that not only is Oculus “far ahead” of other purveyors of VR, he’s ready and willing to see the tech mature over the next 5-10 years.

As for a concern many are likely feeling, Zuckerberg admitted advertising could be a way to monetize Oculus headsets “down the line.” Calling Facebook a software and services business, he said the ability to purchase virtual goods with Rift may also be an option.

However, “for the foreseeable future, we see building out the product, making it affordable, making it ubiquitous and [building the] technology as quickly as possible” will be Facebook’s goals for the tech.

Beyond gaming

In a Timeline post, Zuckerberg highlighted Oculus Rift’s ability to transport wearers to a new space, one where they feel “actually present” with other people.

Immersive gaming experiences aren’t going away, and Zuckerberg reiterated that his company will help Oculus “build out their product and develop partnerships to support more games.”

But games are only the start; Facebook will help turn Oculus into a platform “for many other experiences,” from feeling like you’re sitting court side at game, studying in a classroom with students and teachers around the world, or consulting with a doctor.

“This is really a new communication platform,” Zuckerberg continued. “By feeling truly present, you can share unbounded spaces and experiences with the people in your life. Imagine sharing not just moments with your friends online, but entire experiences and adventures.”

Oculus has grown from foam prototypes a mere 18 months ago to over 75,000 dev kits ordered.

Oculus CEO Brendan Iribe wrote in a blog post, “Facebook understands the potential for VR,” and shares Oculus’ vision for VR to “transform the way we learn, share, play and communicate.”

Iribe continued that the new partnership is “one of the most important moments for virtual reality,” one that “gives us the best shot at truly changing the world.”

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