Facebook buys Oculus Rift company in a massive deal worth an estimated $2 billion
Social network Behemoth Facebook has acquired Oculus Rift developer Oculus VR in a massive deal worth an estimated $2 billion. Facebook founder Mark Zuckerberg announced the news today on, you guessed it, Facebook. You can read his full note below.
Facebook's deal includes $400 million in cash and 23.1 million Facebook shares, valued at $1.6 billion. The deal also includes a performance-based payout options, that could boost the sale by an additional $300 million in cash and stock if certain milestones are reached.
Oculus Rift may be popular with gamers, but Facebook plans to leverage the technology to other industries.
"Facebook plans to extend Oculus' existing advantage in gaming to new verticals, including communications, media and entertainment, education, and other areas," Facebook said in a statement. "Given these broad potential applications, virtual reality technology is a strong candidate to emerge as the next social and communications platform."
"Mobile is the platform of today, and now we're also getting ready for the platforms of tomorrow," Zuckerberg said. "Oculus has the chance to create the most social platform ever, and change the way we work, play, and communicate."
Oculus will remain headquartered in Irvine, Calif. The Facebook-Oculus VR deal is expected to close in the second quarter of 2014. Facebook will hold a call tonight at 6:15 EDT to discuss the sale. Check back later for more.
Oculus VR released a statement of its own on the deal, explaining the surprising news and what it means for the future of virtual reality.
"At first glance, it might not seem obvious why Oculus is partnering with Facebook, a company focused on connecting people, investing in internet access for the world and pushing an open computing platform," Oculus said. "But when you consider it more carefully, we're culturally aligned with a focus on innovating and hiring the best and brightest; we believe communication drives new platforms; we want to contribute to a more open, connected world; and we both see virtual reality as the next step."
"Most important, Facebook understands the potential for VR," the company added. "Mark and his team share our vision for virtual reality’s potential to transform the way we learn, share, play, and communicate. Facebook is a company that believes that anything is possible with the right group of people, and we couldn't agree more."
Finally, Oculus said in the next 10 years virtual reality will become "ubiquitous, affordable, and transformative."
Zuckerberg's full statement on the acquisition is below.
"I'm excited to announce that we've agreed to acquire Oculus VR, the leader in virtual reality technology.
Our mission is to make the world more open and connected. For the past few years, this has mostly meant building mobile apps that help you share with the people you care about. We have a lot more to do on mobile, but at this point we feel we're in a position where we can start focusing on what platforms will come next to enable even more useful, entertaining and personal experiences.
This is where Oculus comes in. They build virtual reality technology, like the Oculus Rift headset. When you put it on, you enter a completely immersive computer-generated environment, like a game or a movie scene or a place far away. The incredible thing about the technology is that you feel like you're actually present in another place with other people. People who try it say it's different from anything they've ever experienced in their lives.
Oculus's mission is to enable you to experience the impossible. Their technology opens up the possibility of completely new kinds of experiences.
Immersive gaming will be the first, and Oculus already has big plans here that won't be changing and we hope to accelerate. The Rift is highly anticipated by the gaming community, and there's a lot of interest from developers in building for this platform. We're going to focus on helping Oculus build out their product and develop partnerships to support more games. Oculus will continue operating independently within Facebook to achieve this.
But this is just the start. After games, we're going to make Oculus a platform for many other experiences. 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.
This is really a new communication platform. 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.
These are just some of the potential uses. By working with developers and partners across the industry, together we can build many more. One day, we believe this kind of immersive, augmented reality will become a part of daily life for billions of people.
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. I can't wait to start working with the whole team at Oculus to bring this future to the world, and to unlock new worlds for all of us."
Looks like Suckerberg is in the mood for shopping lately. What next? Facebook buys Nokia? Oh wait... somebody else already made that move.