Facebook acquires virtual reality company Oculus VR for $2 billion

Sergey Orlovskiy testing Oculus Rift
Sergey Orlovskiy testing Oculus Rift

Facebook has announced it has reached an agreement for the purchase of Oculus VR, Inc., producer of the virtual reality head-mounted display Oculus Rift, for a total of about $2 billion. The figure includes $400 million in cash and 23.1 million shares of Facebook common stock. The agreement also includes an additional $300 million in cash and shares based on the achievement of certain goals that weren’t specified in the press release.

Oculus VR was founded by Palmer Luckey, who describes himself as a virtual reality enthusiast and a geek. A campaign on Kickstarter helped fund the development of Oculus Rift, which is basically a helmet equipped with a display (Photo ©Sergey Galyonkin). The result was extraordinary, with over $2.4 million raised. More funding came from other sources.

During the development of Oculus Rift, the company also hired John Carmack, one of the founders of the famous game producer id Software. One of the intended uses is exactly for gaming and a prototype has been tested with Doom 3 BFG Edition. The developer Oculus Rift kit has been a great success in 2012 though the people who preordered it knew that it would be shipped only after several months.

In a few months, the DevKit 2, a new version for developers, is expected to be available. A version for common consumers is in development, capable of reaching a 1080p resolution. But now came the announcement of the acquisition by Facebook.

Mark Zuckerberg, Facebook’s founder and CEO, stated that Oculus VR represents for them the opportunity to create a platform more social than ever. The idea is to change the way people work, play and communicate. Zuckerberg isn’t interested in videogames only but in media in general, in which the boundary between real and virtual is becoming more and more blurred.

Applications of the Oculus Rift outside of the field of videogames are yet to be explored. Of course, Facebook wants to overcome the augmented reality of Google Glass with a virtual reality system. But those are two different things: Google Glass can be worn in normal everyday life, even while walking down the street, Oculus Rift is a system that insulates the wearer from the outside world, with all its consequences.

The reactions to the acquisition were diverse. Markus Persson, the creator of Minecraft, stated that he canceled plans to bring his game to Oculus Rift. The reason is that he thinks Facebook is a company that cares only about user numbers and that creeps he out.

Mark Zuckerberg has made another bet with the purchase of Oculus VR and in this case it will take longer than the previous acquisitions to see if it’s a success. Facebook has the resources to pursue a long-term plan so we can expect a few surprises.

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