Facebook buys Oculus VR for $2 billion, plans to make 'platform for many other experiences'

Facebook has purchased virtual reality company Oculus for $2 billion, the creator of the Oculus Rift headset that has been leading the VR space

Facebook plans to extend Oculus' existing position in gaming to new verticals, including communications, media and entertainment, education, and more. Gaming won't be ignored though, Facebook confirmed. 

"After games, we're going to make Oculus a platform for many other experiences," Mark Zuckerberg, CEO and founder of Facebook, said. "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."

Hands-on: Oculus VR Crystal Cove prototype

Oculus will maintain its headquarters in Irvine, CA, and will continue development of the Oculus Rift, Facebook said. 

"This is really a new communication platform," Zuckerberg said. "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."

The Oculus Rift is a head-mounted display that features a high-resolution OLED display within, that totally encompasses your vision regardless of where you move your head and that makes you believe that you are in whatever world you are virtually in.

It was previously announced the consumer version of the Oculus Rift will be released in late 2014 or early 2015. Neither Oculus nor Facebook confirmed how the acquisition will affect the timeline. 

Facebook says it will help Oculus accelerate its current plans for gaming VR, and give it support to gain more partnerships for games. "The Oculus team can focus on what we do best," Brendan Iribe, co-founder and CEO of Oculus VR, said. "We're teaming up with Facebook to invent the future."

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

The $2 billion deal 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 people at Oculus also have the opportunity for an additional $300 million earn-out in cash and stock based on the achievement of certain milestones.

Speaking on a conference call, Zuckerberg expressed that with the acquisition, Facebook is getting a jump start on the next big industry. Now that mobile has begun to stabalise, the executive said he believes VR is the next major computing platform after mobile.

"We are getting ready for the platform of tomorrow," Zuckerberg said. "Oculus has the chance to be the most social experience ever."

The acquisition is expected to close in the second quarter of 2014. 



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