Facebook Acquires Oculus VR for $2 Billion
posted Sunday Mar 30, 2014 by Nicholas DiMeo
Facebook has officially entered every realm of our lives, as if the company has not done that already. By announcing its plan to acquire Oculus VR, the company responsible for the Oculus Rift, Zuckerberg's now entered not only our reality but our virtual reality. And he's done it for a mere $2 billion in cash and stock. $400 million of the total purchase will come in cash, along with 23.1 million Facebook shares. Another $300 million will be handed out in both stock and cash if Oculus hits undisclosed benchmarks and goals that Facebook set forth.
Zuckerberg made the announcement this week in a conference call, followed by a post on his Facebook page, naturally. No word on if he has to pay to promote his posts.
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.
In his post, he also mentions future plans of blending your entire life together by just "putting on goggles at home" and no longer needing to leave the house to do anything. And if you really think about it, it makes a lot of sense why Facebook picked up Oculus VR. All jokes aside, people spend a lot of time on social media, be it on mobile or at a computer. Now, instead of just connecting to your favorite sites and activities in the real world, you can achieve that in the virtual world, so of course Facebook would want a huge part in your alternative virtual lifestyle as well.
Now what does this mean for Oculus? Well, according to the company's blog post on the acquisition, Facebook has been talking with the crew at Oculus for a few months now. With 75,000 development kits already ordered and popularity reaching a national level, great things have come to the company in the past 18 months. Oculus seems to be riding the wave of success with such a large acquisition and with that, the virtual reality start-up says it gives the developers the "best shot at truly changing the world." And, until the Facebook culture changes their mentality, I fully believe and support these values and mission.
While Oculus VR and Facebook are extremely happy about this, obviously there are some not-so-happy campers related to the news. Specifically, Kickstarter backers of Oculus VR and the Rift who are now demanding their money back because they don't support Facebook. Now that Oculus VR has "gone corporate", many backers feel that they're owed something. Funny enough, some even thought that they were backing a "hobby and (someone who) just wanted to do something fun for the community." Sure you were.
So they've taken to the streets of social media, including Facebook, to voice their concerns. However if you're keen on the rules of crowd-funding, Kickstarter donors do not get any special returns in cases of a buyout or some type of major investment funding and they surely do not have a say in the financial or operational ends of the company's business. At any rate, Oculus VR was able to gain $2.4 million in donations from over 9,500 different people and over $90 million in venture capital funding in under 24 months. That is one of the reasons the group was able to pick up a $2 billion valuation from Facebook.
Of course there are some defending Kickstarter backers as well, and they've also voiced their concerns in several outlets, saying that the company will now have more means to produce the great product that everyone has supported up until now. A lot of people agree with that sentiment, however fear that something like a very annoying Facebook logo with irrelevant ads will show up in their virtual view.
Things like that are what scared Minecraft founder Notch from continuing to work on a version of Minecraft to Oculus. He quickly took to Twitter to say that,
We were in talks about maybe bringing a version of Minecraft to Oculus. I just cancelled that deal. Facebook creeps me out.
At any rate, all of this is still very new and a lot of dust will have to settle to see if Oculus VR will remain true to its initial vision: to actually change the world through virtual reality. Until then, we await the approval of the $2 billion acquisition and hope that people don't lose faith just yet in a pretty great product. If that happens, however, it might play perfectly into Sony's hands, which are currently juggling money and staff problems in one hand and VR competitor Project Morpheus on the other.