Facebook on Tuesday announced that it had reached a definitive agreement to acquire Oculus VR, a leader in immersive virtual reality technology, for a total of approximately $2 billion. The transaction will ensure that Oculus VR team will have plenty of money to finish development of the ongoing virtual reality helmet and push it to the market. Facebook will get an ability to expand VR technology beyond gaming.
Oculus is the leader in immersive virtual reality technology and has already built strong interest among developers, having received more than 75 000 orders for its Oculus Rift VR helmet development kits. While the applications for virtual reality technology beyond gaming are in their nascent stages, several industries are already experimenting with the technology, and Facebook plans to extend Oculus' existing advantage in gaming to new verticals, including communications, media and entertainment, education and other areas. 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. Oculus has the chance to create the most social platform ever, and change the way we work, play and communicate," said Facebook founder and CEO, Mark Zuckerberg.
By acquiring Oculus VR, Facebook not only gains access to virtual reality technologies in general, but also becomes a significant player on the market of video games. With Facebook’s cash, it will be possible to provide incentives to game developers for creating VR games and lead the emergence of a whole new industry.
Oculus will maintain its headquarters in Irvine, California, and will continue development of the Oculus Rift, its ground-breaking virtual reality platform.
The $2 billion transaction 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 agreement also provides for an additional $300 million earn-out in cash and stock based on the achievement of certain milestones. The transaction is expected to close in the second quarter of 2014.