Summary:

Facebook’s acquisition of Oculus might seem strange at the outset, but it could have a big payoff in the not-too-distant future.

Facebook-in-the-future
photo: Gigaom Illustration

If the past month’s activity is any indication, Facebook and CEO Mark Zuckerberg are planning an ambitious roadmap. Tuesday’s acquisition of Oculus VR for $2 billion  shows that the company wants to ensure its longevity after social media has hit its saturation point. The  dive into virtual reality might seem rash in 2014, but it makes more sense a few years down the line.

So what might Facebook look like in 2020, with VR on its side? Here’s a couple of threads it could explore:

Double down on games

A more concerted effort in gaming is the most natural extension of the work that Oculus VR has already done Within a few years, the company could establish a cross-platform VR experience, offering a games platform similar to Valve’s Steam: cross-platform VR and social games available for purchase directly through the website.

Oculus reaffirmed its commitment to gaming in a blog post about the acquisition:

“Over the next 10 years, virtual reality will become ubiquitous, affordable, and transformative, and it begins with a truly next-generation gaming experience. This partnership ensures that the Oculus platform is coming, and that it’s going to change gaming forever.”

With a vibrant community already in place, Oculus could reinvigorate Facebook’s gaming platform and give it that little extra it needs to compete on mobile.

Oculus_Rift

Virtual reality communications and events

What Facebook’s really betting on, however, is Oculus’s success outside the gaming world. Mark Zuckerberg said in his post about the deal that he wants to take virtual reality to the next level — and  hopes it will be the next communication trend after mobile. Imagine a future where you could pop on a VR headset, plug into Facebook and watch a live concert or feel as if you’re face-to-face someone who lives across the country. Facebook could become not only a social media platform, but a broker of VR communications.

VC Fred Wilson wrote a blog post about Facebook’s decision to tackle VR, specifically that it’s about finding the “next big thing”:

“It isn’t clear if the next thing is virtual reality, the internet of things, drones, machine learning, or something else. Larry doesn’t know. Zuck doesn’t know. I don’t know. But the race is on to figure it out. Trillions of dollars of collective market capitalizations are on the line. So a couple billion here or there is chump change. Except for the people who collect that chump change for selling them an option on the next thing. It’s real money to us.”

If Facebook is right and the next big thing is VR, then the more the company focuses on integrating VR technology into its platform in all areas, the bigger the payoff could be by 2020.

Real Facebook hardware?

Perhaps the most important thing about Facebook’s acquisition of Oculus is that it also gained a highly capable hardware team. While Facebook has said Oculus will remain independent for the time being, the company might want to pursue branded hardware years down the line. The hardware aspect is also, arguably, the most “future-proof” part of the deal: in addition to CTO John Carmack, a pioneer in graphics technology in his own right, Oculus has a stable of engineers with backgrounds in mobile, robotics and many aspects of hardware design.

Even if VR ends up not being the cash cow Facebook hopes it will become, the team it has acquired will give Facebook the flexibility to pursue more hardware initiatives in-house, rather than relying on outside partnerships — like the one it forged with HTC to push mobile product — to make it happen.

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