Facebook intends to acquire virtual reality hardware company Oculus VR for $2 billion, a price that consists of approximately $1.6 billion in stock and $400 million in cash, it said in a press statement Tuesday.
“Mobile is the platform of today, and now we’re also getting ready for the platforms of tomorrow,” said Facebook founder and CEO Mark Zuckerberg in the statement. “Oculus has the chance to create the most social platform ever, and change the way we work, play and communicate.”
Oculus made a big splash two years ago when it launched a blockbuster Kickstarter campaign to fund its first product, the Rift. Since then, the company has been actively selling Developer Kits (though no consumer model has made it to market), and grabbing attention at tech trade shows — particularly with its latest product, Crystal Cove. Oculus has also managed to attract big names — including idSoftware founder and gaming icon John Carmack — and money, most recently in a $75 million round led by Andreessen Horowitz.
During a conference call Tuesday afternoon, Zuckerberg said that purchasing Oculus means Facebook has now made an “ambitious, long-term bet” on each of its three long-term goals: connecting everyone, understanding the world and building the knowledge economy. He named Internet.org and Facebook’s artificial intelligence research group as the other two bets.
Zuckerberg said that he sees Oculus as an opportunity to move beyond the console and toward ubiquitous computing. He doesn’t expect Facebook to make money off of selling Oculus hardware; instead, it might become a ubiquitous world for communication that might contain advertising.
In the near future, he said the goal is to build out Oculus and make its platform affordable and ubiquitous. He declined to comment on when a consumer model of the Rift will be released.
He described Oculus as a “rare” company that has a lead on the rest of the virtual reality industry, which is only just now becoming possible because of the technology available from mobile phones.
“Folks can now start to reuse components — that are being mass produced for phones at low prices — that are small enough and powerful enough that you can repurpose to do the really intense graphics work to render a full world that will not make someone motion sick,” Zuckerberg said. “That is why I think it’s possible now and why it’s going to be exciting now.”
Zuckerberg’s Facebook status update about the acquisition provided a little more color about the company’s intentions with Oculus, particularly in expanding it beyond gaming.
“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,” he explained.
According to a blog post from Oculus, Zuckerberg began discussions with the company months ago, offering the support to grow the technology rapidly:
At first glance, it might not seem obvious why Oculus is partnering with Facebook, a company focused on connecting people, investing in internet access for the world and pushing an open computing platform. But when you consider it more carefully, we’re culturally aligned with a focus on innovating and hiring the best and brightest; we believe communication drives new platforms; we want to contribute to a more open, connected world; and we both see virtual reality as the next step.
The transaction is expected to close in the second quarter of 2014. The deal comes a month after Facebook acquired mobile messaging app WhatsApp for $16 billion.