Facebook has reached a definitive agreement to acquire Oculus VR, a leader in immersive virtual reality technology, for a total of approximately $2-billion.
This 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 21 March, 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.
Oculus is a leader in immersive virtual reality technology and has already built strong interest among developers, having received more than 75 000 orders for development kits for the company’s virtual reality headset, the Oculus Rift.
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,” says Facebook founder and CEO, Mark Zuckerberg. “Oculus has the chance to create the most social platform ever, and change the way we work, play and communicate.”
“We are excited to work with Mark and the Facebook team to deliver the very best virtual reality platform in the world,” says Brendan Iribe, co-founder and CEO of Oculus VR. “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.”
