News | Tech

Facebook buys virtual reality company Oculus in $2bn deal

 
Looking ahead: Facebook made the purchase of Oculus for $2bn
Standard Reporter
26 March 2014

Facebook has agreed to buy virtual reality technology company Oculus in a $2billion deal, the social media giant confirmed today.

Oculus are the makers of virtual reality headset the Oculus Rift, a techology development that has been attracting huge interest from video game makers.

Facebook says that while applications for virtual reality technology beyond gaming are "nascent," it plans to extend it to other uses. These include communications, media, entertainment and education.

Chief Executive Mark Zuckerberg said: "This is a long-term bet on the future of computing. Imagine sharing not just moments with friends online but entire experiences and adventures."

The purchase follows Facebook's £11.4bn deal to purchase messaging startup WhatsApp last month.

I don't think you should expect us to make multiple multibillion-dollar acquisitions within a couple months frequently," Mr Zuckerberg said.

Read More

Facebook said the deal includes £241.9million cash and 23 million shares worth a total of £967m, with Oculus staff also eligible for an extra £181.4m if certain targets are met.

But he called Oculus a "unique" company with a major lead on rivals in technology, engineering talent and developer interest. Sony Corp. unveiled its own prototype virtual reality headset at a game-developers conference in San Francisco last week.

Mr Zuckerberg said virtual reality technology is a computing platform unto itself, comparing it to personal computers, which revolutionized the world in the 1970s and 1980s, and mobile phones.

Facebook Chief Financial Officer David Ebersman said Oculus was valued based on the expected returns from the video game industry alone, with a higher return expected if it can expand into communications, entertainment or other fields.

Mr Zuckerberg said Facebook intends to let Oculus continue with its roadmap of development but help out with recruiting, marketing, infrastructure and opening doors to new partnerships. He said he intends not to make a profit on hardware but instead make the product affordable and ubiquitous so Facebook can look at generating revenue from services, software, advertising, virtual goods or other areas.