Oculus VR Acquired by…Facebook?

By March 25, 2014 March 24th, 2020 News

MENLO PARK, CALIF. – March 25, 2014 – Facebook today announced that it has reached a definitive agreement to acquire Oculus VR, Inc., the 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 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.

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 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,” said 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,” said 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.”

Oculus will maintain its headquarters in Irvine, CA, and will continue development of the Oculus Rift, its ground-breaking virtual reality platform.

The transaction is expected to close in the second quarter of 2014.

Join the discussion 15 Comments


  • budwheizzah says:

    A sad, sad and scary day for VR.

  • Avatar android78 says:

    Not sure how I feel about this. Good for Palmer and the team, I guess. I’m just worried that with all of the ‘content partnerships’, we’ll see far too many farmville VR type ‘experiences’. Wait and see though.

  • geekmaster says:

    I usually do not survive corporate buyouts, because VIPs in the new parent corp get bummed out that I get more vacation and a bigger paycheck than their high-level managers.

    I wonder how many brilliant minds will get “kicked to the curb” as a result of this buyout. I hope none, because this VR renaissance NEEDS all the best and brightest minds.

  • Avatar android78 says:

    >
    Could be for the best… maybe they’ll go over to Sony which should accelerate the production of a quality consumer HMD? Trying to look on the bright side.

  • Avatar mindless says:

    How disappointing. While this is another validation that vr is about to go to go mainstream. Facebook has literally just killed my interest in oculous. I shall now be looking elsewhere for my vr fix.

  • budda says:

    Hi,

    Its not April 1, so the news that Oculus is being taken over by Facebook seems real.

    This is not really a surprise.

    I wrote an article about this very subject, one year ago on 2 March 2013 in MTBS Forums.

    http://www.mtbs3d.com/phpBB/viewtopic.php?f=140&t=16561&p=103463&hilit=oculus#p103463

    >

    Maybe the most successful product of Oculus Rift is the company itself. Take the money and run …. fast. Good luck and congratulations boys.

    I am sure Facebook will not be throwing this much money at Oculus without a few hard-headed caveats. But its not unprecedented for companies like Google to deep six projects that they get bored with.

    Thanks.

  • mojopball says:

    I’ll say upfront, that I am not a fan of this. I didn’t have the funds for the Kickstarter Dev Kit 1 initially, but did for Dev Kit 2 and ordered it (and have followed Oculus since day 1). I completely understand that Palmer thinks this will push VR forward faster then it could have without the acquisition, but it betrays the spirit of how the company was founded. Yes, the investment rounds after the Kickstarter contributed financially, but as far as the community was aware, day to day operations were still under Palmer and crew. With the facebook acquisition, they may convince you that it will be business as usual, but looking back at most major corporate acquisitions, how can we believe that? The underlying goal of Oculus from this point forward will be to MAKE MONEY for facebook. They may lose money in the short term and snake charm Palmer into thinking he has control, but the long term goal of facebook is to bankroll profits. It is no longer a company that wants to bring VR to the market because it loves VR, believes in VR and has it’s heart and soul in VR. This is what the entire community has a problem with. The community made Oculus happen and now we feel helpless to the juggernaut interest that is facebook. The independent spirit is gone, the small guy making VR happen is also gone. Facebook may push VR into every home years before it could have happened, but it misses the point. People that believed in VR were making VR happen. It was close, personal and meant the world to us, even when everyone we know made fun of us when we tried to describe, defend, and explain it to them. The soul of VR is lost. I still think it will happen but not in the way it should have.

  • Avatar cybereality says:

    Honestly, I think it’s a good thing. We always wanted to bring VR to the masses, and this is going to allow us to do that. The $75 million was great, but honestly was not going to take us to the consumer market where we hope to sell millions of kits. The money had to come from somewhere. Whether it’s private investors or a big company like Facebook, it was going to be someone.

    After hearing Zuckerberg talk about the deal, it was clear to me that he shares the same vision that Palmer and all the rest of us have for VR. I don’t think they would have paid the money if they didn’t believe our dream. This is not about making Farmville VR or forcing you to login with Facebook. I really believe we are going to build the Metaverse or the Oasis, or whatever you want to call it.

    With the help of Facebook we are going to have the funds and the resources to go out and make the consumer Rift the best possible product it could be, and get the developers to make the content, and promote and advertise it in a way not possible as a little independent start-up. I think this is a bold move, but one that will make for the best outcome for bringing VR to the mainstream.

  • Avatar FR3D says:

    While using the „Facerift“ – it will post everything to Zuckerberg and NSA .
    And we have to watch advertising while using the “Facerift”.
    The oculus rift sold its soul.
    Not for me – I will switch to playstation ….

    best regards FR3D

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