Facebook will buy the company behind the futuristic Oculus Rift virtual reality headset, according to a late Tuesday release from the company. The $2 billion deal includes $400 million in cash and about $1.6 billion worth of stock, for a product that doesn't really exist yet. The company also notes that the deal contains "$300 million earn-out in cash and stock based on the achievement of certain milestones."
In the release, Facebook outlines its reasoning behind the buy, which seems to come down to wanting to get in early on a developing market. They write: "Facebook plans to extend Oculus’ existing advantage in gaming to new verticals, including communications, media and entertainment, education and other areas." In other words, the social networking company is interested in more than just the headset's gaming capabilities. They add, "Given these broad potential applications, virtual reality technology is a strong candidate to emerge as the next social and communications platform."
As of now, however, those outside of the gaming community have probably never heard of the Oculus Rift, which made a kind of splashy debut in the industry over the past few months. That's partly because Oculus does not actually sell a product that to consumers yet. It even has some competitors, like the also dramatically named "morpheus" headset from Sony. Although the company is already shopping around development versions of the product, the commercial version of the Rift isn't even out in stores, but that's expected to happen later this year. Like the rest of Facebook's acquisitions strategy, it's a bet on the future, even more than the now.
In a statement, Oculus said:
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.
Most important, Facebook understands the potential for VR. Mark and his team share our vision for virtual reality’s potential to transform the way we learn, share, play, and communicate. Facebook is a company that believes that anything is possible with the right group of people, and we couldn’t agree more.
This article is from the archive of our partner The Wire.