Facebook closes its $2bn Oculus Rift acquisition. What next?
Facebook now owns virtual reality startup Oculus VR, after closing the $2bn acquisition, which was announced by the two companies in March.
The social network is paying $400m in cash plus 23.1m Facebook shares for the maker of the Oculus Rift headset, with a further $300m in incentives if it hits certain milestones in the future.
So what now? Will Oculus VR expand beyond its current focus on games? When will the Rift – currently available to developers – go on sale to the rest of us? Is Facebook going to stuff ads into virtual worlds and mine them for our data? And is this finally virtual reality’s big moment, after plenty of hype but also disappointment in the past?
Facebook’s decision to spend two Instagrams (or, alternatively, 0.1052 WhatsApps) on Oculus VR has unsurprisingly sparked plenty of debate. Here are some answers to some of the key questions.
Why is Facebook buying Oculus?
Partly because Mark Zuckerberg is rich and powerful, and because he can. After going public, and with a burgeoning online ads business, Facebook is flush with cash, but the control its chief executive retains over the company means he can splash millions on startups.
The uncharitable view is that Oculus VR is a boy’s toy for Facebook’s still-youthful CEO: he tried the Rift, and loved it so much he bought the company. Unsurprisingly, Zuckerberg himself says it’s more a long-term strategic bet on the future for social networking.
“At this point we feel we’re in a position where we can start focusing on what platforms will come next to enable even more useful, entertaining and personal experiences,” he wrote in a status update as the acquisition was announced in March.
“With Oculus, it’s that they’re the clear leader in something that has the potential to be the next important, or one of the next most important computing platforms,” he told analysts later that day.
Does this mean Oculus VR is giving up on games?
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Not for now: a point that has been stressed by both Zuckerberg and Oculus VR’s co-founders from the moment the deal was announced – sensing the likely worries of developers who’ve already invested money (on a Rift devkit) and time (on making games for it).
“Oculus already has big plans here that won’t be changing and we hope to accelerate,” wrote Zuckerberg, outlining plans to keep Oculus as an independent entity under Facebook’s umbrella – an arrangement similar to Instagram and WhatsApp.
“The Rift is highly anticipated by the gaming community, and there’s a lot of interest from developers in building for this platform. We’re going to focus on helping Oculus build out their product and develop partnerships to support more games.”
For their part, Oculus VR’s founders maintained their commitment to games too. “Over the next 10 years, virtual reality will become ubiquitous, affordable, and transformative, and it begins with a truly next-generation gaming experience,” they wrote in their own blog post.
“This partnership ensures that the Oculus platform is coming, and that it’s going to change gaming forever.”
What else does Facebook want Oculus for?
Some analysts snorted at the deal when it was announced in March, pointing out that the games Facebook is most closely associated with – FarmVille, Candy Crush Saga etc – are a world away from the immersive, 3D games that developers hope to create for Oculus Rift.
Zuckerberg claimed his eye was on a much bigger picture, though. “This is just the start. After games, we’re going to make Oculus a platform for many other experiences,” he wrote.
“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.”
In other words, Facebook is buying Oculus VR because it hopes developers will create lots of non-gaming experiences for it too, with social networking (and, ultimately, advertising) built in.
“By feeling truly present, you can share unbounded spaces and experiences with the people in your life. Imagine sharing not just moments with your friends online, but entire experiences and adventures,” he wrote.
“These are just some of the potential uses. By working with developers and partners across the industry, together we can build many more. One day, we believe this kind of immersive, augmented reality will become a part of daily life for billions of people.”
When quizzed by analysts, Zuckerberg compared virtual reality to smartphones, suggesting that just as new apps emerged for mobile devices that hadn’t previously made sense on PC, so VR will spark new ideas.
“I think you’re going to see that and it’s going to take a while for that to develop, which is partially why I think this is a five-plus year thing,” he said. Read more here
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