Today Facebook did the unthinkable and announced that it will be acquiring OculusVR, makers of the Oculus Rift, for a hefty $2 billion in cash and shares. Facebook has made several acquisitions in the past, but this is the first time it has ever acquired a company that deals in hardware.
Facebook plans for OculusVR are more than just a plan to create video games, but a broader plan where social and other entertainment aspects are concerned.
From what we've come to understand, OculusVR will get $400 million in cash, and millions of Facebook shares that are worth around $1.6 billion. Furthermore, there's another $300 million in cash and incentives related to stock.
"Our mission is to make the world more open and connected. For the past few years, this has mostly meant building mobile apps that help you share with the people you care about," says Mark Zuckerberg in a Facebook post. "We have a lot more to do on mobile, but 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."
The Oculus Rift head mounted display has been a hit at several consumer electronic trade shows, and with developers.
OculusVR might be confusing to some since Facebook is a social network company with no experience in hardware. However, when everything is analyzed, it is clear that both companies are interested in connecting people and should work well together.
"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," says OculusVR. "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."
What we are witnessing here is a company that is stretching its legs from the comfort zone of pure software and into the hardware business. It's not the first time a software company has done something similar. Take a look at Google for a prime example of a software company being successful in the hardware business.
By purchasing OculusVR, Facebook is well ahead of other companies in this space. The future could see Facebook becoming the center stage for gaming using the Oculus Rift. With Facebook's deep pocket and the talented team at OculusVR, virtual reality might just become something worth being excited over.
We will leave you with something very interesting to think about here.
Microsoft owns 1.6 percent shares in Facebook. Could the Oculus Rift support Xbox in the future? Food for thought.