The news of Facebook‘s acquisition of Oculus VR for $2 billion dollars is rippling across the Internet today. What does it all mean, for virtual reality, social media, and the future of VR gaming?
Usually, when these big companies buy out the latest, hippest, happening thing in the technology, gaming, or social media markets, the first fear is that the big company will screw up the very qualities that made that acquisition so attractive.
Just look at some of the recent purchases that have spelt doom for any future the product might have had.
- Sparrow – Google bought Sparrow and basically shut it down.
- Vizify – Yahoo! bought Vizify and did the same thing.
It’s just a painful fact that many companies that get bought out get changed in ways that impact the final product, often warping it beyond recognition. Could this be the fate of Oculus over at Facebook?
Let’s look at the facts. Facebook does have a decent track record with continuing their acquisition’s growth and development, Instagram is still going strong with new features continuing to improve the product and WhatsApp continues to act as an independent company with new updates and features.
Facebook’s Mark Zuckerberg says:
Mobile is the platform of today, and now we’re also getting ready for the platforms of tomorrow. Oculus has the chance to create the most social platform ever, and change the way we work, play and communicate.
Let’s talk money for a moment. Not the buying price, although let’s quickly review it:
$2 billion total buyout price that includes:
$400 million in cash
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).
Additional $300 million earn-out in cash and stock based on the achievement of certain milestones.
What Facebook does bring to the table is boatloads of cash. Cash that will enable the creative geniuses over at Oculus VR to bring a product to market much more quickly. When you consider that the main competition for Oculus VR is Sony‘s Project Morpheus, it’s easy to see that Oculus VR is up against a strong, financially sound and game savvy opponent.
Oculus needed this Facebook boost to not only get to market first, but to stay at the head of a market that will soon be surrounded by strong competition. We all know that first to market often leads to a short-lived monopoly of the market. Facebook’s deep pockets gives Oculus some staying power.
The payoff for Facebook will happen when, and if, they can translate their current social media platforms into the Oculus VR experience. Their thinking well beyond games, Facebook is thinking communications, social media, entertainment, and most importantly education. Imagine what could be taught using the Oculus VR experience.
Here’s a video example of some Game of Thrones cast members experiencing the Oculus VR System:
Oculus has over 75,000 orders for development kits for the virtual reailty headsets, called the Oculus Rift. Has the buyout announcement effected any of Oculus VR’s current business deals? There was one Tweet after the announcement that has been flying around the internet. Minecraft guru Markus Persson had this to say:
We were in talks about maybe bringing a version of Minecraft to Oculus. I just cancelled that deal. Facebook creeps me out.
— Markus Persson (@notch) March 25, 2014
Will this attitude about Facebook spread to other game developers, or will most just see dollar signs? We’ll see some more reactions from those in the industry as the dust settles on the deal.
Here’s the Oculus overview video about the VR system:
Well, what do you think? Will this be a good thing or will Facebook crash and burn what could have been a great new system and platform?