Tuesday, March 25, 2014

Social media giant Facebook purchases Oculus VR for $2 billion

In a bit of bizarre news, the popular social media network Facebook has purchased virtual reality pioneering company Oculus Rift for approximately $2 billion.*



When users think of Facebook, images of friends’ babies, daily streams and updates, and a slew of other social-media staples are conjured up. What isn’t part of that mental picture is VR tech; but it appears that Facebook plans to tap the emerging platform to solidify a new medium of social media integration.

As part of the acquisition deal, Facebook will compensate the VR firm with $400 million in cash and 23.1 million shares of the company’s common stock–worth approximately $1.6 billion. The agreement also promises Oculus with an additional $300 million payout if certain sales figures milestones are reached.

The social media guru sees an advantage in the virtual reality platform, specifically in expanding their hold on social networking and plans to*”extend Oculus’ existing advantage in gaming to new verticals, including communications, media and entertainment, education and other areas.”

Facebook CEO and founder Mark Zuckerberg had the following to say about the acquisition:
“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.”

Contrariwise, Brendan Iribe, CEO and co-founder of Oculus VR, shard his thoughts on the deal:
“We are excited to work with Mark and the Facebook team to deliver the very best virtual reality platform in the world.”

“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.”



Given the expansive potential of the emerging platform, Facebook believes that “virtual reality technology is a strong candidate to emerge as the next social and communications platform”. This may or may not be a good thing, depending on your views on social media; while it is true that it has a bounty of advantages in terms of news-based content, one could see how VR could be quite diluted with tedious and unnecessary daily updates and flooded with advertisements, making it another medium to exploit for virtual earnings.

It is a curious proposition to be sure, but it seems to be one that potentially spells annoyance to common gamers. Sure it won’t be a pre-requisite to have Facebook on your household Oculus Rift headset, but as a fresh new platform–albeit dependent upon a PC or console–it shouldn’t necessarily be tethered or hindered by things such as virtual ads.

If executed properly, Facebook does stand to lay quite a bit of stake in terms of the communications area of the VR platform, however they will no-doubt face public backlash if tiresome content finds its way onto gamers’ headset screens.

Furthermore it’s worth questioning why Oculus VR would feel comfortable signing the agreement, considering they are one of the main contenders for the VR battlefield. Could it be an issue of funding, or a problematic hardware roadblock–or perhaps Sony’s Project Morpheus VR headset is throwing them off? Whatever the reason, Oculus VR has signed the deal, and Facebook will now have a direct hold over the Oculus Rift’s future, leaving the device to an uncertain fate.

In any case, it surely will be interesting to see how Facebook aims to mold their transition into the VR realm, but it won’t be a straight translation from PC to virtual reality; there will need to be many changes in order to streamline the experience. The news is undoubtedly daunting for many, and thousands of gamers across the globe are most likely scratching their heads ponderously when told about the agreement, however it remains to be seen if Facebook can be a key force in the development of the Oculus VR.

The acquisition is scheduled to close in the second quarter of 2014.

Via*PR Newswire



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