Facebook buy virtual reality company Oculus VR for $2bn

Social media giant Facebook is set to purchase virtual reality device maker Oculus VR – the makers of the Oculus Rift – for $2bn.

The purchase could see Facebook users dipped into the world of virtual reality when browsing through the social site, this could include virtual meetings with friends, and being able to play FarmVille in 3D.

Facebook say it wants to extend Oculus’ work, which is currently focused around gaming, to include media and entertainment education and probably everything you can think of.

The deal includes £400m in cash and the makers of the VR product will also get in on 23.1m shares of Facebook’s common stock. This is valued at $1.6bn – or $69.35 per share.

The agreement also provides for an additional $300 million earn-out in cash and stock depending on performance related targets – although it hasn’t been revealed what these are. It follows Facebook’s recent purchase of messaging service WhatsApp for $19bn.

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Writing on the Oculus website the owners, including founder Palmer Luckey (above), 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.”

The Oculus Rift headset has so far received more than 75,000 orders for its development kits and only recently announced that its second Dev kit would go on sale.

When the Rift was funded on Kickstarter it raised more than $2m dollars from almost 10,000 backers.

As with all of the purchases Facebook seems to make, including WhatsApp, and previously Instagram, Luckey said not a lot will change with the company.

“Very little changes day-to-day at Oculus, although we’ll have substantially more resources to build the right team,” he said on the company’s website.

However unlike the previous high-profile purchases, which were well established at the point of sale, Oculus is yet to ship to consumers or be available publicly.

In many ways this must increase the scope for influence from its new owners and indicates Facebook’s desire to move the technology forward.

Facebook CEO Mark Zuckerberg said: “Mobile is the platform of today, and now we’re also getting ready for the platforms of tomorrow.”

He continued: “Oculus has the chance to create the most social platform ever, and change the way we work, play and communicate.”

In the last 18 months the Oculus Rift has gone from a foam product to being tested and built for by developers and the website still says it is hiring more staff – positions which will be highly chased after the recent news.

CEO of Oculus VR Brendan Iribe said: “We are excited to work with Mark and the Facebook team to deliver the very best virtual reality platform in the world.”

He continued: “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.”

The purchase is expected to close in the second quarter of 2014.

Update: This post has been updated since first publication to include further information on the deal. 


Images courtesy of Oculus VR 


Virtual rivals: the battle of the VR headsets heats up

It’s been a busy week for virtual reality. Sony’s long-awaited headset for the PS4, Project Morpheus, was unveiled on Tuesday, and Oculus Rift’s Development Kit 2 was announced on Wednesday.

But these were not the only VR headsets making waves this week. Over at London’s Wearable Technology Conference vrAse was wowing developers and tech press hounds alike, while 3D printed Altergaze hit a quarter of its Kickstarter campaign target with over a month to go.

Both products differ from Sony and Oculus’ offerings in that they are designed to work with your smartphone: by slotting your phone into either headset it becomes an effective VR device for gaming and 3D video.

Kickstarter has played a powerful role in getting VR headsets off the ground. Both vrAse and Oculus were also Kickstarter-funded, and there is clearly an appetite among would-be backers for this kind of tech.

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vrAse is pitching to a different market to Oculus in that its expected to be quite a bit cheaper, at less than £100. It’s also going for a slightly different approach by showing off its headset as an on-the-go device for use on planes, trains and out and about.

The headset is designed to work with a wide variety of smartphones. vrAse has created a ‘perfect fit’ model for leading handsets, including the iPhone 5, HTC One and Galaxy Note 2, as well as a standard model that works with phones sized between 3.5” to 6.3”, although the company recommends using smartphones sized between 5” and 6”.

vrAse can be used to watch 3D videos, play games in 3D with a bluetooth controller and as an AR device.

We had the pleasure of trying out vrAse at this week’s Wearable Technology Conference and were pretty impressed with the results. The game we tried, a rollercoaster simulator, was incredibly immersive and the 3D video felt very realistic.

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However, a would-be contender to vrAse has popped up on Kickstarter in the form of Altergaze. The Altergaze headset functions very similarly to vrAse in that you put your smartphone into it to get a VR headset you can play games and watch videos on.

The key difference with Altergaze is that its 3D printed. This means that the cost is very low, and enables a very wide range of customisation – an appealing option for a technology that runs the risk of making you look a little silly if worn in public.

Altergaze is also using this manufacturing method to boost worldwide distribution by encouraging 3D print shops to become manufacturers.

The 3D printed, slotted together style of Altergaze also makes it resemble old fashioned goggles, giving it potential appeal with the steampunk crowd.

All in all, though, the key question will be whether these cheaper, smartphone-based VR headsets will appeal to users enough to let them contend with the big boys. In the long run their price and versatility might even give them an advantage.


Images courtesy of vrAse and Altergaze.