Facebook swallows up virtual reality firm Oculus VR for £1.2bn

Posted on 27 Mar 2014 by Tim Brown
Virtual Reality firm Oculus VR received its initial start via crowd funding website Kickstarter
Virtual Reality firm Oculus VR received its initial start via crowd funding website Kickstarter.

Californian-based Oculus VR, one of a handful of leading edge virtual reality technology companies, is to be bought by Facebook for a reported $2bn (£1.2bn).

Facebook founder, Mark Zuckerberg, said Oculus VR technology, like its flagship product Oculus Rift, had the power to “change the way we work, play and communicate”.

According to a statement from Facebook, the deal includes $400 million in cash and 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). The agreement also provides for an additional $300 million earn-out in cash and stock based on the achievement of certain milestones.

The Oculus Rift has yet to be released, but more than 75,000 orders for development kits have already been placed and its prototypes have received rave reviews at technology event

As Facebook said in its statement, although the applications for virtual reality technology beyond gaming are in their nascent stages, several industries are already experimenting with the technology, and Facebook plans to “extend Oculus’ existing advantage in gaming to new verticals, including communications, media and entertainment, education and other areas”.

One of those ‘other areas’ may indeed be for industrial application with the prospect for visualisation of prototypes and simulation based training a real possibility for the future but no specific announcements for such applications have yet been made.

Oculus VR originally raised funds for its groundbreaking virtual reality development with crowd funding site Kickstarter and $2.4m (£1.5m). It subsequently received a further $75m from investors.

However, rather than being overjoyed at the sales, some of the original crowd funding investors have announced there displeasure at the deal however, labelling Oculus as a corporate sell-out, with concerns that the technology will now be used as an advertising resource.

“I supported this because it’s something that I’ve wanted to see become a reality since I read my first William Gibson novel,” one Oculus donor wrote on Kickstarter. “Now I find out that I might as well have handed my money right to Facebook and I feel a little sick.”