Facebook to Buy Oculus VR for $2 Billion
The company that is bringing the virtual reality headset back to gaming is now a part of the evil empire. The company behind the Oculus Rift, Oculus VR, has been bought by Facebook for a staggering $2 billion.
The deal was announced late on Tuesday. The purchase price is comprised of $400 million in cash and $1.6 billion in Facebook stock which amounts to 23.1 million shares. There is also a $300 million bonus available should Oculus meet certain performance milestones.
At face value, Facebook buying Oculus VR doesn’t make sense apart from adding to its growing portfolio of tech acquisitions. Oculus’s purchase comes a month after buying WhatsApp. This marks the 46th acquisition by Facebook since its launch.
According to the official press release, Facebook plans to use the Oculus Rift for more than just gaming. They say that the plan is to use the Rift for “communications, media and entertainment, education and other areas.” That’s not much of a plan other than put money into it to convince people it will work for everything.
Not everyone is happy about this deal. Notch of Minecraft fame tweeted that he was pulling the plug on a version of Minecraft for the Rift. He expanded on that in a blog post saying that he doesn’t trust Facebook or their motives. I’d imagine that a number of other developers working on compatibility for the Rift and Kickstarter backers of the Rift feel similarly.
Share prices of Facebook fell $0.71 per share in after-hours trading because of the news. Interestingly, the $1.6 billion in shares was based on the average closing price for the 20 preceding March 21st. The result was a share price of $69.35 per share. Facebook’s stock closed on Tuesday at $64.89 before that $0.71 drop. That means that means that the purchase price has already dropped in value by $103,000,000.
Fortunately, it’s not like the Oculus Rift is the only game in town. Both Valve and Sony have been working on their own VR headsets in recent months. Sony unveiled their’s at GDC while Valve’s was shown to developers at Steam Dev Days. With competition for your VR dollars, it comes down to who you trust most. So we’re all going with Valve, then.
Source: PR Newswire