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Facebook has acquired Oculus VR for 2 Billion US Dollars

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Incredible turn of events! I'd love to know which party initiated the talks - was the acquisition a defensive move by Facebook?



The Oculus Rift was attractive because it was a device that targeted hardcore PC gamers. Ask yourself the following question: Do Facebook care more about hardcore gamers or casual gamers?

The answer to that question is why a lot of PC gamers are very disappointed by this news. There's a lot of potential in VR technology, so the momentum behind the Rift was fueled by people who could see that potential - people who know how to overclock their CPU, how to rollback drivers, how to change .ini files etc. Checkout the top 25 Facebook Apps to get a better understanding of why Facebook aren't interested in this crowd: http://www.insidefacebook.com/2014/03/03/top-25-facebook-apps-march-2014-inside-candy-crush-sagas-dominance/

I wonder if the Facebook Rift will have a big presence at E3? I can definitely see Facebook using the E3 show to 'flex' their acquisition.
I think a lot of people are very short sighted in only considering OR as a gaming accessory. Yes, it's been used primarily for gaming in its current form, but it has myriad uses beyond that.

Do I care about OR as a hardcore or causal gamer? No, I don't care one bit about OR as a gaming device. IMO, it's still a niche novelty in the grand scheme of gaming. As a technology that can advance and revolution other industries in the future, that's OR's true potential so it's unfortunate that 90% of the comments here only see OR in a tool exclusive for games
 
Funniest part is the Microsoft bit; how does VR make sense when Kinect is involved?

Wouldn't Kinect make perfect sense as an accessory to a VR headset? Both the second developer version of the Rift and the current Sony prototype are using some sort of camera system as far as I can tell.
 
Of course they have a say, but people are overreacting thinking Oculus is going to not support hardcore gaming at all and only focus on mobile games from now on, it's completly ridiculous to think such a thing will happen.

The least of Facebook's desires are to cater to hard-core gamers.

Awful day.
 
"Continue playing this game in VR Mode for 5 gold pieces. Gold can be purchased using real money in our store!"

This is the future of the Oculus Rift. I guarantee it.

The future of interactive entertainment is a suicide attempt at microtransactions after increased backlash towards other companies that are trying it.

Those 2 billion dollars will surely pay off.
 
You should read this from Zuckerberg.

[Update: As for exactly how Facebook will monetize Oculus, CEO Mark Zuckerberg said on the call to investors, "We're clearly not a hardware company. We're not going to try to make a profit off of the hardware long-term...but if we can make this a network where people are communicating, and buying virtual goods, and there might be ads down the line...that’s where the business could come from."]
And all of that is long-term. IE, Not the goddamn Rift. Facebook has a vision for social VR, and that's why they needed Oculus. But that's a long ways off. Right now, they're going to get the Rift on shelves - and stay strong with the gaming focus. From there, Oculus VR will start work on social experiences for the platform.
 
Wow, this thread just keeps going and going. People are having a field day with this. And it's coming from a lot of places.

Sony fans have been jealous of the Oculus Rift simply because it was announced long before Sony's headset, had dev kits out long before, and has better specs than the Sony headset. They already wanted to bash the Rift, but they knew that cold hard facts were against them. They're using this commotion as an opportunity to jump in and hate on the Rift and write it off as a VR device.

Xbox fans are pissed because they were secretly hoping that Microsoft would acquire Oculus and thus have a superior VR solution compared to Sony's headset. Now, they might as well just bash VR in general, both the Rift and Project Morpheus.

PC fans are upset because being associated with Facebook hurts their hardcore image. Facebook seems casual and mainstream and who wants to be associated with that? Even if the consumer Rift is incredible and there are lots of amazing games available for it, who cares?.. its now owned by Facebook so it automatically sucks.

Then you have the people that have been naysayers of VR since the beginning. They've hated on the Rift all along and this just gives them a chance to pile on.

Last we have the the kickstarter groupies. The Oculus Rift was one of the main kickstarter darlings. It was going to show the world what crowdfunding could do on its own. Oculus being acquired and funded by a large successful company like Facebook is seen as a betrayal by these people.

So the internet is in flames and it's all doom and gloom for the Rift. Only about 20 or 30% of people seem to be keeping a level head about this.

You must be related to misterxmedia with those board assumptions and conspiracies .
 
Companies usually buy other companies because there are existing synergies/overlaps (eg Facebook/Whatsapp). This makes no sense at all from that angle. Its my job to cover stocks in the space and I'm still struggling to explain this.

Its a great deal for Oculus, they become rich overnight on a company with no product released and some brand equity in a small, niche segment of the gaming universe. Good for the investors/owners. For Facebook there's no immediate payoff. As this thread proves very well, the people most likely to be excited about Oculus are the very same people most likely to hate Facebook and everything it stands for. The people using Facebook the most are most likely to use a tablet/smartphone primarily and are extremely unlikely to have a gaming PC powerful enough to drive it in its current form nor would they ever be interested in owning one at any point. Maybe at some point in the future there's a market for mini games, live sports and (gasp) reality TV on VR but that's a long way away because OR is still shackled to the PC. Its not a pure financial investment - Zuckerburg would have done that via a private investment vehicle like a hedge fund/PE shop. Weird move.

The only reason I can come up with is Facebook is very much a "buzz" stock. Its market cap has soared to ridiculous multiples on revenues of around 10% those of Sony and Microsoft (~8b FB vs ~80b for both MSFT/SNE). They feel the need to keep making big splashes using their overvalued equity to buy stuff while they still can to keep driving the buzz. To some extent, it is working. Some of the less informed "experts" on TV act like Oculus Rift is a standalone thing Facebook can sell rivalling the iPhone in its significance - completely ignoring the fact that you'd need a $1000 odd PC to drive it. Whatever the future is for VR, I think its still a long way from being mainstream. Being first to an immature market isn't the best idea - just ask all those companies (including Sony) that released a smartphone before Apple released the iPhone.

This is what I don't understand, the VR headset OR was developing is so far from being usable by main-stream consumers (people who use facebook) that the current goals in mind seem questionable. The amount they'd have to tone it down to work on the average tablet or even the average tablet/aptop in 3 years would be considerable. It will be insanely hard to market if it's visuals look like they are from the early 2000s. I don't pay attention to most tech stocks in particular but this caused me to get up-to-date at least on Facebook. They clearly seem to be leveraging a bloated stock price, whether that is to actually enter a market which makes tangible goods or it is fear of getting shorted isn't really clear. What is clear is that their acquisition of OR has nothing at all to do with gaming.
 
You should read this from Zuckerberg.

[Update: As for exactly how Facebook will monetize Oculus, CEO Mark Zuckerberg said on the call to investors, "We're clearly not a hardware company. We're not going to try to make a profit off of the hardware long-term...but if we can make this a network where people are communicating, and buying virtual goods, and there might be ads down the line...that’s where the business could come from."]

Oh, there will most definitely be ads, but I don't think his means that your games will suddenly be interrupted by pop-ups. The space he's talking about creating will be unlike something we've seen as of yet, and the methods of marketing will probably be wholly new. I'm not saying that I look forward to how they use marketing to earn revenue, but that the knee-jerk reactions of envisioning banner ads and pop-ups all over the virtual world are likely incorrect.
 
Interesting turn in the VR world. I have no interest in buying one of these headsets ever but I'm interested to see how all of this plays out.
 
This is what I don't understand, the VR headset OR was developing is so far from being usable by main-stream consumers (people who use facebook) that the current goals in mind seem questionable. The amount they'd have to tone it down to work on the average tablet or even the average tablet/aptop in 3 years would be considerable. It will be insanely hard to market if it's visuals look like they are from the early 2000s. I don't pay attention to most tech stocks in particular but this caused me to get up-to-date at least on Facebook. They clearly seem to be leveraging a bloated stock price, whether that is to actually enter a market which makes tangible goods or it is fear of getting shorted isn't really clear. What is clear is that their acquisition of OR has nothing at all to do with gaming.
Personally I don't think that 2 billion in bloated stock is a bad price for getting in on the ground floor of VR.
 
The least of Facebook's desires are to cater to hard-core gamers.

Awful day.

What is the difference between a VR headset made for hardcore gamers and one not made for hardcore gamers? The things that make VR good make VR good for gaming. So many people seem so sure this is the worst thing ever, but no one can describe anything specific. This is really a thread full of furious justification for first blush gut reactions.
 
And all of that is long-term. IE, Not the goddamn Rift. Facebook has a vision for social VR, and that's why they needed Oculus. But that's a long ways off. Right now, they're going to get the Rift on shelves - and stay strong with the gaming focus. From there, Oculus VR will start work on social experiences for the platform.

That's a lot of faith to put in a backer that has never developed hardware or games before....

First thing out of their mouths should have been gaming focus if they cared even a little.
 
Of course they have a say, but people are overreacting thinking Oculus is going to not support hardcore gaming at all and only focus on mobile games from now on, it's completly ridiculous to think such a thing will happen.

Facebook isn't in the business of core-gaming, they've never published or developed a core-gaming experience. They paid 2 billion for a company which atm hasn't either. There is zero reason to believe that they will support core gaming especially when all the industry-sages like Molyneux and Brezinksi are trying to tell us the consoles we are playing on are dead and the gaming business model is also dead.
 
Communicating, shopping for virtual goods, 3D advertising, I can see how Oculus is worth something to FB. What incentive is there for FB to allow the rift to be a universal device? Sign into FB, every other platform is locked out?

While I'm totally bummed by this news, I'm not really buying into the fear mongering about the Rift (or VR in general) becoming only a sub-set of the Facebook experience. Locked off, etc. I mean, I guess that could happen, but it seems unlikely. Here's a happier interpretation, put forth mostly to cheer myself up:

Facebook has more money than God. Facebook knows that the shelf life of social network sites is not that long. People are fickle. The decline has already started. Facebook may actually believe that VR is the next big thing. (Many people, including me, do.) As such, Facebook wants in on that action. They can see that if VR becomes popular, there are a ways for an entity like Facebook to make bank on that new "platform".

So, they throw money at Oculus in order to increase the odds that VR actually happens this time around. (Oculus can now afford to do this "right".) If that gambit works, and VR becomes an actual thing, not only will FB be in position to make money off a lot of the hardware sales, they will also control some patents (I think), and they will be in at the ground floor for various VR "experiences". They are essentially trying to insure that a whole new market comes into being. A market that they feel they can profit handsomely within.

None of that means that Oculus brand VR devices will only be useful for running Facebook.

(Although perhaps down the road a few years, Facebook could start subsidizing or flat out giving away headsets that were somehow tied into their infrastructure. <Insert nightmarish dystopian vision here.> Still, that would still just be one way to access VR content. Much like buying a PS4 and Morpheus is another (somewhat proprietary) way of accessing a different set of content.)

TLDR: Facebook/Oculus just wants everybody to have access to cheap and awesome razors, so they can sell us a bunch of blades.
 
The Oculus Rift was attractive because it was a device that targeted hardcore PC gamers. Ask yourself the following question: Do Facebook care more about hardcore gamers or casual gamers?

It was targeted at those who own high-end machines because it won't run on anything else right now. That's still the case and that's still the market. In the long term it's going to have inbuilt computing components, or be tethered to mobile devices. That's where VR will be heading in addition to PC and consoles, regardless of any acquisition. That's when it will take off the same way smartphones did, at least Facebook (and Sony) hopes I imagine.

That's a lot of faith to put in a backer that has never developed hardware or games before....

First thing out of their mouths should have been gaming focus if they cared even a little.

It was:

Immersive gaming will be the first, and Oculus already has big plans here that won't be changing and we hope to accelerate. The Rift is highly anticipated by the gaming community, and there's a lot of interest from developers in building for this platform. We're going to focus on helping Oculus build out their product and develop partnerships to support more games. Oculus will continue operating independently within Facebook to achieve this.
 
I posted this in the other thread but, after thinking on it for a bit I have to say this isn't as bad as it sounds. Competition is a good thing. This will allow Oculus the means to compete toe-to-toe with Sony's VR solution. Steam/Valve also have something up their sleeves. Finally I'd like to see Mircosoft, Google, Apple, and Amazon get in on VR as well.

more companies and more minds working on VR the better it will be and the faster it will get accomplished. Also, I'm thinking beyond just gaming applications for VR. Travel, education, rehabilitation,ect, the list could go on and on.
 
While I'm totally bummed by this news, I'm not really buying into the fear mongering about the Rift (or VR in general) becoming only a sub-set of the Facebook experience. Locked off, etc. I mean, I guess that could happen, but it seems unlikely. Here's a happier interpretation, put forth mostly to cheer myself up:

Facebook has more money than God. Facebook knows that the shelf life of social network sites is not that long. People are fickle. The decline has already started. Facebook may actually believe that VR is the next big thing. (Many people, including me, do.) As such, Facebook wants in on that action. They can see that if VR becomes popular, there are a ways for an entity like Facebook to make bank on that new "platform".

So, they throw money at Oculus in order to increase the odds that VR actually happens this time around. (Oculus can now afford to do this "right".) If that gambit works, and VR becomes an actual thing, not only will FB be in position to make money off a lot of the hardware sales, they will also control some patents (I think), and they will be in at the ground floor for various VR "experiences". They are essentially trying to insure that a whole new market comes into being. A market that they feel they can profit handsomely within.

None of that means that Oculus brand VR devices will only be useful for running Facebook.

(Although perhaps down the road a few years, Facebook could start subsidizing or flat out giving away headsets that were somehow tied into their infrastructure. <Insert nightmarish dystopian vision here.> Still, that would still just be one way to access VR content. Much like buying a PS4 and Morpheus is another (somewhat proprietary) way of accessing a different set of content.)

TLDR: Facebook/Oculus just wants everybody to have access to cheap and awesome razors, so they can sell us a bunch of blades.

The problem is Facebook has never launched hardware successfully, why would they start in a 100% unproven market in which the audience for said device are the very people who despise their company? They are looking to sell the experience of VR, not perfect the hardware of VR (to the point where enthusiasts want it).
 
That's a lot of faith to put in a backer that has never developed hardware or games before....

First thing out of their mouths should have been gaming focus if they cared even a little.

Was OR ever going to be a huge software developer even prior to this buyout? The potential of the Rift was always getting the hardware out there and letting the public create the content. I don't see how that changes. At the end of the day even if Facebook wants to create some sort of virtual chatroom with this thing you will still get your games and if the hardware is as dynamic as we've seen, you will get some top notch talent creating games for it. Facebook are looking to turn VR into the next big platform, much like PCs and the Internet before it. Both of those things came out and were NOT game focused but games evolved from it, I don't see why VR has to be any different.
 
What is the difference between a VR headset made for hardcore gamers and one not made for hardcore gamers? The things that make VR good make VR good for gaming. So many people seem so sure this is the worst thing ever, but no one can describe anything specific. This is really a thread full of furious justification for first blush gut reactions.

Okay...

http://www.cbc.ca/news/technology/facebook-to-buy-oculus-virtual-reality-firm-for-2b-1.2586318
On Tuesday, Facebook said that while applications for virtual reality technology beyond gaming are "nascent," it plans to extend it to other uses. These include communications, media, entertainment and education. Virtual reality technology is "a strong candidate to emerge as the next social and communications platform," the company said.

This is a technology that wont even be out for gamers for a long time and I don't see any other market funding it quite like gamers would... so we're left in this weird middle ground.

Facebook might be incredibly smart and just completely leave it to the games market for the next 5-10 years... but I highly doubt that happens.
 
The problem is Facebook has never launched hardware successfully, why would they start in a 100% unproven market in which the audience for said device are the very people who despise their company? They are looking to sell the experience of VR, not perfect the hardware of VR (to the point where enthusiasts want it).

How do you suspect the world would look if no company ever did what they hadn't done before?
 
I wonder if Andrew Scott Reisse's (co-founder) family is going to see any of this money? Did he have a wife and kids?
 
Social features? What does that even mean? The Oculus is a piece of hardware you plug into a computer. Could your PC monitor have "social features"?

The oculus is CURRENTLY a piece of hardware you plug into a computer. We are not that far from being able to substitute a smart device for that computer.
 
Wouldn't Kinect make perfect sense as an accessory to a VR headset? Both the second developer version of the Rift and the current Sony prototype are using some sort of camera system as far as I can tell.

It was a dumb post. I just wanted to ask how VR doesn't make sense with Kinect? It seems like the best step with Kinect to me. It wouldn't surprise me if MS has VR coming.

But wouldn't Kinect + a VR headset be an amazing combination together? That's full positional body tracking and voice recognition combined with VR.

It was supposed to be a lame Kinect joke.
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That's a lot of faith to put in a backer that has never developed hardware or games before....

First thing out of their mouths should have been gaming focus if they cared even a little.
And again, OR's potential isn't just gaming. That's one thing it can do. It has more important, far-reaching possibilities than games

Honestly, I'm happy there isn't a focus on games because like someone said earlier, the OR has the potential to revolutionize everything from education to medical and military training. To keep trying to confine it to gaming this, hardcore gamer that, is to not consider the capabilities and potential of the hardware itself.
 
That's a lot of faith to put in a backer that has never developed hardware or games before....

First thing out of their mouths should have been gaming focus if they cared even a little.

Immersive gaming will be the first, and Oculus already has big plans here that won't be changing and we hope to accelerate. The Rift is highly anticipated by the gaming community, and there's a lot of interest from developers in building for this platform. We're going to focus on helping Oculus build out their product and develop partnerships to support more games. Oculus will continue operating independently within Facebook to achieve this.

This is directly from the front page, from Zuckerberg's own post.

Also, the fact that Facebook doesn't have gaming experience works in Oculus' favor. Unlike an EA or a Valve, Facebook isn't going to tie down Oculus within an existing closed system. Like their past acqusitions, Facebook will stand back & let Oculus do it's thing. Then, once VR is a massive part of the entertainment industry - Facebook has an early open into the highly lucrative realm of social VR.
 
Okay...

http://www.cbc.ca/news/technology/facebook-to-buy-oculus-virtual-reality-firm-for-2b-1.2586318


This is a technology that wont even be out for gamers for a long time and I don't see any other market funding it quite like gamers would... so we're left in this weird middle ground.

Facebook might be incredibly smart and just completely leave it to the games market for the next 5-10 years... but I highly doubt that happens.

Applications. They can write software to work with the headset, just like any game studio can. You can use it to fly a ship in space or communicate or learn or whatever else.
 
Companies usually buy other companies because there are existing synergies/overlaps (eg Facebook/Whatsapp). This makes no sense at all from that angle. Its my job to cover stocks in the space and I'm still struggling to explain this.

Its a great deal for Oculus, they become rich overnight on a company with no product released and some brand equity in a small, niche segment of the gaming universe. Good for the investors/owners. For Facebook there's no immediate payoff. As this thread proves very well, the people most likely to be excited about Oculus are the very same people most likely to hate Facebook and everything it stands for. The people using Facebook the most are most likely to use a tablet/smartphone primarily and are extremely unlikely to have a gaming PC powerful enough to drive it in its current form nor would they ever be interested in owning one at any point. Maybe at some point in the future there's a market for mini games, live sports and (gasp) reality TV on VR but that's a long way away because OR is still shackled to the PC. Its not a pure financial investment - Zuckerburg would have done that via a private investment vehicle like a hedge fund/PE shop. Weird move.

The only reason I can come up with is Facebook is very much a "buzz" stock. Its market cap has soared to ridiculous multiples on revenues of around 10% those of Sony and Microsoft (~8b FB vs ~80b for both MSFT/SNE). They feel the need to keep making big splashes using their overvalued equity to buy stuff while they still can to keep driving the buzz. To some extent, it is working. Some of the less informed "experts" on TV act like Oculus Rift is a standalone thing Facebook can sell rivalling the iPhone in its significance - completely ignoring the fact that you'd need a $1000 odd PC to drive it. Whatever the future is for VR, I think its still a long way from being mainstream. Being first to an immature market isn't the best idea - just ask all those companies (including Sony) that released a smartphone before Apple released the iPhone.

My guess is that Facebook sees this as a long term investment. The VR space is clearly heating up in the gaming space, but it's easy to see what this tech could do outside of gaming once it is inexpensive and less niche. I think in the short term, Facebook is looking to simply cultivate the tech. I think for the next few years the Oculus Rift will still have a strong gaming focus, as that's the segment where early adopters will be. Once they can get the price down, and more importantly, make it portable and self-contained, will we really see the effects of the Facebook acquisition. As a PC peripheral it can only be so big, but as a computer in itself it will be revolutionary. Facebook is getting in on the trend early not only to beat competitors to the punch, but to also ramp up the development of this new tech.

Apple became the company that it is today because it made revolutionary advancements in the mobile space that made their brand synonymous with smartphones and tablets. Facebook likely sees VR devices as the next wave of personal computers, and jumping in now will let them own the future.
 
It was:
"Immersive gaming will be the first, and Oculus already has big plans here that won't be changing and we hope to accelerate. The Rift is highly anticipated by the gaming community, and there's a lot of interest from developers in building for this platform. We're going to focus on helping Oculus build out their product and develop partnerships to support more games. Oculus will continue operating independently within Facebook to achieve this."

Ya that's from Occulus though, not facebook right?
 
And again, OR's potential isn't just gaming. That's one thing it can do. It has more important, far-reaching possibilities than games

Honestly, I'm happy there isn't a focus on games because like someone said earlier, the OR has the potential to revolutionize everything from education to medical and military training. To keep trying to confine it to that gaming this, hardcore gamer that, is to not consider the capabilities and potential of the hardware itself.

B-but my VR waifu...
 
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