Facebook Buys Kickstarted VR Company Oculus for $2 billion

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Published by GameFront.com 5 years ago , last updated 1 year ago

Posted on March 25, 2014, Phil Hornshaw Facebook Buys Kickstarted VR Company Oculus for $2 billion

Facebook announced today in a press release it would acquire virtual reality company Oculus, maker of the Rift VR headset that drew id Software Co-Founder John Carmack to join Oculus earlier this year.

According to the release, Facebook is paying $400 million in the sale, with 23.1 million shares of Facebook common stock, valued at $1.6 billion. Hitting certain unnamed milestones would earn Oculus another $300 million in cash and stocks, it said.

According to a statement on the Oculus website, the company and Facebook “shared an even deeper vision of creating a new platform for interaction that allows billions of people to connect in a way never before possible.”

“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 statement goes on to state that Oculus has received more than 75,000 orders for development kits of its Rift headset (each valued at $300). The Rift project got its major start on Kickstarter in 2012, where it earned just under $2.5 million, with a stated goal of $250,000. It later brought in another $75 million in Series B venture capital funding.

Facebook Chief Executive Officer Mark Zuckerberg posted a statement of his own on the social network, noting that Oculus would “continue to operate independently” within Facebook and would continue to focus on gaming, at least for now.

“Immersive gaming will be the first, and Oculus already has big plans here that won’t be changing and we hope to accelerate,” Zuckerberg wrote. “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.”

Meanwhile, the news of Facebook’s acquisition of the company has spurred at least one well-known game developer to cut loose of working on the Rift. Minecraft creator Markus “Notch” Persson noted on Twitter that he and Minecraft developer Mojang had been in talks with Oculus to bring a version of the super-popular open-world game to the Rift headset.

“I just canceled that deal,” Persson wrote on Twitter. “Facebook creeps me out.”

We were in talks about maybe bringing a version of Minecraft to Oculus. I just cancelled that deal. Facebook creeps me out.

— Markus Persson (@notch) March 25, 2014

Notch went on in a blog post, saying that while the future of VR may well be in social, “I don’t want to work with social, I want to work with games.” He also mentioned his own donation to the Rift project on Kickstarter, saying, “And I did not chip in ten grand to seed a first investment round to build value for a Facebook acquisition.”

“Facebook is not a company of grass-roots tech enthusiasts,” he wrote. “Facebook is not a game tech company. Facebook has a history of caring about building user numbers, and nothing but building user numbers. People have made games for Facebook platforms before, and while it worked great for a while, they were stuck in a very unfortunate position when Facebook eventually changed the platform to better fit the social experience they were trying to build.”

Other developers might not be quite as negative toward the social networking behemoth, as noted in a report from Polygon polling developers making VR games. But like Notch, one has to wonder how the Rift’s 9,521 other Kickstarter backers have to be feeling right now, since they’ll see no return on the money they gave to help make the Rift a reality. Meanwhile, the Facebook sale will bring the company’s creators some 800 times the amount they acquired through crowdfunding.

Phil Hornshaw is senior editor at Game Front. Read more of his work here, and follow him and Game Front on Twitter: @philhornshaw and @gamefrontcom.

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