A Look at Facebook’s $2 Billion Acquisition of Oculus VR

Acquisitions are a fun but controversial topic within the gaming industry and are hard to avoid with so many innovative startups coming into play these days within the technology industry. This holds true with the recent blockbuster acquisition made by Facebook to acquire Oculus VR for 2 billion dollars.

Oculus Rift Headset

Oculus Rift Headset

Facebook and Instagram

Now, many people will see this and think back to the time when Facebook acquired Instagram for nearly a billion dollars and face confusion and have many questions but the main reasons behind these acquisitions are simple. For the Instagram acquisition, Facebook saw the exponential growth Instagram received in follower base and felt fear in a new competitor emerging. Instagram drew in over 30 million users before the release of the app on the Android platform which is mindboggling and Facebook saw that if they didn’t act on it, Instagram could become the major source of photo sharing. Facebook couldn’t acquire the “viral growth on a mobile platform” and Instagram was the leader in that field so it only made sense for Facebook to acquire such a large entity within the industry. Talk about knocking out two birds with one stone right?

Behind Facebook, there is Instagram.

Behind Facebook, there is Instagram.

Facebook and Oculus VR

Coming off of that tangent and focusing back on the most recent acquisition of Oculus VR by Facebook, the deal was something not to be taken lightly. For all of you statistics lovers, the financial breakdown was as such: $2 billion total split into $400 million in cash and 23.1 million shares of Facebook’s common stock at an average closing price of the past 20 days which came out to be $69.35 per share. There were also incentives and milestones set in place which provides an additional $300 million earned cash and stock based on achievements in the future.

To gain a little insight into the reasoning behind such a large acquisition, Mark Zuckerberg gave a couple comments. He states, “Mobile is the platform of today, and now we’re also getting ready for the platforms of tomorrow. Oculus has the chance to create the most social platform ever, and change the way we work, play and communicate.”

Mark Zuckerburg, CEO of Facebook

Mark Zuckerburg, CEO of Facebook

A Quick Overview

Technology is shifting towards new horizons and virtual reality is one of those big concepts that will change the industry forever much like when smartphones started being released. Virtual reality opens up so many new opportunities for not just game developers but for anybody in any industry. Although nobody knows what will become of this acquisition and what Facebook will do with Oculus in their platform, Brendan Iribe (CEO of Oculus) says it best when he announces, “(Oculus) is a transformative and disruptive technology that enables the world to experience the impossible, and it’s only just the beginning.”

 

 

Tagged , , , , , , , , , , ,

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s