Everything you need to know about Facebook buying Oculus for $2 billion

It's been a busy week for virtual reality news with Facebook acquiring Rift creator Oculus VR, but we've laid out all the big developments so you know exactly what's happened.

If Sony's reveal of their own long-rumored VR headset wasn't enough vindication of the virtual reality platform, Facebook brought it into the mainstream big leagues by buying Oculus VR for $2 billion. For context, Facebook bought Instagram for $1 billion, and spent a whopping $19 billion on WhatsApp.

The Facebook acquisition of Oculus was finalized in just 72 hours, but the backlash was much more immediate. Oculus creator Palmer Luckey wrote a letter online explaining why the deal makes sense for Oculus, but:

Oculus was genuinely surprised by the negative reaction to the Facebook purchase, and Lucky said that, "After [Notch] sees everything we are able to do, I hope he will change his mind." Luckey also answered questions directly on Reddit about the deal:

  • "You won't need to log into your Facebook account every time you wanna use the Oculus Rift."
  • There's going to be a lot of resources put into indie content, hiring more people, and making custom hardware instead of using "scraps of the mobile phone industry."
  • "A lot of people are upset, and I get that. If you feel the same way a year from now, I would be very surprised."
  • Zuckerberg won't control Ocululs. "This acquisition/partnership gives us more control of our destiny, not less!"

Here in the GameSpot office, editor Tom Mc Shea wrote about how the backlash was understandable, but that ultimately, "We have learned a valuable lesson: Giving money on Kickstarter does not mean we have any say in a company's decisions." And Peter Brown explained why, even if you're truly excited by VR, you shouldn't worry about Facebook buying Oculus.

And you can be sure that there'll be even more big developments in the near future. Microsoft has rumblings of getting into VR in their own way, and E3 is right around the corner with even more exciting announcements.

Justin Haywald is a senior editor at GameSpot, and you can follow him on Twitter @JustinHaywald. Got a news tip or want to contact us directly? Email news@gamespot.com

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Sr. Editor Twitter: JustinHaywald

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Discussion

152 comments
hwrdstrnsbals
hwrdstrnsbals

who cares about this?  this isn't gaming news.  I'm sure there is a market for this headset in certain professions, but this is not gaming hardware and will never be consumed by gamers.  


It's a fad with less practical gaming sensibilities than 3D - and how many of us are playing games in 3D now?  3 years ago Sony would have told you that 90% of us would be playing games in 3D.  but we're not. 


VR has been a dream of many a computer nerd and tech geek for going on 30 years now, but I rarely here any gaming enthusiasts ever say anything about it or their desire for it.  Hell, Nintendo couldn't even get people to play with motion controls outside of little kids, moms, and the occasional rambunctious grandparent.  Gaming enthusiasts aren't interested in motion controls.  Just like they aren't interested in this and only a very few select casual gamers are going to pony-up for a VR headset, and even then it will just be those douchey guys who like to have the newest everything in some pathetic attempt to get people to think they are cool.


Facebook or not, no one will be talking about this device in 3 years.  You can stamp that.

runningman5ksmak
runningman5ksmak

these  are not going to sell that well when they come out 

Grey_Eyed_Elf
Grey_Eyed_Elf

Everything you need to know about the deal: 


MONEY!


Facebook = See's VR as a good future investment with potential returns

Oculus = Needed funding in order to bring forward their true potential


Message to angry gamers: Grow up.

vlainstrike
vlainstrike

"The first time I tried the Rift it showed a simulation of a craggy, rocky mountainside. [...]Instinctively my brain started looking for the edge of the image - but it didn't come. I kept turning until I was looking all the way behind me. There was nothing but mountain back there. Then I looked up and watched snow flakes sift down out of a gray sky straight into my face 

That's when my brain admitted defeat. 

It surrendered to the illusion that it was in another world. It wasn't going to find an edge. There were no edges. The Oculus Rift is the first visual medium that doesn't have a frame around it." -Time Magazine, April 7 2014


Brought a tear to my eye. I was skeptical at first too, but after reading various articles, reddit comments, and listening to the conference call, I've become a believer in this acquisition. Great things are on the horizon for VR - we're all going to receive a better product, more quickly, and at a cheaper cost than we would have without the merger.


Be thankful to live in such interesting times! I can't wait for the games!!!

vlainstrike
vlainstrike

"The first time I tried the Rift it showed a simulation of a craggy, rocky mountainside. [...]Instinctively my brain started looking for the edge of the image - but it didn't come. I kept turning until I was looking all the way behind me. There was nothing but mountain back there. Then I looked up and watched snow flakes sift down out of a gray sky straight into my face 

That's when my brain admitted defeat. 

It surrendered to the illusion that it was in another world. It wasn't going to find an edge. There were no edges. The Oculus Rift is the first visual medium that doesn't have a frame around it." -Time Magazine, April 7 2014


Brought a tear to my eye. I was skeptical at first too, but after reading various articles, reddit comments, and listening to the conference call, I've become a believer in this acquisition. Great things are on the horizon for VR - we're all going to receive a better product, more quickly, and at a cheaper cost than we would have without the merger.


Be thankful to live in such interesting times! I can't wait for the games!!!

absolut_gamerz
absolut_gamerz

FB bought Oculus. 

WHY? - because they're so F*****G rich. 

WHY? - bcoz they earn large profits on ads for many companies, etc. 

WHY? - bcoz these companies believed it is one of the best place to put their ads. 

WHY? - bcoz billions of people WASTING their TIME playing those F*****G FB. 


understand what i'm trying to say?   

duaneehoyt
duaneehoyt

I don't have a problem with adding social media to a video game. Why don't you first develop a video game, live the legacy of Hideo Kojima, and then do whatever you want. But nobody seems to have time to build a good video game these days. That alone is challenging enough.  Doesn't anyone understand what enough is enough?

translucent17
translucent17

I better not be playing some sweet vr goat simulator and have a friend request from suzzie pop up and ruin the immersion.

tjpaulman
tjpaulman

People on here play games, they don't know shit about business. Please do not make an attempt to run your own business. Stick to video games and cheat codes. :)

davidgrey2014
davidgrey2014

That Geek Zuckerberg has done it again, so god-damn greedy, 2 bil? Money money money! that's all that freak thinks about, Just give us the VR games and get the profits from that, not sell it to a bunch of corporate morons!

HiroArka
HiroArka

I keep seeing it called " VR " when I am sure it is more " Augmented " Reality than " VR "

DarthLod
DarthLod

I don;t see why anyone cares about this. I certainly dont. I have no interest in stupid gimmicks.

Col_Swamp
Col_Swamp

Crazy.....wish I had that kind of scratch to throw around. Hope VR works out for all of us!

Goobshoeriot
Goobshoeriot

I know you guys are just trying to calm all the people freaking out, including the Gamespot crew, but honestly as soon as Facebook made the buy it meant 1 thing to me.. Oculus Rift will become an Ad Machine! To think, that they would not manipulate or find a way to create adspace with OR is just naive. As you guys said in the video, Facebook will obviously try to make money off of this in the long run, which is perfectly reasonable for a business, and to me that just stumps the life expectancy for OR. I just wanted to get a fantastic VR machine, now that this is a Facebook product, I guarantee their will be strings attached to it now. So Sad, Oculus Rift was shaping up to be one of the greatest innovation for gamers and slappying a big corporate sticker on it just forewarns of EVIL and DANGER. Thanks but I'll pass

bourne714
bourne714

It's not like there is going to be a big ass facebook sticker on the front of your VR set.  Facebook will be in the background of things.  It's like buying a Barqs Root Beer.  They are owned by coca-cola but you would never know that unless you look at the little print on the bottom of the can.  Everyone should relax.  It's going to give them better resources to realize their vision.  I doubt very seriously that Facebook bought a VR company so we could all update our status in the 4th dimension, or whatever you want to call it.

Fenixx
Fenixx

Oculus seemed like an interesting thing but I was never really convinced by it yet.  Now that it's part of facebook (which doesn't deserve to be capitalized) and they're sticking their logo on it and everything, I could really care less about it.  I don't like facebook, I don't use it, and I don't want to be associated in any form with it.  So in terms of any VR future for me, the Oculus is dead.

mikz_nyc
mikz_nyc

How many times they gonna write this same article,same article different writer,Gamespot your becoming like Fox New of gaming 

Whiskey3romeo
Whiskey3romeo

Everything I need to know about Oculus being bought by Facebook would fit on the head of a pin since I can't imagine having any use for either in the foreseeable future.

philly215
philly215

Anyone claiming "Im with Notch"....is an idiot


Notch WAS NEVER....and HAS NEVER been an Oculus Rift developer.....he says he cancelled something...but he had nothing to cancel...he never announced or started anything


Notch just likes to make inflammatory comments....because thats how he is....he likes attention


Minecraft already works with the oculus rift through an amazing mod ...that is practically native support....so Notch was never needed.


No Real Oculus Rift Developer has cancelled anything...in fact....many more have joined on....because an Oculus Rift with 2 billion dollars and Mark Zuckerburgs billion dollar support means new advantages


* The Original Consumer Version plans for oculus rifts release...were going to be limited because it was using spare cell phone parts....a cell phone screen that wasnt high enough resolution....cell phone eregonomics....cell phone controller board.


NOW ALL THAT HAS CHANGED.....Oculus has the money and capital...to approach Hardware makers and demand custom parts


which means the Consumer Version of Oculus Rift will be better than anyone can even Imagine.....Thanks to Mark Zuckerburg


and No...Facebook will not be required...EVER....Palmer Luckey has already said if it ever is....he will leave the Company


Mark Zuckerburg didnt buy Oculus to expand his dying social network.....he bough it to create New Things for VR  because he understands that VR is going to be the future


remember that Futurama episode with Fry and Leela entering the Internet with goggles?....and physically walking into a chatroom?.....thats the real future


we even have a VR Chatroom already in development...that is freaking awesome....and exactly like that!

zeus_RO
zeus_RO

Zuckerberg clearly overpaid. I mean 2 billion?? I wonder what the negotiations looked like (if there were any)... Did Oculus ask for 10 Billion and Mark talked them down to only 2??


Also, it's interesting to know that the cash value of the takeover was $400.000, not 2 billion. The kickstarter raised over 2,4 million, that's 6 times more money.

And what does 1,6 billion in stocks mean?? Will they ever be able to cash that in, ever?? Not to mention that facebook stocks fell over 7% immediately after the Oculus take over.


I don't know what to believe anymore... This could be a good thing, helping development and bringing VR to the masses (not just gamers). Or it could be an absolute disaster as Facebook tries desperately to recover it's investment by any and all means.


I guess time will tell.

enough007
enough007

makes me lol how all sites are ridin fb d*ck... articles like "here's why its a good thing blah blah blah.. it sucks and facebook sucks

naryanrobinson
naryanrobinson

Reading the comments it seems like everyone's angry without having a clue why.

Is there a *reason* why this is a particularly terrible thing besides reasons that you've

been explicitly told aren't the case and also not including reasons that you've made

up in your own mind based on aaaaabsolutely nothing?

Sounds like most people see "Facebook" and "Oculus" and immediately go into

Sherlock Holmes mode to deduce that the only thing that's going to happen (and it

*will* be inevitable) is that Mark will make a giant planet-sized virtual PlayStation

Home equivalent which everyone will be forced into using as an extension of their

Facebook account, then use this deduction as a stepping stone to achieve a level

of "GIVE ME BACK MY FUCKING VIDEO GAMES YOU RICH GREEDY BASTARD"

You know the reason he jumped into buying it was because he could see it had a

future in video games and beyond, because that's where the money is.

He's not such an idiot that he thinks that its popularity and community interest will

carry over to whatever niche he forces it into.

GameYakuza
GameYakuza

but will facebook hold the rights to the patents developed by oculus and prevent others to make VR devices?

pacocasares
pacocasares

If Nintendo brought it: Awesome. If Sony brought it: Awesome, If Microsoft brought it: Awesome. Logitech, Samsung, anyone, anybody! I wished it was Valve instead. I would have been tappety doo dancing around like a fool. But Facebook? what the hell are they actually going to do it with? If they stick to the plans that the original creators had, sure, great, otherwise... its sad that even the souls that have dreams have a price. 2B is a bloody lot of money. I hope they do something great with it instead of just living la vida baby drinking margaritas. Also, how much did FB pay you to say that its all cool bananas? Is FB going to try to enter in the videogame market now too?

ziproy
ziproy

This is the second attempt at Gamespot trying to mislead us into thinking this is a good idea. It's not even new information, just everything that's been posted and then a last paragraph telling us "to be patient and believe in the honesty of capitalism".


No

Harrason
Harrason

"You won't need to log into your Facebook account every time you wanna use the Oculus Rift."

So I guess we still have to log into our Facebook accounts either way when there shouldn't be any sort of mandatory bullshit like that.

"Zuckerberg won't control Ocululs..."

"Ocululs"

"luls"

Thanks for that too, Justin.

baldeagle91
baldeagle91

Still not buying it.

More money does not always mean better. Just look at what overbloated budgets have done to the industry, never mind battlefield and COD.

 I really doubt the oculus will be the one to change facebook's ways.

megakick
megakick

SPAM

FACEBOOK VR

NO THANKS


MINECRAFT VR would have been great...

kyphe
kyphe

@Grey_Eyed_Elf message to naive elves, massive investments by giants like facebook require massive returns and puts accountants in charge of development so you grow up!

ArchoNils2
ArchoNils2

No, mainly because I do not understand Our language :p But either way, who are you to define whrn time spent on something is wasted and when not?

vlainstrike
vlainstrike

@davidgrey2014  would you also like a superior product, with stronger dev support and tools, delivered faster, and at a cheaper price - that is what $2B gets you. The consumer experience is going to benefit greatly as a result of this acqusition.

GameYakuza
GameYakuza

@HiroArka google glasses are augmented reality (a layer displayed above normal vison). a VR helmet is... VR but can be AR with a camera attached to the helmet that sends the real time feed to the helmet plus an 'augmented' display.

Lpedraja2002
Lpedraja2002

The reason why people are making a fuzz about this is because the product is not a gimmick. I assume you haven't been following this closely as you would have known otherwise but I advise to youtube the hell out of it so you see the results and the community/developer support behind it.

HiroArka
HiroArka

@DarthLod  I have had a chance to use the Dev Version and it was some wild stuff. If you want some good examples you should watch Markiplier on Youtube play some horror games with it.

jenovaschilld
jenovaschilld

@Goobshoeriot  I will agree with you - as soon as facebook purchased the tech, not invested in it !, heavy adds will soon to follow. I personally gave up myspace and facebook years ago - mostly due to crazily add laden pages and bandwidth slow pages related to user content. 

I am afraid the Virtual reality Oculus Rift will be a social spying add heavy machine that will justify itself that this is the only way it will get to living rooms. 

The biggest hurdle with VR right now is latency - which needs to be lower then 25ms for online- which will never be because the united states broadband is years behind other countries. Plenty of bb but it is all over the place: dsl, cable, wireless, and satellite. With no minimum requirements for latency or ping. 

But single player games like rpg, puzzles, adventure games, etc VR will work just fine at the house, problem is publishers want all games to be online - just the metadata collected alone is worth a ton of cash. When your online, how often, what you spend on, what you watch, etc.


OR and VR is the future - its coming, but it will be at least 9th gen before it is widely adopted like force feedback. With competition coming from all sides - it is not like OC invented VR- I am not even sure facebook got a good deal, but like you, I now know that the field has changed and not in a good way.  This will be a pro business - anti gamer- commercial heavy road all the developers will start heading down just to counter what the facebook buyout will mean.   ,


zeus_RO
zeus_RO

@philly215 I feel I must sound like a broken record but.... there was no 2 billion, just $400.000. That is 6 times less money than their kickstarter raised. I doubt they can hire new engineers and programmers and pay them with Facebook stock (stock that has been in a free fall ever since its listing).


Also, love the Futurama reference. When they enter the internet with goggles, they are assaulted by ads. They run away kicking and screaming. I really hope that's not the future.

rheaburton
rheaburton

I like your enthusiasm but a couple of points need raising, notch put 10,000 into that fund, 2 on his letter explaining his departure he gives you the mod to use for OR, but this is probably for dev kit users only to try and perfect the VR movement etc, Next fb has a lot of powerful shareholders that are more skeptical about this product and they bring pressure. Also if you watch/read business news you will see that not of lot of talk on this product is about the games, you keep hearing "how is this going to make them money" and talks of cross stuff with the other acquisitions like what's app.

He wasnt asking other devs to quit, he pulled out and was asked why.

The money will always help, but they had such a backing from serious professionals in the industry, easily could of asked for another round of funding before selling it all?

Anyway I hope the product becomes a success.

Thanatos2k
Thanatos2k

@zeus_RO This is how that works.  The people who get stock during the buyout are allocated a certain amount, but cannot sell them.  Over a period of time after the buyout, those stocks vest.  After a period of usually 2 or 3 years all stock will have vested and can be sold for their value in the stock market.  This is how companies force the people they acquire in these buyouts to work for them, because if they leave before those 2 or 3 years are up they'll lose out on most of the money they get from the buyout.

adub424
adub424

@zeus_RO I think that offering the newly acquired Oculus Rift stocks in the parent company Facebook is a brilliant plan. If Oculus Rift wants to recoup the lost 7% they will need to make a fantastic product which will turn a profit for the company. This is very similar to why companies offer employees stock options. I suspect this whole deal will produce a better more versatile Oculus Rift no a worse one. Boycotting this product based on hate for a company seems immature.

GameYakuza
GameYakuza

@zeus_RO the only reason that makes sense is patent trolling: facebook bought oculus to secure their research and sue anyone who will make VR devices with a similar design, and it will be more lucrative than hardware sales.

GameYakuza
GameYakuza

@naryanrobinson is it such a stretch? after all, micro$oft managed to make their controller mandatory for PC games. and why else would they buy it for such an insane amont of money? because no matter how you look at it, it is NOT a billion dollar opportunity.

MrEon256
MrEon256

@zeus_RO Checking facts before becoming a "broken record" is probably a good thing. ;)


You seem to be missing three zeros there...it was $400.000.000 (AKA 400 Million) not $400.000. In other words roughly 160 times more money than they got though the KS. It think that will do just fine for a while. ;)

naryanrobinson
naryanrobinson

@GameYakuza I was going to say something else but now I can't think of anything except that I can't *believe* you don't think this has the potential to make billions of dollars in the future.  I find it hard to understand how anyone could honestly hold such a myopic opinion of a virtually limitless emergent technology such as this.

zeus_RO
zeus_RO

@MrEon256 @zeus_RO Oh snap!! That's my bad. Don't know how I could have made such a mistake. Maybe it's because I don't usually work with those kind of numbers.

Thanks for the heads up. Wish I could edit my comments now...

naryanrobinson
naryanrobinson

@GameYakuza You can't simply look at the price and multiply it up with a new technology like this, even if it ultimately sells 0 units the opportunities for another buy-out are still there, and no offense, but your argument about 3D is even more stupid.  People watch TV to slump down and relax, that's why 3D TVs were doomed from the start.  The LeapMotion failed because there's no obvious way to "click" if you've got nothing physical *at all*.  So no, on a fundamental level it screwed up.

But I don't know why I'm bothering arguing at this level, saying "Well that failed so this will fail" is about as primitive an argument as it gets.  People used *exactly* the same argument about touchscreens to prophesize the failure of the iPhone and the modern smartphone generally, so I don't have any time for that viewpoint.

GameYakuza
GameYakuza

@naryanrobinson @GameYakuzathe device is 350$. considering manufacturing, it means they would need to sell tens of millions to make a profit.


backing it up:


only 10% of americans say they're interested in a 3D TV. people actually using them for 3D is in the 100000 range. if no one want to wear 3D glasses, they won't buy a damn helmet. basically, 3D tvs sell because 3D is more or less mandatory now, even if no one uses it.

and the hype? the leapmotion, a PC kinect, is relatively cheap, precise and well designed. it was expected to sell 5 million. it sold 500000. andlike the oculus, it was well advertized to its target audience, but almost unknown to the average consumer.

believing something will sell because you like it is much worse than coming with crazy theories.