Facebook (FB) continued its massive spending spree a few weeks back, purchasing Oculus VR, a technology company that specializes in virtual reality, for $2 Billion. This acquisition occurred a mere few months after Facebook purchased messaging service WhatsApp, for $19 Billion. Oculus VR is widely known for its popular Kickstarter Campaign for Oculus Rift, a virtual reality headset designed around 3D gaming. As of March 31st, Oculus VR had over 9,500 backers and almost $2.5 Million in funds pledged, making it one of the most successful Kickstarter Campaigns to date.
Facebook’s CFO, David Ebersman, said that the driving force behind the deal was the gaming business, but he believes the technology itself is a long-term investment for Facebook. Ebersman believes that, in time, Oculus VR will delve into other areas of interests, such as entertainment and communication. Mark Zuckerberg said in a statement on his Facebook page that Facebook does not plan to interfere with the immersive gaming aspect of Oculus VR, but believes it will eventually become a new and innovative communications platform.
The Oculus VR acquisition came as a shock to many, and caused a large uproar amongst avid gamers. Many fans of Oculus Rift are critical of the deal because of Facebook’s past privacy issues and its intrusive advertising. Many gamers are concerned their personal information will be sold, or that Facebook may try to monetize its acquisition by using in-game advertisements (which many gamers believe will ruin their gaming experiences). However, Facebook’s investment in this new technology brings the evolving virtual reality industry into the limelight.
Many of the original Kickstarter-backers have complained because they will not receive any monetary benefit from the acquisition – think of it as receiving VC funding without having to sell equity as compensation. The backers initially invested in the idea of the technology and vision of the company, but now feel betrayed because Oculus cashed out and sold to an increasingly unpopular Facebook.
The concerns of many gaming enthusiasts are well supported, yet the public really doesn't know what to expect from Oculus VR and Facebook. Will Oculus Rift become an advertisement-ridden gaming experience? Will it become an expensive 3D-Farmville machine? Only time will tell as Oculus VR continues to develop its products in Facebook’s secretive labs.