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Facebook buys virtual reality headset start-up for $2bn | Facebook buys virtual reality headset start-up for $2bn |
(about 21 hours later) | |
Facebook has announced it will buy Oculus VR, a Californian company which specialises in virtual reality products, for around $2bn (£1.2bn). | Facebook has announced it will buy Oculus VR, a Californian company which specialises in virtual reality products, for around $2bn (£1.2bn). |
The start-up's flagship product, the Oculus Rift, is a goggle-like "immersive" headset for video gaming. | The start-up's flagship product, the Oculus Rift, is a goggle-like "immersive" headset for video gaming. |
It was developed with funds raised through crowdfunding site Kickstarter, and subsequent investment. | It was developed with funds raised through crowdfunding site Kickstarter, and subsequent investment. |
Facebook's boss, Mark Zuckerberg, said Oculus' technologies could "change the way we work, play and communicate". | Facebook's boss, Mark Zuckerberg, said Oculus' technologies could "change the way we work, play and communicate". |
Investors appeared sceptical, however, with Facebook shares in New York down 6% by lunchtime. | |
The Oculus Rift has yet to be released, but more than 75,000 orders for development kits have already been placed, according to the social media giant. | The Oculus Rift has yet to be released, but more than 75,000 orders for development kits have already been placed, according to the social media giant. |
In a statement released on Tuesday, Facebook said it plans to expand the use of Oculus technologies to include "communications, media and entertainment, education and other areas". | In a statement released on Tuesday, Facebook said it plans to expand the use of Oculus technologies to include "communications, media and entertainment, education and other areas". |
Oculus' crowdfunding campaign raised $2.4m (£1.5m), 10 times the amount originally sought. | Oculus' crowdfunding campaign raised $2.4m (£1.5m), 10 times the amount originally sought. |
It subsequently received a further $75m from investors. | It subsequently received a further $75m from investors. |
The Rift headset was widely heralded at the CES technology show in Las Vegas in January, where Sony also announced a rival product. | The Rift headset was widely heralded at the CES technology show in Las Vegas in January, where Sony also announced a rival product. |
The deal includes $400m in cash and just over 23 million Facebook shares, valued at $1.6bn. | The deal includes $400m in cash and just over 23 million Facebook shares, valued at $1.6bn. |
Oculus employees will also receive an additional $300m if the company achieves certain targets. | Oculus employees will also receive an additional $300m if the company achieves certain targets. |
Commenting on the deal, Mr Zuckerberg said: "Mobile is the platform of today, and now we're also getting ready for the platforms of tomorrow." | Commenting on the deal, Mr Zuckerberg said: "Mobile is the platform of today, and now we're also getting ready for the platforms of tomorrow." |
'Shame on you' | |
It is the latest purchase for Facebook, which last month spent $19bn on mobile messaging platform WhatsApp. | It is the latest purchase for Facebook, which last month spent $19bn on mobile messaging platform WhatsApp. |
A number of Oculus VR's Kickstarter backers took to the original funding page to express discomfort at the move, but some rallied around the decision. | |
"Shame on you Palmer, shame on you," wrote user Xod, referring to Palmer Luckey, Oculus VR's founder. | |
"Facebook is smart, they saw the future, just like the rest of us here, and bought it for two billion. They got a bargain," wrote backer Jeff McMorris. | |
Games developers were also split about the Oculus VR move. | |
Markus "Notch" Persson, creator of popular online game Minecraft, said he had cancelled an Oculus deal. | |
"We were in talks about maybe bringing a version of Minecraft to Oculus," he tweeted. "I just cancelled that deal. Facebook creeps me out." | |
John Carmack, Oculus VR's chief technology officer, said that Facebook's financial muscle would allow adequate resources for the company. | |
"For the record, I am coding right now, just like I was last week," Doom co-creator Mr Carmack said. "I expect the FB deal will avoid several embarrassing scaling crisis for VR." | |
Facebook's share value fell more than 2% in early trading on Wednesday. |