The California-headquartered Oculus’ flagship product – Oculus Rift – is a goggle-like “virtual reality headset” for video gaming.
Commenting on the acquisition, Facebook founder Mark Zuckerberg said, “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.”
The offer includes USD 400 million in cash and 23.1 million shares of Facebook common stock (valued at about USD1.6 billion). Additionally, the agreement also provides for an additional USD 300 million earn-out in cash and stock based on the achievement of certain milestones.
The transaction is expected to close in the second quarter of 2014.
The social networking giant in a statement said while the applications for virtual reality technology beyond gaming are in their nascent stages, several industries are already experimenting with the technology, and Facebook plans to extend Oculus’ existing advantage in gaming to new verticals, including communications, media and entertainment, education and other areas.
“Given these broad potential applications, virtual reality technology is a strong candidate to emerge as the next social and communications platform,” it added.
According to Facebook, Oculus has received more than 75,000 orders for development kits for the Oculus Rift.
“We are excited to work with Mark and the Facebook team to deliver the very best virtual reality platform in the world,” said Brendan Iribe, co-founder and CEO of Oculus VR. “We believe virtual reality will be heavily defined by social experiences that connect people in magical, new ways. It is a transformative and disruptive technology, that enables the world to experience the impossible, and it’s only just the beginning.”