Massive and shocking news this evening as it has emerged that the VR headset company Oculus Rift have been bought by… Facebook. Yeah – that Facebook. And they spent $2bn on the company too. What on earth are they thinking? Here’s five questions we’re asking now the deal has gone through.
This is the question that currently has pretty much everyone scratching their heads. There doesn’t appear to be any obvious “synergies” to use an awful business-ism. Usually when companies by other companies, they think that the two companies working together can provide some benefits. Say, less competitors, or cheaper components, or better distribution. In the case of this deal, Oculus is a pioneering virtual reality headset company that is currently building a headset designed for gaming. And Facebook is… well… Facebook.
Gaming-wise, Facebook don’t currently appear interested in the sorts of blockbuster games that a headset would entail – hardcore Call of Duty games is where the headset would appeal. Unless Facebook have bizarrely grand plans for Farmville… this still seems a little odd.
2) Umm…. Why?
The only clue we have so far is a statement from Facebook founder and CEO Mark Zuckerberg, which was released following the acquisition:
Our mission is to make the world more open and connected. For the past few years, this has mostly meant building mobile apps that help you share with the people you care about. We have a lot more to do on mobile, but at this point we feel we’re in a position where we can start focusing on what platforms will come next to enable even more useful, entertaining and personal experiences.
This is where Oculus comes in. They build virtual reality technology, like the Oculus Rift headset. When you put it on, you enter a completely immersive computer-generated environment, like a game or a movie scene or a place far away. The incredible thing about the technology is that you feel like you’re actually present in another place with other people. People who try it say it’s different from anything they’ve ever experienced in their lives.
So that sounds pretty intriguing. Outside of gaming, there have been a few interesting examples of the Oculus being used more ‘social’ uses – like the below video showing an app where you can sit in a virtual theatre and watch a film together – in sync – with other users.
Does Zuckerberg think that this is how we’ll live in the future? Rather than simply transcribe all of our lives to Facebook, is the expectation that our lives will simply become Facebook?
3) Er.. Seriously… Why?
The acquisition of Oculus was pretty much inevitable. It’s probably the first company to actually have a decent chance at doing “VR” right after decades of expectation, and it has been infused by a wildly successful Kickstarter campaign, demonstrating massive support amongst actual real people.
Given Oculus was a stand-alone start up, as soon as things started looking tasty, it is no surprise that one of the big firms got the chequebook out and paid – the only surprise here is that it is Facebook and not… say, Microsoft (who could use a VR headset of their own to match Sony’s recently unveiled Morpheus headset – which like the Oculus Rift, is still in development).
Similarly I can only imagine that tonight the CEOs of everyone from Apple, to Intel to Samsung are all going to bed kicking themselves that they didn’t manage to buy Oculus first.
4) C’mon, this is a joke, right?
Seriously – this actually happened. Who knows where it could lead. Could we reach a point where it now feels like you’re actually inside all of those tedious wedding photos?
Slightly more seriously – my prediction, which I’m posting on TechDigest so that I can link to it on the off-chance that I’m right – is that Oculus will be kicked around by Facebook for a couple of years with not much to show for it… before being sold to someone more relevant, like Microsoft – for many billions more than Zuckerberg paid for it.
A bit like Google’s Motorola acquisition for instance – they bought the entire mobile phone division, hoovered up a few interesting patents, and then sold it off again to Lenovo, which is a much more natural home.
5) So what’s the only reasonable explanation for the acquisition?
What’s particularly interesting is the speculation on how it could have happened. As former Slate blogger Matt Yglesias noticed, though Mark Zuckerberg now owns less than 50% of Facebook – there’s a quirk in Facebook’s corporate governance which means that his votes on the board of the company account for 57% of the votes. So basically… what he says, goes.
So this makes me wonder… is the Oculus acquisition less the result of clever corporate strategy – of which we lowly peons cannot possibly understand, and more Mark Zuckerg essentially practicing a hobby?
Let’s face it – Zuck is a 29 year old nerd – just like you or me, he’s going to be thinking that the Oculus Rift looks pretty cool. Maybe he just wants to have a go? Maybe he just wanted to buy a development kit but ended up buying the whole company? Either way – he’s got something new to play with.
By James O'Malley | March 26th, 2014