It’s easy to forget that Facebook has its roots in gaming. Remember how annoying it was to receive those notifications from your friends to play Farmville and Words With Friends? No, I don’t want to help you milk your cows or try to beat your high score. I just wanted to creep on my friends in peace, social gaming be damned.
Then, today’s surprising news struck:
I’m excited to announce that we’ve agreed to acquire Oculus VR, the leader in virtual reality technology.
You would think that after writing nine zeroes on a check to buy Whatsapp last month, Facebook would be content with being thrifty.
Nonsense, Zuckerberg declared. I wants it. I wants it now.
$2 billion later, Facebook now owns Oculus VR, the makers of the Rift virtual reality headset.
Barely two years after successfully raising $2.4 million in a Kickstarter campaign, a company that has many giggling in anticipation about the future of gaming is now joining a company famous for distributing games that teach you how to tend to your virtual crops.
In one swift move, countless gamers’ dreams of playing Titanfall on the Oculus Rift quickly went up in smoke. Upon hearing the news, Minecraft’s creator didn’t hesitate to kill a potential deal for building a version of the hit game for the Oculus platform.
Many already are attempting to explain why this move makes any sense. Let’s start with Zuckerberg himself:
Oculus’s mission is to enable you to experience the impossible. Their technology opens up the possibility of completely new kinds of experiences.
What experiences does that mean exactly?
This is really a new communication platform. By feeling truly present, you can share unbounded spaces and experiences with the people in your life. Imagine sharing not just moments with your friends online, but entire experiences and adventures.
I think Matthew Panzarino has one of the best explanations so far:
If Facebook wants to be a major Internet pillar, and I don’t doubt that’s what Mark Zuckerberg wants — then it is missing a major key component that all of its competitors owns: A conduit.
Apple has iOS, Google has Android, Amazon has its fork of Android called FireOS, Microsoft has Windows Phone.
Facebook dominated desktop for years. As we all know, that all changed with the advent of mobile computing. With people spending more time on their smartphones, Facebook naturally worried that users would visit their website less often. Furthermore, upstarts like Twitter and Instagram represented a new wave of mobile-first social networks poised to send Facebook into the same category as its predecessor, Myspace.
No worries, Zuckerberg said. We’ll just buy them both.
He almost got his wish. Half of it anyways.
Virtual reality has the potential to have the same impact as computers, the Internet, and smartphones. Beyond just gaming, virtual reality could be a major boon for industries like health care, education, and entertainment. Right now, it hasn’t gotten anywhere close to that level, but Facebook is betting it will. A $2 billion bet to be exact.
What can Facebook provide Oculus VR besides a very generous checkbook? Hardware is a notoriously expensive business to find success and Facebook isn’t a hardware company. They make software.
In some ways, this deal is very similar to Google buying Nest earlier this year. Google is also primarily a software company; their web applications are used by millions. Just like Facebook, they make most of their revenue from advertising.
In recent years however, Google has shifted gears and is now heavily invested in areas as diverse as autonomous vehicles, wearables, and robots. You can’t call Google a software company anymore.
One might argue that Facebook is taking some lessons from Google after it bought Android in 2005. In hindsight, the purchase seemed like a no-brainer but back then, there were some doubts about what Google could do with the company. Was Google going to build its own phone? Why would it want to deal with the carriers? Or was it going to become a carrier itself?
Now, Facebook is facing these same types of doubts and questions after buying Oculus. I think a lot of the negative sentiment about Facebook ruining Oculus as a gaming platform is somewhat misguided. Facebook doesn’t have a track record for making a company worse off after acquiring it (count your blessings it wasn’t Yahoo). After acquiring Instagram in 2012, Facebook has kept the service largely intact, if not better. At the very least, having Facebook’s backing will ease the pressure off Oculus’ shoulders to produce a commercially successful product right away. Instead, the company can focus on making its technology even better.
With today’s deal, Facebook has found its own Android. It’s a risky bet and it might be years before we will know the fate of this move. One thing’s for certain though. Virtual reality is one step farther away from science fiction.