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Facebook Enters the Matrix and Buys Oculus VR for $2 Billion

Facebook Enters the Matrix and Buys Oculus VR for $2 Billion
Photograph by Jae C. Hong/AP Photo

Facebook just announced one of the most peculiar acquisitions in its 10-year history. It has agreed to buy virtual reality headset maker Oculus VR for $2 billion in cash and stock. “There are not that many companies building technologies that can be the next major computer platform,” said Facebook Chief Executive Officer Mark Zuckerberg in a conference call with investors. “We are making a long-term bet that immersive virtual reality will be a part of people’s lives.”

I recently wrote about Oculus, which is developing the Rift virtual reality system for PCs. It’s racing against Sony, which also has its own prototype VR technology, called Project Morpheus, for the PlayStation 4. The Rift, which looks like a thick pair of darkened goggles, lets gamers immerse themselves in a rich, computer-generated 3D world. It’s not yet for sale in stores, but the company just unveiled a kit for developers, which sells for $350. The startup, based in Irvine, Calif., was founded by the excellently named 21-year-old Palmer Lucky. It has one of the most famous game developers in the world as its chief technology officer—John Carmack, the maker of iconic shoot-’em-ups Doom and Quake.

March 25 (Bloomberg) -- Oculus VR, a virtual-technology company, was just acquired by Facebook for $2 billion. Their ski goggles-like prototype, the Oculus Rift, has gamers spellbound with anticipation for its release. Bloomberg Businessweek's Brad Stone visits the company and tests out the headset. (Source: Bloomberg)

So what does Facebook want with a VR headset, particularly one that isn’t yet real—and, when it does become real, will probably face serious competition? In a post on his Facebook page, Zuckerberg said the device can facilitate virtual social connections. “The incredible thing about the technology is that you feel like you’re actually present in another place with other people,” he wrote. “People who try it say it’s different from anything they’ve ever experienced in their lives.”