According to a press release issued by PR Newswire, Facebook has today announced that it has agreed to purchase Oculus VR Inc for $2 billion.

In a move that was unknown even to some within Oculus, Facebook has agreed to acquire the company for $2 billion—$400 million in cash and 23.1 million shares of Facebook stock (valued at $69.35 per share). Talk about a quick turnaround for the investors that handed over $75 million to Oculus less than one year ago.

In addition to the official press release (below), Oculus has just released a series of new blog posts concerning the announcement:

From CEO Brendan Iribe’s Letter to the Team:

“Oculus will continue to operate independently. We’re staying Oculus, we’re still building the Oculus Rift, our email addresses are remain @oculusvr.com, and most importantly, our hoodies will still say Oculus.

By partnering with Facebook, we’ll be able to build a better product with zero compromises and a focus on growth. We’ll also be investing more heavily in made-for-VR content and exploring other opportunities to accelerate our vision,” reads the letter to Oculus from CEO Brendan Iribe.

From Founder Palmer Luckey’s Future of Virtual Reality:

When Facebook first approached us about partnering, I was skeptical. As I learned more about the company and its vision and spoke with Mark, the partnership not only made sense, but became the clear and obvious path to delivering virtual reality to everyone. Facebook was founded with the vision of making the world a more connected place. Virtual reality is a medium that allows us to share experiences with others in ways that were never before possible.

Facebook CEO Mark Zuckerberg has also penned an update regarding the announcement.

Post by Mark Zuckerberg.

Live Investor Webcast Happening Now

Facebook is hosting an investor call regarding the announcement right now! You can tune in to the webcast here.

Here is the full press release reproduced below:

MENLO PARK, Calif., March 25, 2014 /PRNewswire/ — Facebook today announced that it has reached a definitive agreement to acquire Oculus VR, Inc., the leader in immersive virtual reality technology, for a total of approximately $2 billion. This includes$400 million in cash and 23.1 million shares of Facebook common stock (valued at $1.6 billion based on the average closing price of the 20 trading days preceding March 21, 2014 of $69.35 per share).  The agreement also provides for an additional$300 million earn-out in cash and stock based on the achievement of certain milestones.

Oculus is the leader in immersive virtual reality technology and has already built strong interest among developers, having received more than 75,000 orders for development kits for the company’s virtual reality headset, the Oculus Rift. 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.

“Mobile is the platform of today, and now we’re also getting ready for the platforms of tomorrow,” said Facebook founder and CEO, Mark Zuckerberg. “Oculus has the chance to create the most social platform ever, and change the way we work, play and communicate.”

“We are excited to work with Mark and the Facebook team to deliver the very best virtual reality platform in the world,” saidBrendan 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.”

Oculus will maintain its headquarters in Irvine, CA, and will continue development of the Oculus Rift, its ground-breaking virtual reality platform.

The transaction is expected to close in the second quarter of 2014.

Webcast and Conference Call Information

Facebook will host a 30-minute conference call to discuss the acquisition at 3:15 P.M. PDT / 6:15 P.M. EDT today. The dial-in number for the call is (866) 751-3284 (toll free) and (973) 935-8772 (international); participants will be connected by an operator.  The live webcast of the call can be accessed at the Facebook Investor Relations website at investor.fb.com. Facebook uses the website http://investor.fb.com as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD.

Following the call, a replay will be available at the same website.  A telephonic replay will be available for one week following the conference call at (855) 859-2056 or (404) 537-3406, conference ID 18971947.

About Facebook

Facebook’s mission is to give people the power to share and make the world more open and connected. People use Facebook to stay connected with friends and family, to discover what’s going on in the world, and to share and express what matters to them.

About Oculus

Founded in 2012, Oculus VR, Inc. is building a next-generation consumer virtual reality platform. The company’s first product, the Oculus Rift, is a virtual reality headset that allows you to step inside a digital environment and feel as though you are truly there. The Oculus Rift provides an immersive, stereoscopic 3D view with an ultra-wide field of view and low latency head tracking that lets you look around naturally in 360 degrees. For more information, please visit oculus.com.

Facebook Contacts

Investors:
Deborah Crawford
investor@fb.com / investor.fb.com

Press:
Tucker Bounds
press@fb.com / newsroom.fb.com

Oculus Contact:
media@oculusvr.com

Forward Looking Statements

This press release may be deemed to contain forward-looking statements, which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including the expected completion of the acquisition, the time frame in which this will occur, future uses of virtual reality technology and product introductions, the expected benefits to Facebook and Oculus from completing the acquisition, market opportunities for virtual reality technologies, and the expected performance of Facebook following completion of the acquisition. Statements regarding future events are based on the parties’ current expectations and are necessarily subject to associated risks related to, among other things, regulatory approval of the proposed acquisition or that other conditions to the closing of the deal may not be satisfied, the potential impact on the business of Oculus due to the announcement of the acquisition, the occurrence of any event, change or other circumstances that could give rise to the termination of the definitive agreement, and general economic conditions, technological changes, competition, unforeseen development delays, product defects, customer and market acceptance of products incorporating virtual reality technologies, the fact that virtual reality is an emerging and unproven technology, regulation, and integration risks, among others. Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements. For information regarding other related risks, see the “Risk Factors” section of Facebook’s Annual Report on Form 10-K for 2013. The forward-looking statements included herein are made only as of the date hereof, and neither party undertakes an obligation to revise or update any forward-looking statements for any reason.

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Ben Lang
Ben is the world's most senior professional analyst solely dedicated to the XR industry, having founded Road to VR in 2011—a year before the Oculus Kickstarter sparked a resurgence that led to the modern XR landscape. He has authored more than 3,000 articles chronicling the evolution of the XR industry over more than a decade. With that unique perspective, Ben has been consistently recognized as one of the most influential voices in XR, giving keynotes and joining panel and podcast discussions at key industry events. He is a self-described "journalist and analyst, not evangelist."
  • Psuedonymous

    I’m not to worried about the hardware itself while Carmack remains on board, but I will be intensely wary of any sort of software platform from Oculus.

  • Alkapwn

    I thought this was a joke at first. Still dunno how to process this.

  • nathanimator

    Whoa. Didn’t see that coming at all. My knee jerk reaction is to see facebook and recoil, but the more I think about and I think this is probably a really good thing for VR on the whole. It certainly will be brought into the public consciousness a lot more because of it. Hopefully it’ll ensure that VR actually happens this time and will remove a lot of the manufacturing roadblocks and what not for the Oculus team. Still shocking though.

  • Richard Neal

    I really hope this deal falls through. I do not want Mark Zuckerberg driving the future of VR.

  • Chris Given

    Im not surprised at all… Facebook could be totally replaced by VR so this is a pre-emptive strike so that facebook will continue to exsist in the metaverse albeit in a much different form… They have all the money in the world and VR presents countless opportunities to innovate in the social media scene… Im not sure if this is a good thing or a bad thing but so long as they continue to use VR enthusiast at Oculus then it should all work out okay… Maybe we might get some really cool Virtual Hangouts… Maybe we will all have Virtual homes representing us and we can literally visit each others homes the same way we browse each others facebook pages… And organizations could have entire buildings… With the kind of money Facebook can throw at this thing there is a part of me that’s kinda excited about what might all come about…

  • elecman

    Consider this. Facebook is the biggest stock bubble since yahoo was worth more then the entire GDP of New Zealand.

    Sounds crazy? Well, facebook currently is worth about the same as the entire GDP of New Zealand.

    If you can’t spot this bubble and the pending catastrophe then you need to wake up.

  • Ammon

    Great. Now you can kiss any semblance of privacy goddbye when you use your Oculus RIft. Nothing like knowing the NSA is enjoying every experience with you!

    • Ammon

      “good bye”, not “goddbye”…

  • Mageoftheyear

    I would never have expected this move, perhaps that makes me naive but I’m still kinda in shock. Regardless it is super disheartening to see the majority of Rift supporters turn on Oculus like a pack of rabid wolves with piranha RPGs.
    That stings more than the announcement. I have no option but to trust in the same fundamentals that drove the company yesterday. I still believe that with all of their heart Oculus will strive to deliver the best VR experience they possibly can.
    Congratulations Oculus, please guard your vision and method with vigilance.

    And please, any of you reading this that are angry with them for the decision they made remember that there are people at the other end of your spears – it hurts like a motherfucker to be ripped to shreds by the very community you were proud to have just an hour or two ago. Please take a moment to breathe. No matter how you feel about facebook the people at Oculus have rewarded our trust so far. We have nothing to lose by extending the benefit of the doubt towards them now and if ever they needed support (albeit even counted in ounces) they need it now during this backlash.

    Well, on the bright side I guess Oculu is reconsidering that lawsuit.

  • ElectroPulse

    HOLY crap… Did not see that coming. I really hope this is a good thing for Oculus… It’s definitely got a lot of potential, with a huge amount of funding and advertising. Talk about a big name getting behind it.

  • EnterTheRift

    Just Incredible!

  • Simon

    Definately a shocker there, but like others have said this maybe makes sense. Facebook wants to create a space where users can interact/spend money, and where it can charge other companies to access/advertise to those users….. not somewhere where I’d like to visit, but I guess I’m not a average ‘Joe’.

    As an enterprising hacker, I’m sure that there is no way that they can lock down the hardware to prevent other uses. So I would expect it to be sold with normal margins (rather than at a loss), which also raises the question on whether multiple-vendor/device support would exist and result in some form of standardization – which would be a good thing for the VR community as a whole.

  • deadering

    I felt physically sick when I read this. We’ve heard before “oh we’re still the same company with the same ideals” and seen such terrible failures, so it’s not surprising how many of us are apprehensive (besides the fact it’s facebook of all companies). I don’t think this could have come at a worse time, with the amazing announcement of DK2 being so great and still so cheap.

    I guess all we can do now is hope that the core Oculus team is still as dedicated as ever and will use this massive revenue boost to truly make the best HMD for years to come. And, you know, not let Facebook shit all over everything.

  • xxxyyy

    I feel like I need to throw up… is this normal?
    So much passion, so much love… and so much hate and repugnance… mixed together.
    I’m speechless.

  • faceevil

    We do not negotiate with terrorists.

  • Kemic

    There are two things I hope don’t result from this. 1) Facebook and use of Facebook not being shoved down our throats or in our faces as a need in this partnership.
    2) The inevitable CandycrushVR, FarmvilleVR, and their ilk…

  • snake0

    GOD

    DAAAAYUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUMMMMMMMMMMMMMMMMMMMMMMMm

    Well congrats to Palmer, he went from being a student to a billionaire in the space of 2 years

    VR is going to suck now though lol