Facebook Looks to the Future with $2b Acquisition of Oculus Rift
Facebook announced yesterday that it’s moving to make yet another multi-billion dollar acquisition of a burgeoning tech firm. The most surprising part is that, unlike its $19 billion purchase of WhatsApp, the house that Zuckerberg built has plans to shell out a cool $2 billion for Oculus Rift, a virtual reality company. While WhatsApp had a large and devoted user base in the proven social messaging sphere, Facebook’s move to acquire a virtual reality technology company — a technology and business sector that is still widely considered to be unproven — is shocking to say the least.
A Move to ‘Future Proof’ Facebook
The latest expansion to Facebook’s ever growing menagerie of tech companies seems to be crafted to protect Facebook against the future.
Speaking of the acquisition, Facebook CEO Mark Zuckerberg said, “The history of our industry is that every 10 or 15 years there’s a new major computing platform, whether it’s the PC, the Web or now mobile.”
For the young billionaire, VR might just be the thing that takes mobile’s place in just a few years time. That shouldn’t be read to mean that Zuckerberg or anyone else at the social media powerhouse thinks that Oculus Rift and the virtual reality industry are sure things. Rather, they’re very realistic and open about the fact that the purchase, small compared to the buyout of WhatsApp, is a calculated risk. Speaking with analysts on Tuesday, Zuckerberg made this very clear. “We’re making a long-term bet that immersive, virtual and augmented reality will become a part of people’s daily life.”
“I think that this is a poor decision by Facebook,” explains Jared Haggerty, Solutions Consultant at Databerry. “They’re trying to break into a market that they’ve never been in before. Microsoft and Sony are currently dominating the gaming industry. In order for Facebook to break into that market, they’re going to have to come up with something that is truly innovative and grabs the gamers attention. But yet, I applaud them for trying something new and out of the box.”
And a Nod to Past Mistakes
Facebook’s move into dicey waters is no doubt spurred on by its failure in the mobile gaming world. Of course, Facebook has done alright with its onsite gaming efforts, having reported $1.5 billion in revenue just from popular games on the platform, like Farmville.
When mobile began its boom, however, Facebook completely missed the train. Both Google and Apple jumped on-board, giving developers great platforms to develop games and other apps for. Meanwhile, both services were able to charge a 30% platform tax on all transactions that moved through their stores, a fact that undoubtedly earned the tech giants billions. Facebook had to settle for charging that tax on its traditional desktop games, a market that is decidedly dying down as mobile continues its geometric growth. If Zuckerberg’s bet pays dividends, missing out on emerging technologies isn’t a mistake Facebook will have made twice.
Tell us what you think: does this purchase show thoughtful foresight on the part of Facebook, or is the social media behemoth grasping at straws?