Facebook announced that they bought virtual reality company Oculus today for about $2 billion, although Reddit had the story first:

So no way to confirm this, but my friend works in the same building as Oculus, and he ran into Mark Zuckerberg taking the elevator to Oculus’ floor.

Lots of people are posting strong opinions online today, either excited (because they believe the acquisition will speed up development of the Rift) or repulsed (because they hate Facebook). These opinions are boring, but people seem to have overlooked a few interesting details.


Facebook’s deal to buy Oculus VR for $2 billion happened relatively quickly and the negotiations were hammered out over the last five days during the industry’s Game Developer Conference in San Francisco, according to sources familiar with the deal.

There’s a few ways to interpret how quickly this deal went down. Optimistically: Facebook saw Sony announce their VR thing and decided that they wanted to get into the market while the getting was good. More realistically: Oculus’ investors got spooked by Sony’s announcement and pressured the company to sell while they could still make a profitable exit. That’s why “sources familiar with the deal” (who are probably Chris Dixon from Andreessen Horowitz) told the Verge that although investors offered Oculus more money to continue, they thought this was a better deal.

Ultimately the quality of the deal depends a lot on how much you value Facebook stock, which is primarily what Oculus got paid in:

[The acquisition] 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).

I join a lot of the people on Twitter who feel that this acquisition was somehow kind of sad, which is a curious emotion to feel about a social network buying a hardware startup. If I had to hazard a guess, here’s what’s sad about it: Oculus was this big, open question in gaming. Just this weekend I was on Giant Bomb with Phil Fish and Zoe Quinn, and we were speculating wildly about the ways that the Rift would allow us to explore new worlds, understand body dysmorphia, and have computer sex. We hoped that Oculus could show us what was next for an art form that we love. And they did, and it sucked: Oculus will be a hobby project owned by an advertising company, used some day to collect personal information from “users” which will be sold to the highest bidder.

This outcome for Oculus is particularly sad because of how they began - the company first got funding to work on the Rift on Kickstarter, where they raised $2.5 million from almost 10,000 backers. The implicit promise of such a campaign is that Oculus would have had the freedom to run their company how they wanted, and not have had to negotiate with investors or find those investors an “exit” the minute there was credible competition. Don’t get me wrong, it’s no surprise that investors like Andreessen Horowitz don’t give a fig about art and only want to make a return on their investment, we already know that these guys are squares and hacks. But it does make me sad that the Oculus folks believed otherwise. And it makes me sad to think that if this how VCs steer cool new technology that’s supposed to change the world, that they will eventually undo their own livelihood, like the story of the scorpion and the fox:

"I couldn’t help it. It’s my nature."

Palmer Lucky, the founder of Oculus, is already doing “damage control” on Reddit, posting:

Facebook is run in an open way that’s aligned with Oculus’ culture. Over the last decade, Mark and Facebook have been champions of open software and hardware, pushing the envelope of innovation for the entire tech industry.


I’m proud to be a member of this community — thank you all for carrying virtual reality and gaming forward and trusting in us to deliver. We won’t let you down.

The top comment:

You already did.

  1. interactivetechart reblogged this from tinyrunaway
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  3. existevenism reblogged this from wilwheaton
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  8. irresponsiblejam reblogged this from maxistentialist and added:
    This entire thing makes me so sad. There is no explanation for this that makes sense.
  9. ranapip reblogged this from maxistentialist and added:
    "Mark and Facebook have been champions of open software and hardware." I’m reminded of the tacit (?!) insult in Bre...
  10. disco-dancer-donna reblogged this from wilwheaton
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  13. whatevernevermind reblogged this from maxistentialist and added:
    Max’s take on Facebook acquiring Oculus is pretty spot on. It is sad. No matter what you think about Facebook, it’s just...
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    I didn’t care about this thing even before the sale because I immediately said it was going to be as cared about as...
  19. martinvangurren reblogged this from maxistentialist and added:
    I underestimated how much of that was in stocks. They immediately lost a chunk of that with the drastic drop in Facebook...
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