Mark Zuckerberg is making a $2 billion bet on a nascent virtual gaming company founded by 21-year-old who got his start on Kickstarter.
The Facebook CEO on Tuesday announced plans to buy Oculus VR, which makes virtual-reality gaming goggles, for $400 million in cash and 23.1 million shares of Facebook common stock.
Based on Facebook’s closing price Tuesday of $64.89 a share, the deal gives Oculus $1.5 billion in stock.
“Oculus has the potential to be the most social network ever,” Zuckerberg said in a conference call on the acquisition. “This could change the way we communicate with our friends, family and colleagues,” he said.
Oculus was launched through crowdfunding platform Kickstarter in 2012 by Palmer Luckey, a college drop-out who wore flip-flops during his recent presentation at DICE, a major gaming conference in Las Vegas.
Since its start, the company has sold more than 75,000 development kits, which center on its Oculus Rift goggles. The product, which is still in the development stage, can be ordered from the company’s website for $350.
Zuckerberg said the two-year-old Irvine, Calif., company will continue to focus on its gaming technology for the near-term, but that “gaming is just the start.”
Facebook hopes to help the company quickly move toward more practical applications of its technology, such as shopping, visiting a doctor or friends.
“Imagine enjoying court-side seats at a game … or going shopping in a virtual store … just by putting on goggles in your own home,” Zuckerberg said.
The $2 billion deal comes just one month after Facebook plopped down a whopping $19 billion to buy texting application Whats-App.
Zuckerberg said such deals are “rare” and that the current rate of acquisitions “will certainly not continue.”