It's being reported today that Facebook will be acquiring two-year-old Oculus VR Inc., a maker of virtual-reality glasses for gaming, for $2 billion, buying its way into the fast-growing wearable devices arena with its first-ever hardware deal.
On Tuesday, Facebook said virtual-reality technology could emerge as the next social and communications platform.
"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," Facebook co-founder and Chief Executive Mark Zuckerberg said in a conference call with analysts and media on Tuesday to discuss the acquisition.
"We're making a long-term bet that immersive, virtual and augmented reality will become a part of people's daily life," the 29-year-old Zuckerberg said, noting that wearing the Oculus goggles was "different than anything I've ever experienced in my life."
While Oculus will operate as an independent company, Zuckerberg stressed that Facebook's plans for Oculus extended well beyond games.
"Imagine enjoying a court side seat at a game, studying in a classroom of students and teachers all over the world or consulting with a doctor face-to-face - just by putting on goggles in your home," he said.
In addition to game makers, Oculus has garnered some interest from developers keen on creating apps in areas like architecture, automobiles, marketing and education, the company has said.
"The question this time is whether Facebook is too early or simply betting on the wrong platform. This won't be known for some time. But if it gets the platform right, we're relatively confident that Facebook will develop an effective monetization strategy for it, thus boosting its overall financial growth," Mahaney said.
Market leaders are looking to virtual reality and 3D environments as a possible future market. Last year Apple acquired PrimeSense, an Israeli 3D sensing company that was behind Microsoft's Kinect.
We covered some of their patents in a special report to demonstrate the time of work they patented to give us a sense of what Apple was buying and could use in the future. One of the projects involves a 3D headset like the one Oculus is working on for future apps beyond games.
Zuckerberg's thinking of where VR technology could be headed in the next decade is likely shared by many industry leaders. The question becomes, which of Silicon Valley's companies will give such a product life and the right marketing edge to make it a market winner. At the moment, it's too early to determine which company will make it happen.
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