Facebook Inc’s purchase of Oculus raises questions
April 8, 2014 Leave a comment
Facebook Inc’s purchase of Oculus raises questions
Jonathan Ratner | March 26, 2014 5:34 AM ET
Facebook Inc.’s US$2-billion acquisition of Oculus VR may look modest when compared to its recent US$19-billion purchase of WhatsApp, but there appears to be a clearer path for monetizing this new asset through game-related software and hardware.
Two-year-old Oculus has developed software and hardware (the Oculus Rift headset) for virtual reality environments such as video game.
Brian Wieser, an analyst with Pivotal Research Group, noted that Facebook’s justification for the acquisition is largely based on the view that virtual reality is a next generation computing platform.
“Ensuring that Facebook can evolve as new platforms evolve makes sense to us, no differently than it needed to ensure that it maintained relevance in mobile environments during 2012,” Mr. Wieser said in a report.
Facebook appears to want to secure the talent working at Oculus before virtual reality technology becomes more important, perhaps in five or more years from now. That makes sense, but what Mr. Wieser is concerned about is the fact that US$2-billion is a considerable chunk of change for a problem that has yet to emerge.
He noted that by the time Facebook pushed to improve its mobile platform offerings, the talent pool was plentiful and the solution came from managerial and operation means, rather than with major capital investments.
Nonetheless, Mr. Wieser pointed out that Facebook has much wider outlook for the potential in virtual reality computing than just games, and there is also no shortage of long-term potential in areas like education, health care and workplace activity.
“All of these use cases can be construed to have social attributes, although they fall a fair degree away from social media and even further away from ad sales, at least so far as we can envision the medium today,” the analyst said.
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