Analysts have weighed in on the Oculus Rift $2 billion buyout by Facebook, which one industry watcher feels will appear as a bargain five years on.
Speaking with GI International, Asif A. Khan, CFO of Virtue LLC. likened the deal to Google’s acquisition of YouTube in 2006.
“I think this Oculus VR/Facebook deal will appear cheap five years from now, he said. “This deal is very important for a number of reasons. Oculus VR now has the cash backing them to ensure their product will make its way to the market instead of worrying about more future venture capital rounds.
“Facebook has now entered the technology hardware arena and has done so by buying one of the most innovative companies in the world. While many people don’t understand how there could be any synergies between the two companies, I would just suggest the idea of an Oculus VR social network experience. Zuckerberg is no dummy and he saw that VR was a potential threat to Facebook’s dominant position as a communications platform. Facebook’s growth trajectory has changed entirely with this acquisition.”
Khan has previously offered that Nintendo should acquire Oculus VR, but Apple, Google, Microsoft, and Sony should have as well.
EEDAR’s Patrick Walker agreed, stating since the range of potential virtual experiences “is huge,” Facebook wanted to be prepared for such a future in order to integrate their social graph “into this technology platform early.”
“From a gamer’s perspective, this is exciting because another major company is putting their support behind VR technology,” he offered. “VR technology has been an emerging technology in games for a while, and on the cusp of GDC and a wave of new product announcements, including Sony’s new VR headset, appears ready to enter the mainstream. Facebook’s support of the technology will make this happen even sooner.”
IDC research manager Lewis Ward, however, said the acquisition didn’t “make a lot of sense” to him.
“When I think VR, I certainly don’t think Facebook,” he said. “I can see wanting to get in on the ground floor of a new tech that may eventually have mass appeal, but I think critical mass for VR is at least 5 years off, even in developed countries like the US.
I have to assume that Zuckerberg and company have a couple things on their long-term roadmap nobody outside the company has heard of and that they consider a great fit for VR headsets. It’s just not near being a mass market technology at this point so the acquisition is a bit of a head scratcher.”
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