This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Facebook and Oculus Aren't Just About Games

NEW YORK (TheStreet) -- Facebook (FB - Get Report) announced its purchase of Oculus VR, maker of the Oculus Rift headset, for $2 billion in cash and stock. While the $2 billion price is based on the gaming market, the potential for virtual reality is seemingly limitless. Whether that gets here though is anyone's guess.

When discussing the transaction, which Facebook expects will close next quarter, Facebook CEO Mark Zuckerberg talked about a few of the other opportunities outside of video games. "After games, we're going to make Oculus a platform for many other experiences," Zuckerberg said in a Facebook post. "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."

WATCH: Facebook's Spending Spree on Oculus VR, WhatsApp Finds Reality Bites

Virtual reality has long been thought of as something from science fiction, sensationalized in movies such as The Matrix trilogy, Virtuosity, Virtuality (a television movie), and several other mediums. However, it appears that with Facebook's purchase of Oculus VR, virtual reality is coming to fruition, noted Jon Brouchoud, founder of Arch Virtual, which creates 3D environments for education, medical, architecture, city planning and the enterprise.

Must Read: Will We Find Digital Tipping at McDonald's? Not Likely

"I think it's exciting," Brouchoud said in a telephone interview, referring to the acquisition. "Virtual reality needs to be more widespread. Anyone who tries it [Oculus Rift] on, immediately gets it. The awareness of the deal brings more people to it, and it can only be a good thing for the future of virtual reality."

Brouchoud noted some of the projects Arch Virtual has worked on which could speak to Zuckerberg's vision of having Oculus be more than just for games. Arch Virtual has done a virtual driving experience for automaker Suzuki, in which consumers grab on to a steering wheel and imagineg they're driving through the Himalayan mountains. "It really leads them feeling as if they've driven that vehicle, and there's no other medium that can do that," he said.

That said, virtual reality is still in the very early stages, and it's not quite clear which applications will work the best for virtual reality or whether this is a moon shoot. JMP Securities analyst Ronald Josey noted the acquisition, which only came together in the past few days, "will take multiple years for this strategy to come into focus," and that significant monetization of the company is still a long way away. According to the acquisition announcement, Oculus has taken orders for just 75,000 Oculus Rift headsets, ranging anywhere from $300 for the Rift DK1 to $350 for the Rift DK2.

Zuckerberg said he thought virtual reality and the Oculus Rift could be the next computing platform, but not everyone sees it that way. Pacific Crest Securities analyst Evan Wilson believes that the platforms of today (PC, smartphone, tablet, laptop) will remain the platforms, with virtual reality integrated. "It is more likely that the computing platform (PC, smartphone, tablet, laptop) and its software will continue to be the platform, which will allow multiple VR display manufacturers to interoperate and compete," Wilson wrote in a note. Wilson added that virtual reality headsets could replace other displays, including TV, PC monitors and projectors, for high-end uses, including movies and games.

On the conference call, Zuckerberg noted that virtual reality coming to the forefront is being driven by the smartphone, as components are now mass-produced at prices small enough and powerful enough "that you can repurpose to do the really intense graphics work that's necessary to render a full world quick enough to not make someone motion sick." That said, Zuckerberg doesn't expect virtual reality to take off anytime soon, noting "this is a five-plus year thing."

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
FB $99.75 -4.15%
GOOG $682.74 -0.12%
AAPL $95.01 1.05%
TSLA $147.99 -8.99%
YHOO $27.05 -3.29%


Chart of I:DJI
DOW 16,027.05 -177.92 -1.10%
S&P 500 1,853.44 -26.61 -1.42%
NASDAQ 4,283.7530 -79.3910 -1.82%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs