Facebook (NASDAQ:FB) spent $3 billion to acquire virtual-reality leader Oculus back in 2014, and it isn't about to risk letting that asset flounder. For further evidence of that, consider its latest spending spree, which may have a total price tag above $1 billion.
In September, Facebook bought CTRL-labs for its neural networking capabilities. Then, late in November, it revealed that it's bringing Beat Games -- arguably the most successful VR game developer -- into the fold to beef up its content.
It isn't yet clear how these acquisitions will mesh together, but the company is certainly amassing an arsenal of talent to turn its virtual- and augmented-reality visions into reality.
Who is Beat Games?
If you've tried VR, you've probably tried Beat Saber, easily the most popular game available for current-generation VR headsets. Beat Games is the developer behind the music-and-rhythm-focused title, and has been working to develop it further, with an expanded catalog of songs as well as a soon-to-debut 360-degree gameplay mode.
There are a couple of advantages this purchase brings to Facebook and Oculus. One is that Beat Saber has become a key draw for VR headsets -- it's even being highlighted in Oculus's holiday advertising blitz. So it'll be a feature on the Oculus platform, and someday may even be exclusive to Oculus (although not yet).
Maybe more important are the insights that Beat Games will bring to Oculus's in-house game development. The Beat Games team figured out a strategy that worked better than that of any VR game developer before it. If they can help their new parent company replicate some of that success, it'll be a big win for Oculus. We see this in game studio acquisitions all the time -- companies aren't buying the existing assets, they're buying the team that they hope will craft additional popular titles.
How does everything fit together?
Facebook appears to be in the early phases of trying to bring the hardware and software sides together, putting its VR headsets, rumored AR headsets, CTRL-labs hardware and software combo, and now Beat Games under one roof. I think its next step will be to develop more games that will be exclusively for Oculus to try and make that platform more attractive than those of HTC/Steam, Microsoft, or Sony.
What may ultimately be more valuable is integrating all of these technologies into future products. The CTRL-labs platform features a neural interface, which basically means that it allows computers to respond directly to signals from your brain. Could we someday use neural interfaces to control VR or AR platforms?
Getting ahead of the competition
The timing of Facebook's shopping spree is no coincidence. HTC and Steam have both introduced wired headsets that are better than the Oculus Rift, and are both clearly trying to improve their own VR platforms. Apple is also waiting in the wings with an AR headset rumored to be in the pipeline for the early 2020s.
Facebook can't afford to wait around and let its technology industry competitors catch up, so it's acquiring its way to an industry lead. It'll take years to learn if that's the best strategy, but it does put Facebook and Oculus in the driver's seat in VR and AR ... for now.