Now, this is precisely why Oculus opted to sell itself to Facebook (NASDAQ: FB) last year for $2 billion. Oculus has just announced that it has acquired Israeli-based Pebbles Interfaces. The smaller company has spent the past few years developing hand-tracking technology that utilizes custom optics and sensors. Pebbles' technology allows users to directly see their own hands and fingers within the field of vision in the virtual reality display.
The deal is but the latest in a string of acquisitions that Oculus has made under the Facebook umbrella. None of this would have been possible without Mark Zuckerberg's buy-in.
Another one bites the Zuck
Financial terms were not disclosed, but The Wall Street Journal's ever-knowing people "familiar with the matter" peg the price tag at $60 million. This comes after Oculus acquired Carbon Design Group (the design company that helped make Microsoft's Xbox 360 controller and Kinect), Nimble VR (another hand-tracking VR specialist), and 13th Lab (real-time 3D reconstruction frameworks) last year, and Surreal Vision (also real-time 3D scene reconstruction) just two months ago.
Facebook's deep pockets sure are coming in handy right about now, especially since Oculus had just $20 million in cash when it sold itself to Facebook and the Rift was still years away from launching (it launches in early 2016). Even though most of the price tags of these deals aren't known, you can bet that the total bill is far more than Oculus could have afforded as an independent start-up, and Oculus probably isn't even done yet with its acquisition spree. It's also a fairly small dent in the $12.4 billion in cash that Facebook had at the end of last quarter.
The next big thing?
Zuckerberg wants virtual reality to be the next big social-computing platform. The Facebook CEO has given numerous insights into his vision in recent months through a series of town hall Q&As hosted at Facebook.
At the first event in April, Zuckerberg said that "the goal is to help build a medium that will give you the ability to do all of these things you might not otherwise be able to do." He even made a comparison, saying that today we share photos and videos of our experiences, but in the future you might be able to capture the entire scene in 3D and share a re-creation of it.
He echoed these same sentiments a month later in another Facebook Q&A, further detailing how he believed the form factor would continue shrinking until they're comparable to regular glasses as opposed to the bulky headset we think of today. In last month's town hall, he described what Rift will be like: "When you put on the Rift, you'll be able to experience immersive virtual environments that create the feeling of 'presence' -- like you're actually there."
The price is right
You'd be forgiven if you think all of these visions sound like they're out of a cheesy science-fiction novel, but there is the potential that on a long enough timeline Oculus can play out in the way that Zuckerberg sees it. Like most new technologies, they start at high price points (Facebook has not detailed the Rift's pricing or business model) in order to recoup high development costs. Only passionate early adopters jump on here. But eventually, prices come down and pave the way for potential mainstream adoption.
Facebook has a long path to get there, and it could easily take decades, but $2 billion for a shot at what could become the next major computing platform isn't that bad.
Evan Niu, CFA owns shares of Facebook. The Motley Fool recommends Facebook. The Motley Fool owns shares of Facebook. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.