Showdown with Google Glass looms as Facebook swallows up Oculus Rift for $2bn

Facebook has reached into its deep pockets to spend $2 billion [£1.2 billion] acquiring Oculus VR’s virtual reality technology that will put it head-to-head with Sony in the virtual reality gaming sector.

Related: A closer look at Sony’s virtual reality intentions with the PlayStation 4

A press release from the social network announced that the deal is made up of $400 million [£241 million] in cash and 23.1 million Facebook common stock shares that are right now worth $1.6 billion [£970 million].

“Mobile is the platform of today, and now we’re also getting ready for the platforms of tomorrow,” said Facebook founder and CEO, Mark Zuckerberg. “Oculus has the chance to create the most social platform ever, and change the way we work, play and communicate.”

Oculus began as a startup just 16 months ago and it has grown incredibly quickly since with a key breakthrough coming in December 2013 when it announced a further $75 million [£46 million] in funding that looked to have confirmed the VR headset would reach the shops.

The Oculus Rift 1080p “Crystal Cove” prototype that was shown off at CES 2014 consisted of a headset with a stereoscopic 3D display as well as head-tracking to allow users to look around inside virtual worlds. All eyes will now be on E3 2014 to see if Facebook’s newest acquisition shows off a consumer headset.

Sony is one firm that is expected to release its own VR headset for consumers that will work with the PS4, in the coming months, and it would be a surprise if Microsoft didn’t go down the same road at some point in the near future.

Related: Rumour: Mass market Oculus Rift headset will debut at E3 2014

The agreement also includes an additional $300 million [£181 million] earn out in cash and stock based on certain milestones and the Oculus team will remain at its headquarters in Irvine, California. The release also added that the transaction is expected to reach its completion in Q2 2014.