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What You Need to Know: Facebook Buys Oculus VR

A look at why a social network would spend $2 billion on a company that makes virtual reality hardware.
Oculus Rift CES
Attendees wear Oculus Rift HD virtual reality head-mounted displays as they play EVE: Valkyrie, a multiplayer virtual reality dogfighting shooter game, at the Intel booth at the 2014 International CES, January 9, 2014 in Las Vegas, Nevada.ROBYN BECK / AFP - Getty Images

Facebook announced on Tuesday that it’s buying Oculus VR, maker of virtual reality hardware, for around $2 billion in cash and stock. That is twice the amount it paid for Instagram in 2012.

What is so great about Oculus VR?

The company makes the Oculus Rift, the most advanced virtual reality headset on the market. Before it was unveiled in 2012, similar technology cost tens of thousands of dollars. The first Oculus Rift prototype sold for $300. Its popularity inspired Sony and Microsoft to develop their own virtual reality headsets.

What is virtual reality?

The Oculus Rift headset uses displays set over the eyes and motion-tracking technology to immerse users in a 3-D, computer-generated environment. In other words: You feel like you are actually fighting your way through the alien-plagued hallways of "Doom 3" or wandering around the "Seinfeld" apartment.

So, Facebook is in the video game market now?

Kind of. In a Facebook post, Mark Zuckerberg wrote that “immersive gaming will be the first” experience that Oculus Rift will bring to the public. But he also pointed to its potential as a “a new communication platform” that could help connect teachers and students, put viewers right in the middle of TV and live sports broadcasts, and help doctors interact with patients.

The purchase might seem like an odd move for a software company, but people said the same thing when Microsoft announced the Xbox in 2001 and Google Glass was unveiled in 2012. Facebook now has a competitor to both.

Can I buy one of these things?

Technically, yes, but the current Oculus Rift, as well as the next-generation version available for pre-order for $350, are still being sold as software development kits. That means you need a little technical know-how to work one. It's not clear when the commercial version of the Oculus Rift will launch. The company has only said that it's "working tirelessly to make it available as soon as possible."

Is everyone happy about this Facebook Deal?

Not really. Oculus Rift was originally funded to the tune of $2.4 million on Kickstarter by ordinary people. Now its creators are walking around with serious Zuckerberg money. Its donors, however, don’t share in the profits (if they did, the crowdfunding site would be subject to strict SEC regulations) and now they have flooded the original Kickstarter page with angry comments.

"Oculus Rules! Facebook doesn't. This is sad," wrote backer James Fitzwater. While donors might not like it, the biggest deal in Kickstarter history could create incentive for more people to seek funding on the site, with Facebook joining big companies like Focus Features and Logitech snapping up community-funded projects.

Still, even people besides donors are upset. Markus Persson, who was working on an Oculus Rift version of the incredibly popular game "Minecraft," expressed his disappointment on Twitter.

Does Facebook want to take over the world?

Well, it just spent $19 billion on mobile messaging app WhatsApp and it already owns Instagram. It has to compete with Apple and Google somehow, right?