Facebook has announced that it has reached a definitive agreement to acquire Oculus VR, Inc., an immersive virtual reality technology company, for a total of approximately $2 billion.[blockquote right=”pull-right” cite=”Mark Zuckerberg, Facebook founder and CEO”]Mark Zuckerberg, Facebook founder and CEO says “Mobile is the platform of today, and now we’re also getting ready for the platforms of tomorrow. Oculus has the chance to create the most social platform ever, and change the way we work, play and communicate.” [/blockquote]

Under the plan, the deal includes $400 million in cash and 23.1 million shares of Facebook common stock (valued at $1.6 billion based on the average closing price of the 20 trading days preceding March 21, 2014 of $69.35 per share).  The agreement also provides for an additional $300 million earn-out in cash and stock based on the achievement of certain milestones.

According to Facebook, the application of virtual reality technology beyond gaming are in their nascent stages, several industries are already experimenting with the technology, and Facebook plans to extend Oculus’ existing advantage in gaming to new verticals, including communications, media and entertainment, education and other areas. Given these broad potential applications, virtual reality technology is a strong candidate to emerge as the next social and communications platform.

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

Brendan Iribe, co-founder and CEO of Oculus VR says “We are excited to work with Mark and the Facebook team to deliver the very best virtual reality platform in the world. We believe virtual reality will be heavily defined by social experiences that connect people in magical, new ways. It is a transformative and disruptive technology, that enables the world to experience the impossible, and it’s only just the beginning.”

The transaction is expected to close in the second quarter of 2014.