Facebook invests in a virtual reality future with $2 billion Oculus Rift acquisition

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• GWEN IFILL:

  Finally tonight: Like other fabled tech Cinderella stories, this one started as a young man with an idea working out of a garage.

  Yesterday, Facebook announced it would pay $2 billion for Oculus VR, a company that makes a virtual reality headset for video games.

  NewsHour economics correspondent Paul Solman recently featured the company in a pair of reports about virtual reality. We start with this excerpt.

• MAN:

  This is insane.

• PAUL SOLMAN:

  Though not yet ready for retail — it's expected to sell for about $300 — the Oculus Rift is already being hailed as the Holy Grail of gaming, a lightweight, affordable headset to deliver totally immersive virtual reality, or V.R.

• NATE MITCHELL, Oculus VR:

  A lot of us got into the games industry to build virtual worlds and explore — build and explore neat places. And being able to step inside those places for the first time is incredibly exciting.

• PAUL SOLMAN:

  Nate Mitchell, Oculus' 25-year old vice president, gave me a sneak peak at the headset, driving a mech, a sort of weaponized robot, in a virtual reality version of the popular post-apocalypse game Hawken.

  Up, up, up, up. Ooh, yes. This is pretty cool.

  The split-screen images, what I'm seeing in each eye, don't come close to capturing the experience. But begoggled, I was virtually within Hawken's Mad Max world.

• GWEN IFILL:

  Hari Sreenivasan in our New York studios picks up the story from there.

• HARI SREENIVASAN:

  Vindu Goel covers the tech industry, both big and small, in Silicon Valley for The New York Times. He joins us now from San Francisco.

  So, first of all, why does Facebook want to make this investment?

• VINDU GOEL, The New York Times:

  Facebook is trying to follow the evolution of the social platform.

  Initially, we all swapped information on the Internet. Now we use our mobile phones. And they're trying to think about, what is the next big platform that we're going to use to share with each other? And it's a futuristic vision, but they think that one possibility is, we will interact with each other in a virtual world, so that you and I could speak and seem like we were in the same room doing this interview right now.

  You could go climb the Great Wall of China and show your family back home what the experience is like. They would be wearing the headsets and they would be there right with you.

• HARI SREENIVASAN:

  Virtual reality has been the stuff of sci-fi movies and has been the next big thing for the last 15 to 20 years. What's so different now?

• VINDU GOEL:

  The technology has gotten a lot better and a lot cheaper.

  The components that you use in your cell phone that let you take great video images, those are the kinds of things they are now starting to incorporate in the headsets. The technology is still a long way from reality, though. This product, the Oculus Rift, that is the main product that Facebook is buying, is not even out yet. And it may not be out for another year or two for customers to actually be able to buy.

  So there's a lot to do yet to perfect the technology. And there are some people who still say we're still a long way away.

• HARI SREENIVASAN:

  So, what about the unintended social consequences of technology, given that Google has had such a tough time convincing communities about the behavior associated with their little Google Glass devices, a wearable technology?

• VINDU GOEL:

  Yes, I think that's going to be a big issue. If you have ever seen one of those Oculus Rifts, it's like wearing this like gigantic plate in front of your face, and you really can't interact with the world that you're in.

  So that's one of the things that I think people are going to have to figure out as they're using this. If you're in your living room and you put one of those on to enter a virtual world, you're not going to be able to interact with anybody else around you, and you certainly won't want to do it in the street or in public. It's going to be pretty strange to see you kind of completely tuning out the world.

• HARI SREENIVASAN:

  Well, are there applications written for or to take advantage of virtual reality? We have seen examples of people wearing these, for example, to get over their fear of heights or post-traumatic stress disorder, but something kind of for the mass audience? Why would we want something like this?

• VINDU GOEL:

  There are some specialized applications like you're talking about. The military uses it.

  I think the hope is that, eventually, in addition to social applications, sharing things with your friends, that you will be able to do distance learning, you will be able to participate in a classroom virtually from far away and interact with the teacher and other students as if you were all in the same room.

  Medicine is a big area, to teach medical students what it's like to do surgery or other medical procedures without actually having to cut open a human being or be there in person to witness it. So that's the idea. That dream of virtual reality is that you will be able to do all of these things on a computer and feel like you're really doing them.

• HARI SREENIVASAN:

  Finally, just a business question. Is there a Facebook bubble or a Facebook effect that's happening? They paid $19 billion for WhatsApp recently. They paid obviously a billion dollars for Instagram a while ago, and now this.

• VINDU GOEL:

  Many people in Silicon Valley are wondering the same thing. You're seeing the price tags for these startups to go higher and higher, $2 billion for a company that doesn't have a product yet and a futuristic technology.

  Facebook has a lot of money to spend now, though, so they see it as a cheap bet that this might be the technology of the future.

• HARI SREENIVASAN:

  All right, Vindu Goel from The New York Times, joining us from San Francisco, thanks so much.

• VINDU GOEL:

  Thank you, Hari.