Facebook has announced that it has reached a definitive agreement to acquire Oculus VR for approximately $2 billion.

The acquisition includes $400 million in cash and 23.1 million shares of Facebook common stock (valued at $1.6 billion. The agreement also provides for an additional $300 million earn-out in cash and stock based on the achievement of certain milestones.

Oculus have long been the flag bearer for virtual reality in the video game space. However in recent months a number of competitors have come to market including Sony who announced their own virtual reality system, Project Morpheus, at last week’s Game Developers Conference.

“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.

“Virtual reality was once the dream of science fiction. But the internet was also once a dream, and so were computers and smartphones. The future is coming and we have a chance to build it together. I can’t wait to start working with the whole team at Oculus to bring this future to the world, and to unlock new worlds for all of us.”

“We are excited to work with Mark and the Facebook team to deliver the very best virtual reality platform in the world,” said Brendan Iribe, co-founder and CEO of Oculus VR. “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.”

Oculus will maintain its headquarters in Irvine, CA, and will continue development of the Oculus Rift virtual reality platform.

The acquisition comes hot on the heels of Facebook purchasing mobile messaging service WhatsApp for a cool $16bn last month. The transaction is expected to close in the second quarter of 2014.

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