Facebook today announced that it has reached a definitive agreement to acquire Oculus VR, Inc., the leader in immersive virtual reality technology, for a total of approximately $2 billion. This 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.

The announcement seems to have come out of left field today that Facebook is buying Oculus for $2 billion + 300 million in milestone bonuses. This is incredible and somewhat troubling news for Oculus for sure. Is Oculus still the company we’ve come to love now that it’s owned by a company we’ve come to hate? Time will tell.

“Virtual reality has been a long-standing dream in tech and sci-fi. To me it always felt kind of inevitable but it was one of those things, you never knew quite when it would become a reality,” Dixon tells The Verge. He was impressed with the first developer kit he saw last year, but not enough to invest. Now, however, he says that Oculus has achieved what he was looking for. “The dimensions where you need to improve this kind of VR are latency, resolution and head tracking, and they have really nailed those things.”

All of Oculus’ previous partners, including Matrix and Spark, are also increasing their investment. It’s a very sizable Series B round, a lot of money for a company that hasn’t released a consumer product yet.

However, Oculus CEO Brendan Iribe tells The Verge that his company needs the money to build that consumer product, plain and simple. “The reality is going into the consumer market with a full platform as expansive as this at high volume… really takes a significant investment,” says Iribe. “You look at the cost of goods at the hardware side, setting up the infrastructure… it’s pretty easy to do the math.”

“We always knew we needed a B round to get to the consumer market at volume. We didn’t know the scale we needed for V1 until recently,” Iribe says.

Say what you will about id’s games since Quake 3 Arena, but in the 90’s id ruled the roost in the FPS genre. Just a few days ago we celebrated the 15th anniversary of Half-Life’s release date. If it wasn’t for the technical success of Carmack’s Quake engine and the netcode he used to revolutionize early internet gaming we’d likely have played a much different version of Half-Life and it’s doubtful that the video game industry as a whole would be the way it is today.

We owe it all to John Carmack. Hopefully in 15 years we’ll be discussing how he revolutionized video games again with the Oculus Rift.

Thanks for all the fun John.