Yesterday VR fans eager to get their hands on the consumer version of the long awaited Oculus Rift headset learnt what co-founder Palmer Luckey meant when he said the price would be in the “ballpark” of last year’s $350 dev kit. The cost of “that ballpark” turned out to be $1 short of $600.
Predictably people were pissed. Commenting on the big reveal, TC reader Tom Kerrigan wrote: “This is an unreasonable and unrealistic price. Twice companies have tried and failed to bring VR to market and failed. The only people that will buy this are the suckers that will buy anything to look cool. For the general gaming market this will fall flat. A VR headset should be no more than 200 ish.”
Luckey was presumably expecting to have to field some backlash on pricing given that Oculus had arranged a Reddit AMA for later in the day the Oculus pre-orders kicked off — where he did indeed have to deal with plenty of snark on price.
And he conceded he had screwed up the messaging, explaining that when he said “that ballpark” he had been thinking about the ‘all in’ cost of the Rift — which requires a gaming PC to power it. Ergo, in his mind, $599 was more in the ballpark of $350 than it was in the ballpark of $1,500.
“I handled the messaging poorly,” admitted Luckey. “My answer was ill-prepared, and mentally, I was contrasting $349 with $1,500, not our internal estimate that hovered close to $599 — that is why I said it was in roughly the same ballpark. Later on, I tried to get across that the Rift would cost more than many expected, in the past two weeks particularly. There are a lot of reasons we did not do a better job of prepping people who already have high end GPUs, legal, financial, competitive, and otherwise, but to be perfectly honest, our biggest failing was assuming we had been clear enough about setting expectations.”
Luckey also stressed that Oculus is selling the Rift at cost — something co-founder Nate Mitchell also told us on the TC stage at CES yesterday — adding that bundled items like the Xbox controller and the two games that come free with the headset do not “significantly impact the cost”. Although he would not be drawn into a detailed cost breakdown, quipping “and spoil the first tear down?!”, before adding that “internal and partner related reasons” prevent him from sharing that info.
“The core technology in the Rift is the main driver — two built-for-VR OLED displays with very high refresh rate and pixel density, a very precise tracking system, mechanical adjustment systems that must be lightweight, durable, and precise, and cutting-edge optics that are more complex to manufacture than many high end DSLR lenses,” said Luckey.
“I will use whatever credibility I have left to assure you that you are getting a pretty crazy deal,” he added.
“It is expensive, but for the $599 you spend, you get a lot more than spending $599 on pretty much any other consumer electronics devices — phones that cost $599 cost a fraction of that to make, same with mid-range TVs that cost $599. There are a lot of mainstream devices in that price-range, so as you have said, our failing was in communication, not just price.”
Asked, in the same AMA, what “ballpark” VR fans should expect the price of the Oculus Touch controller to be — which is now not due to ship til the second half of this year — Luckey responded: “No more ballparks for now. I have learned my lesson.”
Later on in the AMA, he also responded to another query on pricing which pressed him on comments he had made previously — in which he had suggested that he did not see $600 as a mainstream price-point, saying: “We’re going for the mainstream, but time will tell what the market is” — with the Reddit questioner asking whether he had now changed his “personal philosophy”, adding: “Because, it seems to me you set out to make VR for the masses and ended up making VR for the wealthy.”
