That $600 Oculus Rift

When Oculus Rift announced their pre-order price of $600 yesterday, I contemplated writing about that instead of posting my reviews on Tales from the Borderlands or Rise of the Tomb Raider. But instead I decided to sit and think on it for a day. My gut reaction was this tweet:

Based on my one five-minute demo of VR, I'm not ready to immediately commit $600 to it (in addition to the money I'll need for a new computer because I imagine my desktop from when I was still in college six years ago isn't going to cut it). Both Oculus and PlayStation need to do a much better job of selling me on this experience to get me to fork over that much money.

Now that's not at all to say $600 is an unreasonable price. The research and development has no doubt been extraordinarily high to the point that it would not surprise me all if even those $600 units are being sold at a loss, especially if you factor in that price gets you the headset, sensor, rift remote, Xbox controller, cables, EVE: Valkyrie, and Lucky's Tale. Typically, gaming has followed the same model as razor blades: the razor/console is sold at a loss and the company makes up the money with every blade refill/game sold.

The target audience for VR at this time are the early adopters; the same people who will line up or pre-order whatever new Apple device comes out for hundreds of dollars every year or so. The hardcore-est of the hardcore, if you will. This is absolutely a luxury item at this point in time meant for more affluent consumers, just like the early CD players ($1000), cell phones ($4000), or personal computers ($55,000). If you're looking for VR experiences for the more mass-market user, Google Cardboard exists but you're probably going to get what you pay for in terms of contrasting experiences.

I imagine PlayStation VR will end up costing less (maybe $399.99, in addition to the $350 cost of the console) and similarly won't be as high a quality as that of a high-end PC plus Oculus. Much like Nintendo made a name for itself by producing cheaper and slightly inferior products technologically when compared to the top tier, Sony and PlayStation VR can occupy that space and appeal to a larger audience, while Oculus caters to the premiere crowd. That's effectively already what the "PC Master Race" vs console debate is about. Sony just announced PlayStation 4 has sold 35.9 million units. If just three percent of those owners buy the PlayStation VR as well, that's 1,077,000 kits. For reference, the infamous Virtual Boy sold 770,000 units at its $180 price point and was pulled from production in less than a year due to low sales.

virtual boy.jpg

Ultimately, based on a lot of the activity on twitter and write-ups I saw yesterday. VR is still a ways out from being palatable to the masses (at least at a $600) price point but there's definitely an audience out there pre-ordering it. In order to appeal to the larger crowd, Oculus will either require marketing that figures out a better way to tell people why they need to spend that kind of money on the technology (I would suggest putting VR demo stores into pretty much any building that ends up being a Spirit Halloween during the month of October) or consumers will end up waiting until the cost of production becomes more efficient and the price of the product drops as a result.