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Facebook has cut the price of the Oculus Rift for the second time this year. It debuted at $800, was cut to $600 in March, and is now $400. Is there real trouble in the virtual reality market, or is it just a normal price correction now that early adopters have been served?
It means that the Rift now costs less than the package offered by its cheapest rival, Sony, whose PlayStation VR currently totals $460 including headset and controllers.
Even so, it's not clear that it will be enough to lure people into buying a Rift. A year ago, our own Rachel Metz predicted that the Rift would struggle against Sony's offering because the former requires a powerful (and expensive) gaming computer to run, while the latter needs just a $350 PlayStation 4 game console.
Jason Rubin, vice president for content at Oculus, tells Reuters that the reduction isn't a sign of weak product sales, but rather a decision to give the headset more mass market appeal now that more games are available. Don't believe it: this is the latest in a string of bad news for the firm, which has also shut down its nascent film studio, shuttered in-store demo stations of its hardware, and stumped up $250 million as part of a painful intellectual property lawsuit in the last six months.
Here's a February story about the Oculus demo stations at Best Buy stores being shut down.
Previously: Facebook/Oculus Ordered to pay $500 Million to ZeniMax
Google Partnering With HTC and Lenovo for Standalone VR Headsets
(Score: 1, Insightful) by Anonymous Coward on Tuesday July 11 2017, @03:28PM (3 children)
Ever more companies today are succeeding in spite of themselves. They succeed primarily thanks to inertia and market positioning. Video game consoles are great example here. They also have strong analogs to why VR has begun to putter out. Nintendo had to fight tooth and nail to succeed with the NES following the video crash of 1983. The story [wikipedia.org] of how this played out is fascinating. But now a days consoles are mostly sold by throwing out some hardware and relying almost entirely on brand recognition and inertia to sell it. A fun quote [gamespot.com] from Sony Europe's CEO: "We have built up a certain brand equity over time since the launch of PlayStation in 1995 and PS2 in 2000 that the first five million are going to buy it, whatever it is, even [if] it didn't have games."
Even doing things like charging consumers money to use their own internet while simultaneously spamming them with advertisements is standard practice. Consoles, until the PS4/XBone, tended to have at least a good price:performance ratio due to subsidized hardware. Now a days though even that's no longer true. That console sales continue to decline, precipitously if one is to contrast it against population growth, is considered something outside of their control in the head-in-the-sand school of MBA business. Even the top executives of consoles tend to believe in their own invincibility.
The problem VR faced is that the big companies pushing it again took their own success for granted. It was just a matter of the scale of success. Before VR was even launched consumers were having to deal with nonsense like exclusives, hardware being arbitrarily locked out from stores, incompatible hardware or hardware requiring arbitrary new hardware to offer basic functionality... And then the price. $600 + $200 + $50 for a hardware accessory? The price is just ridiculous. Luckey was selling early models, for profit, at $300. Even though the hardware is greatly improved now, but you simply cannot expect people to drop $850 on an unproven gaming peripheral. Subsidize the hardware, profit on software. Basically, fire the MBAs. Get people who actually know how to run businesses in ways other than 'screw the customers as much as possible. when things go wrong, blame things outside our control.'
(Score: 2) by bob_super on Tuesday July 11 2017, @03:34PM
> Basically, fire the MBAs (...) 'screw the customers as much as possible. when things go wrong, blame things outside our control.'
Not just MBAs. Haven't you paid attention to politics much over the last few years ?
(Score: 2) by kaszz on Tuesday July 11 2017, @04:45PM
I have a better idea. Ban people without a technical mindset and passion from ever having any control of the company in question.
(Score: 2) by Immerman on Saturday July 15 2017, @01:12PM
>Subsidize the hardware, profit on software.
That's extremely risky as well though. VR is very much a complete re-imagining of how we interface with the computer, and a lot of the most interesting and workable prototypes are still coming from the enthusiast/tinker crowd. Its tricky to attract them, and let them share their stuff amongst each other, while still taking a cut of the profit from anything that actually makes money. "App stores" are not well suited to tinkerers.
It's basically a problem of lock-in. Sony can afford to subsidize the PS4 hardware because it only plays PS4 games, and anyone who sells PS4 games has to cut them in on the action. They tried to loosen that up back with the PS2 Linux mode, and then ended up retroactively removing it because too many people were buying the PS2 without buying any games and it was costing them too much money.