Even At $600, Oculus Isn't Making Money On The Rift VR Headset
Earlier today, Oculus finally revealed the price of its Rift virtual reality headset. At $600, it's a pricey piece of hardware, there's no doubt about that — but considering everything that the headset can do, it's probably not cheap to produce, either.
The Oculus Rift may look like an oversized pair of goggles, but the actual internal workings are much more complicated: not only does the headset contain a full HD screen, it holds a miniaturized CPU, a gyroscope, an accelerometer, a magnetometer and all of the other required hardware. Simply put, it's a complicated piece of tech — and again, such a complicated piece of hardware isn't going to be easy to manufacture.
In fact, according to Oculus CEO Palmer Luckey, the internal components and manufacturing costs of the Rift are the reason behind its recently-revealed $600 price tag. In other words, the Rift headset is so expensive to produce that, even at $600, Oculus isn't making any money off of it.
To reiterate, we are not making money on Rift hardware. High end VR is expensive, but Rift is obscenely cheap for what it is.
— Palmer Luckey (@PalmerLuckey) January 6, 2016
In all honesty, it should come as no surprise that the Oculus Rift is expensive to make. It's new technology, and Oculus has put together a surprisingly powerful piece of hardware.
That being said, it really doesn't make sense for a company to debut its its first real piece of high-end tech at a loss. Yes, tech companies will produce and sell hardware for less than the cost of manufacturing, but those kinds of deals are typically reserved for already-established markets: for example, the first run of a video game console is usually sold at a loss, which the company then makes up over the hardware's lifetime.
The thing is, the virtual reality industry hasn't really been established yet: sure, there are plenty of people who are excited about VR, and there are a ton of different possible applications ... but an actual market has yet to form. If Oculus is producing the Rift at-cost or at a loss, that's a big risk — especially this early in the game.
The Oculus is facing an uphill battle with such a pricey initial price tag and an untested market — if the company really is selling the headset at a loss, fans can only hope that the Rift gets the support it needs to succeed.
If you're interested in preordering one of the headsets, you can do so over at the Oculus Rift store.