Oculus Rift VR's $599 price tag recently became official, leaving many aback as the high figure was nowhere near the "ballpark" value that was initially purported.
In Oct. last year, Palmer Luckey, Oculus' founder and CEO, estimated that a consumer unit Oculus Rift VR would cost about the same as a Developer Kit 2 version. The DK2 had a price point of about $350.
Palmer Luckey took the "stage" at a Reddit Ask Me Anything (AMA) and apologized for the poor communication, explaining how the mismatch between reality and expectation came to be.
According to Luckey, Oculus made a few mistakes while the hype for its VR set was building up. One notable misstep was that the company assumed its communication regarding the headset's price was "clear enough about setting expectations."
In May last year, Oculus executives affirmed that the Oculus Rift and a PC capable of delivering reliable VR experiences would require buyers to shell out $1,500 for the whole package.
Luckey explains that some headlines at the time read "Rift will cost $1,500," stirring confusion among consumers. In fact, most of that sum goes into the PC that supports a full-featured VR headset from Oculus.
"The biggest portion of their cost is the PC, not the Rift itself," the Oculus CEO says.
Luckey underlines that his "in the ballpark of $350" estimation was supposed to point out that the price for the Oculus Rift VR headset by itself is nowhere near $1,500.
The public assumed that the final product will cost a similar amount to the DK2 that was $350/ piece. The Oculus CEO acknowledges that the way he and his company handled the rumors was wrong.
"I handled the messaging poorly," Luckey reckons in the AMA thread.
The leader of Oculus goes on to add that his company uses custom VR technology that aims to offer buyers the best virtual reality experience possible. This means that R&D efforts and costs amounted beyond the initial calculations.
According to Luckey, Oculus makes zero profit on Rift hardware, even at a nearly $600 price tag. He also details what the most expensive parts of the headset are.
The Oculus Rift VR contains two built-for-VR OLED displays which deliver superior refresh rate and pixel density, a tracking system which is incredibly accurate, a lightweight, exact and resistant adjustment system and last-gen optics with a complexity that puts most premium DSLR lenses to shame.
"For the $599 you spend, you get a lot more than spending $599 on pretty much any other consumer electronics devices," Luckey told Reddit users. He offers the example of smartphones and mid-range TVs that have a similar price tag and yet require significant lower manufacturing expenses.
Luckey bursts the bubble for those who hope to see a simplified (and cheaper) variant of Oculus Rift anytime soon. He explains that, in order to maintain the appeal for developers, a standardized system is mandatory. This means that, should Oculus aim to reduce its manufacturing costs, the quality of the device would be the first to take a hit and the company refuses to sacrifice quality for price.
The CEO of Oculus answered questions regarding how the headset will be used. He states that gaming will be neither the only, nor the preponderant usage for Oculus Rift.
"Somewhat surprisingly, the majority of time spent right in Gear VR is video and experiences, not games," Luckey affirms.
He compares the evolution of VR with the way in which computers and mobile platforms developed, evolving beyond being gaming tools. The leader of Oculus admits that, for now, gaming represents the main driver of PC VR, but he is positive that more content will be added in the near future.
There is some ill news for gaming enthusiasts, though.
"You won't necessarily be able to play all games at MAX settings on the recommended spec," Luckey notes.
However, be assured that high quality level (read: 90 FPS) will be achievable on the recommended systems.
To ensure that the VR headset delivers the best user experience, Oculus will not support low-end hardware. The reason for this is that a lot of low-end cards are physically unable to output the frame rate and resolution that the Oculus Rift VR needs in order to function.
Luckey understands that his company must learn how to communicate the right price for its devices, especially in the newborn virtual reality market.
"I usually try to underpromise and overdeliver, and I need to hold myself to that better in the future," he promises.