Oculus Rift Pre-orders Begin At $600

[dlevere]

Posted by Soulskill

New submitter Jerome writes:

Pre-orders have just started for the Oculus Rift virtual reality headset. The $600 price tag is higher than most people were expecting — and that doesn't even account for the required upgrade needed to fully enjoy VR apps.

"In September of 2014, Oculus founder Palmer Luckey said to expect a $200 to $400 range for the Rift." The device will first begin shipping on March 28th, though the store is already showing an estimate of April for Rifts beyond the initial stock.

"The Rift package also doesn't include the relatively powerful Windows PC that will be required to use the device. Oculus recommends a rig with an Nvidia GTX 970 (or equivalent), an Intel i5 processor, and at least 8 GB of RAM." In February, they'll start taking pre-orders for a package that does include a full, "Oculus-ready" system for $1,500.

[dlevere]

How Oculus failed to prepare the world for a $599 Rift

Pre-order launch is an object lesson in failed expectations management.

By Kyle Orland

Over under on the consumer Rift at launch: $500

— Kyle Orland (@KyleOrl) January 4, 2016

On Monday, when Oculus first announced that it would finally be taking consumer Oculus Rift pre-orders later in the week, I tweeted an over/under prediction that the Rift itself would come in at $500. Nearly 1,000 Twitter poll voters seemed to converge on that same expectation, with almost equal proportions guessing the price would be higher or lower than $500 (and 19 percent thinking the $500 guess was exactly right). It's not a random, scientific sample or anything, but the wisdom of crowd effect suggests $500 was a decent average expectation for the Rift price as of earlier this week (at least among the generally tech-savvy audience that would see my tweet).

Those baseline expectations were extremely important this morning when Oculus announced a $599 price for the first consumer edition of the Oculus Rift. It's not hard to find people online complaining that the price tag is just too much money to pay for an unproven device like the Rift, especially when you consider the added cost of the decently powerful PC needed to use the device. Comparisons to the PS3's famously derided "Five hundred and ninety-nine US dollars" announcement are already rampant.

It's also not hard to find early adopters admitting that they're willing to pay the perhaps higher-than-expected price—the ever-receding "expected ship date" on the Oculus Shop page suggests sales are surpassing inventories so far, at least. Everyone's budgetary threshold for VR is going to be different, and there's no reason that the early adopter, day-one price for a new category of consumer hardware should be the same as the eventual "mass market" price brought on by scale and technological advancement.

That said, Oculus could have limited the sticker shock of today's announcement any number of times in the past days, months, and years. Instead, the company consistently hinted that the Rift would be much more affordable right out of the gate.

Irrational exuberance


How much would you expect to pay for what's in this box? Don't answer yet...

Probably the biggest pieces of "evidence" leading people to expect a lower price for the Rift were the prices Oculus itself charged for its Rift development kits. The $300 DK1, funded by a wildly successful Kickstarter in 2012, and the $350 second dev kit (DK2) offered up in 2014, taught many consumers that it was possible to deliver decent (if not consumer quality) virtual reality for prices much lower than $599.

These "dev kits" weren't exactly ultra-niche products for a handful of lucky developers, either — Oculus sold over 175,000 of the kits as of last summer. A vast majority of those devices probably went to people who never had any intention of writing their own VR software. That's in contrast to console development kits, which can cost thousands of dollars and have historically been tightly controlled by console makers to only go to established developers with real offices (though that console dev process has opened up a bit in recent years).

Oculus itself fueled the expectation that the consumer version of the Rift could fit in the same general price range as those dev kits. When Oculus was acquired by Facebook in March of 2014, founder Palmer Luckey said the buyout would "let us greatly lower the price of the Rift." A few months later, Luckey publicly suggested a $200 to $400 range for the consumer Rift, and Facebook CEO Mark Zuckerberg said the device would be sold at "the lowest price possible."

More recently, Oculus executives had been low-balling the price floor for the consumer Rift in public statements. In September, Oculus VP of Product Nate Mitchell said the headset would be "at least $300." In October, Luckey upped the floor, saying the consumer Rift would cost more than the DK2's $350 price.

While those statements were technically true, they suggested in most people's minds that $300 and $350 were reasonable numbers to associate with the eventual Rift price and that "more than" might only mean "a little more than" in practice. In any case, Luckey's October statement that the consumer Rift would be "roughly in [the] ballpark" of the $350 DK2 was way off.

Hitting the hard ground with a thud


It costs a lot to look this good.

Company will discuss its own VR control solution at E3 next month.To be fair, Oculus did put out some hints that the Rift would be more expensive if you were paying close attention. Oculus CEO Brendan Iribe said in May that the Rift and a suitable PC would be paired together for $1,500; and Oculus indeed announced today that it would sell "Oculus Ready" PC's bundled with the Rift for exactly that price. Iribe also told Ars in 2014 that it didn't expect the first consumer version of the Rift to be a "console-scale" mass consumer product and that future versions would allow for more Facebook-driven economies of scale.

But Oculus had plenty of opportunities to soften the ground by setting more accurate pricing expectations for the first consumer Rift. Executives could have pointed out that the dev kits were made with cheaper, lower-end components than final product. They could have publicly warned that additions like an Xbox One controller, the handheld Oculus Remote, and a better head-tracking camera/stand would add a little bit to the final consumer price. Heck, they could have revealed the actual price a few days or weeks or months before offering it for sale, as almost every other consumer product already does.

In an interview with Polygon today, Luckey explained how the Facebook acquisition let them pursue things like custom panels, higher refresh rates, and sealed optics that drove up both the quality and the price of the final consumer unit from what they previously thought was possible. That's all well and good, but it's the kind of thing Oculus should have been talking up weeks ago to prepare consumers, rather than mentioning casually hours after the pre-order roll-out.

One could certainly argue that the kinds of slow-play, low ball pricing hints we got from Oculus were an intentional strategy to increase interest in the Rift and virtual reality in general. As long as Oculus hinted at a lower price, consumers could envision a world where virtual reality became a mass-market product right out of the gate. This likely increased excitement and hype for the coming "revolution" in headset displays and got many imagining that a new VR-dominant future was close at hand.

In the end, this strategy was probably counterproductive. Even if the low price expectations helped build excitement for VR, much of that excitement was thrown out the window this morning when potential buyers had to be shocked back into reality by a $599 price tag. Some consumers may be frothed up enough to immediately buy the Rift regardless of the price (our own Lee Hutchinson among them), but many others have likely been chastened into a less receptive attitude by this betrayal of expectations.

Imagine instead a world where Oculus loudly and publicly prepared the potential audience that the Rift would not be a cheap, mass-market product from day one. The early adopting true fans would still be excited to get in on the ground floor of the virtual reality "revolution," no matter the cost. The more casual lookie-loos, on the other hand, would have been accurately prepared to hold off until the hardware was a bit more affordable. The successful public showings of new higher-res prototypes and consumer hardware in the intervening months would have still generated plenty of interest in the Rift, but the disillusionment some feel today would have been diminished.

But we don’t live in that world. We live in this world, where the entry point to PC-based VR is perhaps surprisingly high at $599 plus tax and shipping. The only thing to do now is get both your credit and video cards ready if you want to join the revolution, whatever form it’s going to take.

Listing image by Aurich Lawson

[lee4]

Facebook needs to sell 3.5mill units to break even.

[MathUser]

Glad the PS4 VR headset costs less. I'm sure it won't have any of that VR porn tho, so oculus rift will fill that niche market.