Six hundred dollars. That’s a large amount of change to throw at any single item, just based on the law of averages and statistical data about the financial stability of working adults in the U.S. It certainly is for me. I can see throwing that much at something necessary, such as car repairs or home maintenance. But entertainment? If it were something that had multiple uses, such as a television set or a computer, I’d be able to understand. But what about an accessory? Nothing you can use on its own, but something that relies on a connection to something else?
The Oculus Rift’s final price and release data were revealed yesterday, and your first steps into the golden age of head-mounted virtual reality will only cost you $599.99. Enough money, in fact, that rounding it by the hundreds place puts you closer to a thousand dollars than it does zero. Furthermore, you have to use it when connected to a computer, so it’s not even able to achieve its purpose unless it’s paired with something that’s more expensive — far more expensive, when you look at the system requirements for it. Oculus is a company that has some of the brightest minds in digital media, the most legendary content creators and game designers, and some of the most intelligent engineers in the world on its payroll. A payroll that got an influx of capital from Facebook, who became their parent company to the tune of two billion dollars.
With all those great minds behind their doors, with all that internet-based power at their backs, you’d think they’d be able to look up the history of things. Nothing has launched for six hundred dollars in the video game industry — which is where this product is born from and primarily for, at least initially — and been wildly successful. The Panasonic 3D0 is a legendary failure, and its launch price of $699.99 in 1993 was likely the primary factor in its meteoric demise.
The PlayStation 3 was launched in 2006 with the success of the PlayStation 2 at its back, and its $599.99 MSRP caused it to spin its wheels for years. It didn’t start to gain any reliable traction against the Nintendo Wii or the ever-problematic, easy target Xbox 360 until 2012. In fact, multiple news stories were published over the course of several years about how badly Sony was hit, financially speaking. A great deal of this could have been due to the PlayStation 3’s expensive development, and its expensive price tag scaring off all but the most well-off early adopters.
The difference here is that the PlayStation 3 was a complete package, as it provided a game console, one of the first mass-market Blu-Ray disc players, an internet browser, an online service where people could communicate, play and purchase software, as well as having access to online video services like Netflix and Hulu. Granted, some of these features were updated into the system firmware post-launch, but even without them the system was a device that required nothing else in order to use it, save for a HDTV.
Sadly, the Oculus Rift cannot make any of these boasts, and worse still, it is merely an ancillary device used to change the way you interact with very specific things. It is not a standalone piece of hardware that can offer anything out of the box, only performing the fulfillment of something else’s potential. That’s not a problem in and of itself, if the hardware weren’t as expensive as products that offered so much more by comparison. The PlayStation 4 does even more than the PlayStation 3 does now at the end of its operational lifespan, and it still launched for $200 cheaper than the Oculus Rift. Sony learned the cost of not hitting mass-market expectations, and found out that the way to future-proof a product didn’t have to involve present-proofing it in the process.
Some would argue that we already spend more than that on other devices, such as smartphones and tablets. While that may be true, many of these products are not purchased at full retail cost, as they are normally sold to consumers by way of carrier-based retail outlets. They exchange a service agreement of some kind for subsidizing the cost of the device over a period of time, which are reflected in the monthly charges found on the billing statement. The device is brought down to a palatable price range, the result normally ranging anywhere from an out-of-pocket cost of $200 to as cheap as free. The Oculus Rift will likely not have such luxuries ahead of it, and as a standalone device, it’s going to do far less on its own than sophisticated smartphones can.
On top of that, the VR market is about to become very crowded, with Sony’s PlayStation VR, Valve and HTC’s Vive, and the upcoming efforts from Samsung. Microsoft’s Hololens is also looking very interesting, as it pushes Augmented Reality — a digital overlay on top of real-world physical objects — instead of the purely virtual experience provided by the previous list of competitors. All of these headsets are going to cost some significant amount of money, but the one thing that’s certain is that they are likely to undercut the price of the Oculus Rift; the exception being the Hololens, which looks to be the most expensive of the bunch but is still somewhat justified in being so, given its radically different aims and approach.
As mentioned before, Sony knows the cost of pricing things out of mass-market reach, and their strategy with the PlayStation 4 has proven their ability to learn from their prior mistakes, as the moderately-priced PlayStation 4 has sold over thirty million units at the time of this writing. I would certainly expect Valve — best known for being the company behind Steam, the most ubiquitous digital distribution platform on PC’s this side of iTunes — to step up (down, rather) in this regard. I could see them pushing a headset at the $250-$350 price point, and offering constant progress on all things related to functionality with upcoming games released through Steam, as well as their ambitious-yet-nascent open-source SteamOS, which seeks to carve out market share as the first game-centric distribution of the Linux operating system.
In closing, most of the video game industry’s customers only have so much money to freely spend, and large-chunk purchases are usually geared toward something that will have multiple uses or at least fulfill major necessity; these are normally purchases such as a console, a display, internal components like high-spec video cards, etc. There are many people who will readily spend $300 on something like the Oculus Rift, and the reason I know this is because all of the pre-release Development Kit units were in that price range. Somehow, the final product is twice that amount, and I can’t help but think that a company as well-staffed as Oculus has a reason for it. Perhaps they’re attempting to play a long-game strategy where they release a lighter, smaller, less feature-filled edition in a year’s time. Perhaps they’ll use that chance to undercut their competition as a reponse to competitors’ imminent undercuts.
However, there’s still nothing to be gained by pricing the initial heasdet out of the comfortable price range for the mass-market demographic, and doing so achieves two things: one, it ensures that the stigma of VR being an expensive fad, and two, it risks the Oculus Rift being seen as a rich man’s distraction, and not the sea-change phenomenon it could (or even should) be. VR may very well become the next shift in media, the stepping stone that takes us from television, just as television took us from radio on its arrival. But in order to do that, the average Joe needs to be able to pick one up without having to open a line of credit in the process.
I’ve spent quite a lot of time over the past year and change working with Oculus Development Kits, and I saw the future at $300. At $600, I see a near-future of less headsets on people and more hands in pockets, waiting for someone to better understand the customers that are destined to make the best use of them.