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Oculus Founder Tries Explaining That $600 Price Tag

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The Oculus Rift will cost $600. That’s a lot of money, especially when Oculus founder and designer Palmer Luckey had previously mentioned a $350 ballpark for the target gamer audience. Luckey addressed that in a new Reddit AMA. Well, sorta.

I appreciate when the person at the top (or, at least, near the top), steps up to the plate to deal with a crisis—the crisis here is people freaking out about paying $599.99 for a Rift when they thought they would be paying far less. When asked about that lower $350 number, Luckey replied that he “handled the messaging poorly.”


Meaning? He fucked up the sales pitch. Continuing, here’s Luckey scrambling:

“Earlier last year, we started officially messaging that the Rift+Recommended spec PC would cost roughly $1500. That was around the time we committed to the path of prioritizing quality over cost, trying to make the best VR headset possible with current technology. Many outlets picked the story up as “Rift will cost $1500!”, which was honestly a good thing—the vast majority of consumers (and even gamers!) don’t have a PC anywhere close to the rec. spec, and many people were confused enough to think the Rift was a standalone device. For that vast majority of people, $1500 is the all-in cost of owning Rift. The biggest portion of their cost is the PC, not the Rift itself.”


Here, it seems like he bandies about a bigger $1,500 number so that $600 price tag won’t seem so bad. The issue here isn’t the price of buying a PC, but the cost of the Oculus. Also, is he saying high prices are good because they scare uninformed people away?

“For gamers that already have high end GPUs, the equation is obviously different. In a September interview, during the Oculus Connect developer conference, I made the infamous ‘roughly in that $350 ballpark, but it will cost more than that’ quote. As an explanation, not an excuse: during that time, many outlets were repeating the ‘Rift is $1500!’ line, and I was frustrated by how many people thought that was the price of the headset itself.”


Basically: If I preface an excuse by saying it’s not an excuse, then it’s not an excuse.

“My answer was ill-prepared, and mentally, I was contrasting $349 with $1500, not our internal estimate that hovered close to $599—that is why I said it was in roughly the same ballpark.”


Wait. What? Why would you do that? Why not just say the internal estimate instead of running through the mental gymnastics of comparing $349 to $1,500? That’s the best way to set expectations. Not like this.

“Later on, I tried to get across that the Rift would cost more than many expected, in the past two weeks particularly. There are a lot of reasons we did not do a better job of prepping people who already have high end GPUs, legal, financial, competitive, and otherwise, but to be perfectly honest, our biggest failing was assuming we had been clear enough about setting expectations. Another problem is that people looked at the much less advanced technology in DK2 for $350 and assumed the consumer Rift would cost a similar amount, an assumption that myself (and Oculus) did not do a good job of fixing. I apologize.”


In the past two weeks, they suddenly realized people were expecting a cheaper price tag? M’kay.

“To be perfectly clear, we don’t make money on the Rift.”

But they have to make money on something. This is a business, not a charity.

“The Xbox controller costs us almost nothing to bundle, and people can easily resell it for profit.”


Hey, they’re going to make you money!

“A lot of people wish we would sell a bundle without “useless extras” like high-end audio, a carrying case, the bundled games, etc, but those just don’t significantly impact the cost. The core technology in the Rift is the main driver—two built-for-VR OLED displays with very high refresh rate and pixel density, a very precise tracking system, mechanical adjustment systems that must be lightweight, durable, and precise, and cutting-edge optics that are more complex to manufacture than many high end DSLR lenses. It is expensive, but for the $599 you spend, you get a lot more than spending $599 on pretty much any other consumer electronics devices—phones that cost $599 cost a fraction of that to make, same with mid-range TVs that cost $599. There are a lot of mainstream devices in that price-range, so as you have said, our failing was in communication, not just price.”


In short, they totally blew the price rollout.

Luckey answered a whole host of questions in the AMA, and it’s worth reading through all his replies.


To contact the author of this post, write to or find him on Twitter@Brian_Ashcraft.