Oculus Rift, Morpheus may hit market in a year and a half, GameStop CEO says

CEO J. Paul Raines says the main hurdle for the virtual reality headsets will be the price of the device.

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GameStop CEO J. Paul Raines and Matt Mooney, founder and managing director of MPI Eden. Roger Cheng/CNET

ATLANTA--The era of virtual reality gaming is not quite upon us yet.

It'll likely take a year and a half before Oculus Rift or Sony's Morpheus project becomes a commercial product, according to J. Paul Raines, CEO of video game retailer GameStop.

"The stuff is very cool," he told CNET on the sidelines of the Rutberg industry conference on Wednesday, adding, "We'll sell them."

Of course, a lot can change over the next 18 months, particularly for Oculus, which will be acquired by Facebook for roughly $2 billion in a deal announced yesterday.

It's a staggering valuation for a start-up with no real immediate prospects for a product, but Facebook sees its potential as entire computing platform, going beyond simple gaming.

But gaming is likely a good entry point for the product. The dilemma, according to Raines, is the price of the hardware. He noted that gamers have already spent several hundred dollars on the original console gaming device, and likely around $180 for a few games. It's a lot to ask a gamer to buy another piece of hardware that will likely be as or even more expensive as the original console.

Raines speculated that Facebook could potentially subsidize the hardware. He also entertained the notion of offering some sort of promotion to its most loyal customers, the people who have signed up for its PowerUp Rewards program and are up for buying any gaming-related product. Still, he cautioned, this was a long way away.

Another dilemma is getting the right kind of games on these virtual reality products, Raines said. Gamers want popular titles like "Call of Duty" or "Halo" to run on these devices.

"That's where things could fall apart," he said.

But with Sony backing Morpheus and a company with Facebook's clout backing Oculus, you could see popular titles eventually make the leap to virtual reality.

Raines wasn't able to discuss his company's performance because GameStop is scheduled to release its quarterly results tomorrow.

At a conference panel chat later on, Raines was asked about how GameStop would deal with games eventually going digital. He touted the 34 million PowerUp Rewards members in 15 countries that represent a direct relationship.

"That's what keeps GameStop viable," he said.

Raines said GameStop is testing out the use of iBeacons in a recently announced tech research consortium to improve the shopping experience, including the idea of PowerUp members being able to hold up their phones and have augmented reality images or videos related to their favorite game pop up. He said that such a feature would be a part of his concept of high engagement with customers.

While GameStop is traditionally known for video games, Raines has worked to diversify the business to include other products, including selling phones and tablets. In fact, it has taken its used game business and expanded it to purchasing and re-selling used phones and tablets.

GameStop also runs a chain of stores called Simply Mac, which sell and repair Apple products. Raines said he has seen success with the chain because he positions his stores in areas where Apple doesn't have its own retail location.

GameStop also sells AT&T's current prepaid phone service, Aio Wireless, and is preparing for the transition to Cricket Wireless, a larger prepaid brand acquired by AT&T. He noted that GameStop sells its AT&T's Digital Life connected home service, and said he plans to sell connected car services when they emerge.

The topic of connected cars and related services was a central theme at the Rutberg conference.

Down the line, he believes GameStop, which he said offers more personal service than a big-box retailer, will be the one to sell smart and connected devices. For example, it'll be a smaller high-service retailer than will sell a smart LED light bulb, as opposed to your local large home improvement store, he said, citing he aspires to concierge-type service on a broad scale.

"There will be a lot of value to retailers who understand the customer intimacy they can provide," he said.

Corrected on Sunday, 12:38 p.m. PT: The caption incorrectly named the moderator speaking to the GameStop CEO.

 

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