Mending the Rift: Facebook drops Oculus price by $200

The Oculus Touch controllers are now half-off at $99, and the Rift headset is $499. Will that be enough to attract buyers?

Sean Hollister Senior Editor / Reviews
When his parents denied him a Super NES, he got mad. When they traded a prize Sega Genesis for a 2400 baud modem, he got even. Years of Internet shareware, eBay'd possessions and video game testing jobs after that, he joined Engadget. He helped found The Verge, and later served as Gizmodo's reviews editor. When he's not madly testing laptops, apps, virtual reality experiences, and whatever new gadget will supposedly change the world, he likes to kick back with some games, a good Nerf blaster, and a bottle of Tejava.
Sean Hollister
4 min read

People are surprisingly willing to try goofy-looking VR headsets. They're just not ready to buy.

Facebook , owner of Oculus VR, is hoping that may change with a new lower price. On Wednesday, the company announced a permanent $100 price cut for each of its $599 Oculus Rift headset and $199 Touch motion controllers. They now cost $499 and $99 respectively, or $598 for both. The Oculus Sensor price will also be cut from $79 to $59 later today.

Is that good news for prospective VR buyers? Sure -- but when a company chops the price of a product in half after just three months on the market (the Touch controllers), it also hints at poor user adoption.

Oculus Touch and Rift (pictures)

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Once the de facto leader of the recent push to bring virtual reality headgear to the masses, Facebook's Oculus now appears to be trailing the pack. While the division won't release sales numbers, Oculus Head of Content Jason Rubin admitted -- in a blog post Wednesday -- that less expensive "console VR" headsets are outselling PC-based ones like Facebook's own Oculus Rift.

That's telling, because only one "console VR" headset currently exists: Sony's PlayStation VR , which sold 915,000 units as of mid-February, just four months after its launch. While fewer than a million sales isn't exceptional for a consumer gadget, it also appears that demand may be trumping supply: as little as two months ago, Japanese stores had to raffle off chances to buy the PlayStation VR when hundreds of people lined up overnight.

Compare to Facebook's Oculus, which decided to quietly close hundreds of its pop-up experiences in Best Buy stores after reportedly seeing poor traction at retail. (Facebook dismissed the move as "seasonal changes.")

While Sony is the first high-end VR headset maker to release sales numbers, research firm SuperData also estimates that Oculus may also be trailing behind the HTC Vive , and only toe-to-toe with Google's phone-based Daydream headset -- which saw a temporary price cut of its own from $79 to $49, as Google worked with manufacturers to produce more compatible Android phones.

"This [price cut] is the clear result of disappointing sales and a deteriorating public image," says Superdata analyst Stephanie Llamas.

SuperData Research VR sales estimates and forecast

Estimated Sales (2016)Forecast (2017)
Samsung Gear VR 4,513,0006,701,000
PlayStation VR 745,0003,492,000
HTC Vive 420,0001,340,000
Google Daydream 261,0006,796,000
Oculus Rift 243,000496,000

Would lower prices make a difference? SuperData analysts aren't sure. "Improving the combined hardware and software offering of VR is what matters," says analyst Joost van Drunen. "Money only plays a limited role in that." Llamas thinks that price could bring "greater accessibility," because it's hard to sell "a luxury item that has no clear 'killer apps.'"

It doesn't take a VR researcher to see why buyers might be gravitating toward Sony, HTC, or Google instead of Facebook's Oculus:

  • HTC: Early reviews of the Oculus Rift adopted a "wait-and-see" tone, because the headset felt incomplete without the ability to walk around or grab things in a virtual world -- features that the HTC Vive, released days later, offered right away. (CNET, among other publications, rated the Vive higher.) Even when the Oculus Touch controllers arrived in December to add those features, they didn't offer the same freedom of motion.
  • Sony: The Oculus Rift and HTC Vive offer better graphical fidelity -- if you plug them into a pricey (typically $1000, but more recently as low as $500) gaming PC. The $500 PlayStation VR only requires a $300 PlayStation 4 to function, and you're more likely to own one already: there are already 53.4 million PlayStation 4 consoles in the world, compared to an estimated 21 million VR-ready gaming PCs according to SuperData.
  • Google: Like Samsung's Gear VR , which has now sold over 5 million units, Google's headset doesn't need to be tethered to a console or PC. It only requires a compatible phone -- at the expense of some graphical fidelity and the ability to walk around a virtual world. SuperData believes Daydream will lead the pack in sales this year.

But initial sales aren't the whole story; particularly not if you believe, like Facebook CEO Mark Zuckerberg, that VR is a long-term investment. During the Oculus-ZeniMax trial, Zuckerberg testified that it could take another decade -- and $3 billion of investment -- to bring VR to hundreds of millions of people.

"If anything, we may have to invest even more money to get to the goals we had than we had thought up front," he said, according to The New York Times.

Or put another way: "This increased investment means better software which in turn brings more consumers," writes Rubin, Oculus's head of content, in his Wednesday blog post.

The hunt for the killer app continues.

Disclosure: Sean's wife works for Facebook as a business-to-business video project manager.

Correction: An earlier version of this article cited an Nvidia claim that there were 15 million VR-ready PCs total as of 2016. We now believe that meant 15 million Nvidia-powered VR-ready PCs, without counting ones powered by AMD. We have replaced the number with a SuperData estimate of 21 million VR-ready PCs until we can add AMD's official tally.