Palmer Luckey, Founder at Oculus - #5 — Oculus founder Palmer Luckey on stage at Oculus Connect 2015 | Photo courtesy Oculus

Oculus Founder Talks Pricing, Remote, Touch and More in Reddit AMA

Jan 7, 2016

Palmer Luckey, Oculus’ founder and inventor of the company’s iconic first VR headset, answered number of questions from the Reddit community in last night’s AMA (ask me anything), even admitting in a comprehensive question that his $350 ballpark figure on Rift pricing leading up to pre-orders ‘was handled poorly’.

Luckey answered a large bullet-point mega-question last night, culminating in an avalanche of answers regarding the Rift’s pricing, the newly revealed Oculus Remote, Oculus Touch and much more. Because Luckey managed to address many questions in the thread, we’ve condensed it down to show only new info.

Q: The price is what it is – I understand bleeding edge electronics is expensive. My question is: Why was the messaging about price so poor? $599 is not in the ballpark of $350 when your target audience is the mainstream.

Luckey: I handled the messaging poorly. 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.

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. 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. 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.

To be perfectly clear, we don’t make money on the Rift. The Xbox controller costs us almost nothing to bundle, and people can easily resell it for profit. 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.