The six week Oculus Rift sale has made tangible waves within the VR community with its ‘best-yet’ $400 price point. And while the new price is bringing more early adopters into the fold, mainstream adoption is still hindered in large part by the need for high-end computer hardware to power the headset.

Guest Article by Colin McMahon

McMahon is an Industry Analyst at Greenlight Insights, the global leader in virtual and augmented market intelligence.

For the next six weeks, the price for an Oculus Rift bundle (Oculus Rift headset with Oculus Touch controllers) is $400. After this, the price will rise to $500, still $100 less than the cost to get the headset and controllers before the sale, and $300 less than the cost at the start of 2017. Effectively, the sale has made the system half the price of the Rift’s leading rival, the HTC Vive. According to Greenlight Insights’ May 2017 industry forecasts, over five million PC-tethered VR headsets will be shipped by the end of 2017.

Image courtesy Oculus

The new Oculus sale price has already been celebrated as a potential industry savior. However, the newly reduced post-sale price of the Rift bundle ($500) remains more expensive than a PSVR and roughly four times the cost of most premium mobile-based VR headsets. Furthermore, the total cost to the consumer begins to skyrocket when the cost of a VR Ready PC is factored in. Even on sale, the price of a Rift bundle and a VR Ready PC would still run upwards of $1,000 which is a blocker to market traction beyond early adopters. According to Greenlight Insights’ recent consumer study, this price is well outside the acceptable price range that most consumers are willing to pay for VR (only 15.1% of consumers are willing to spend above $400).

While price is the chief concern, the Rift bundle doesn’t solve one of the most important challenges that all PC VR headsets face: according to its annual survey on consumer attitudes and behavior toward virtual reality, Greenlight Insights has found the general public prioritizes ease-of-use when making a purchasing decision. In fact, since the first survey in 2015, Ease of Use has consistently been in the top three criteria selected by the survey’s respondents.

Non-tech savvy shoppers will still balk at upgrading graphics cards and setting up the boundary system needed to properly run room-scale VR experiences. Oculus’ move is not likely to win over the general public or steal market share from mobile/console VR which still leads in ease-of-use. Instead, the Rift sale will likely have greatest appeal with the PC-owning tech savvy early adopters.

As the battle for market share intensifies, Oculus hopes to increase its share of the PC VR hardware space now. But, as we look five and ten years out, the company that has a large installation base and engaged, daily users (as well as robust application developer support) will likely win, so the company will need to prioritize engagement as much as sales.

SEE ALSO
HTC Explains Why It Hasn't Lowered the Price of the Vive

Given Oculus’ legal troubles and surprising absence in the now formidable location-based virtual reality entertainment (LBVRE) sector, the company’s new aggressive pricing strategy must be analyzed carefully and interpreted with caution. While the ‘Summer of Rift’ is here, don’t expect it to translate to mainstream traction just yet. That said, Oculus could still see an incremental increase in unit sales this year, and that is, at this point, significant.

For a full picture of how the VR industry is evolving, see the 2017 Virtual Reality Industry Report from Greenlight Insights and Road to VR.

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Road to VR
  • bschuler

    Mobile VR users are finding it a dead end as they either don’t want to kill their battery or they find their battery already too depleted to play when they want to. That’s why you are seeing all these stand-alone mobile headsets announced. That will help bring in many people to VR.. kind of like how a cheap used scooter starts people on the path to a motorcycle. But in the long run, people who enjoy VR, etc.. will gravitate to the Harley Davidson of VR. Not all will, but many will. I think most companies realize VR is a long man’s game.. and either your the top company.. or you fight hard to be the budget friendly alternative. I think right now VR is getting a lot like PC manufacturers in the 90ies. Too many companies making too many similar products. And just like Gateway, Compaq, etc, etc, got bought up and went away…. VR is nearing that point.

    • WyrdestGeek

      My problem with using the phone for VR isn’t really the battery so much.

      It’s kinda everything else– biggest thing is no positional tracking feels like a huge thing to not have– like I’m only *in* VR at one fixed point, I can’t actually move other than teleport. It ain’t very immersive.

      Other problem is that my phone mostly needs to be a phone– or at least some sort of general screen device. It’s like: jack of all trades, master of none– I would hope I can get better service out of a dedicated stand alone device.

    • yexi

      I totally agree, and want to add that many companies made the market blurry voluntarily to lure poeple… Even for an evangelist of VR, it ask hours everyday to understand every new annoncements, and sometime it’s very blurry even for us.

      For someone who do not know anything about VR, it’s very difficult, if not impossible, to compare all the existing products and choose the most adapted.
      Word like “mixed reality”, “PSVR” which become “VR”, and lies on spec like saying “100° of FOV” but you need to divide per two, completly lose people mind.

      Result ? people do not understand the gap between the different headset categories (Low-end Mobile/High-end mobile /High-end PC/Low-end PC/…) and thing they have test all the VR when they try a GearVR

  • Sponge Bob

    its called loss leader
    facebook that is – but they don’t care – too much money coming in other ways
    the last moment of glory for octopus
    next year some company will kill them all – octopus and vive too
    (not even talking about “mobile VR” – that sh1t is useless)

    • They seem heavily invested in VR to die n go away that easily.

      They’ll be one of those “why wont you jus die” companies.

      • Get Schwifty!

        As they say, haters gonna hate….

    • Kris Bunch

      Last moment of glory? You do realize FB has dedicated $500 million to content development? They have also achieved savings in their manufacturing pipeline which they said they are passing it along to consumers. Also this isn’t any different than the console or the phone market. The real money isn’t in hardware sales, it is in licensing and percentages from selling from Oculus Home. So drop the price, get your install base larger, attract more develupers. Oculus isn’t going anywhere. This price cut isn’t designed to bring in the non-savy, it is aimed at high end PC gamers who already have a rig that can run Oculus.

      • Sponge Bob

        hardware will change a lot over the next 2-3 years
        new entrants will come with better products
        when hardware (e.g. controllers) changes drastically all software apps (e.g. games or productivity apps) become outdated if not useless

  • Foreign Devil

    If a Nvidia 1080 or equivalent video card can have it’s price cut in half, then we will see major adoption of VR on PC. That is the single greatest expense now. . more than the Rift itself! Maybe Facebook should brand and sell a VR 1080 graphics card optimized for Rift.

    • MosBen

      Half wouldn’t even be close. The whole system needs to be in the $500 range, and it needs to come with the graphics card already installed or on-chip. Most people have no interest in opening their desktops up to install graphics cards, even though it’s dead simple these days (assuming you have a power supply that can accommodate it). That’s what people really mean when they say that “ease of use” is a major concern: they want to go out and buy a reasonably priced headset that just works with the PC that they already own (or if their PC is older and needs replacing, with a cheaper PC that the can buy off the shelf). People don’t love setting up things like the play area, but the Rift setup makes it pretty straightforward. It’s having a PC that can run VR in the first place.

    • Get Schwifty!

      A 1070 will do the job for most folks just fine and even a 1060 will suffice in the majority of cases.

      • Raphael

        A 1070 is priced far beyond most gamers.

      • SomeGuyorAnother

        Tested out my nephews laptop over this last week, running an i7 and 1060, and it was running Echo Arena and Robo Recall beautifully without hiccups or need of ASW. I’d say any desktop running a 1060 or higher would do just fine if a laptop can manage, bringing the price of a PC into reasonable range.

        People are too use in gaming to get too caught up in the graphics, since that is the only major advancement people noticed for the last decade, but the majority aren’t realizing that VR is about the new input method. This is why you hear many people saying to ignore the complaints about resolution, since after a short while, you’ll find yourself not noticing it in favor of just enjoying the new, interactive controls that’s been given to us.

        • NooYawker

          Simply pumping out 90fps per eye takes a lot of graphics power. It’s not just “oh, it’s prettier” when it comes to VR. Smoother, clearer frames also helps with motion sickness when it comes to full locomotion. Resolution is a major factor in VR.

          • SomeGuyorAnother

            There’s a difference between framerate and resolution. Framerate is currently one of the limitations of higher resolutions, as is seen Pimax’ 4k headset, which only hit 60 Hz. I’m having trouble following your comment, since you focus on framerate throughout, then call it resolution. Framerate is important, yes, which is why graphical requirements aren’t lower, and as stated, the 1060 is capable of managing this.

      • Kris Bunch

        I agree with @SomeguyorAnother. I am running an i7, 1060 graphics card with 8 GB of RAM. I have no issues running VR games on my Oculus. It isn’t about the best resolution. If the game is good you lose your self in the immersion. If you are trying to decide what to upgrade I say upgrade your i5 CPU to an i7. I initially had an i5 and load times were horrible on some games. Talk about breaking immersion! Since I have upgaded to i7, my load times are significantly less.

        • SomeGuyorAnother

          As someone running an i5, I agree. VR has turned out to be quite CPU intensive, though sometimes this can be optimization issues, but I’ve definitely noticed some bottlenecking in my CPU at times. Due to the need for immersion, many developers are adding in the little tidbits to play with in their games, which increase the physics processing done, which fall on the CPU.

    • NooYawker

      Even cut in half you’re still talking about a $1000+ machine to build. To purchase a pre-built machine even more.

  • Mane Vr

    good read and with ease of use as well as content high on peoples list is a very good thing for oculus cause while setup isn’t as easy as psvr it easier than vive and the fact the rift doesn’t need a 3rd party hack to play Any games also gives it a heads up

  • We’ll see if the real concern is ease of use when Microsoft headsets will come out. They’re super user-friendly

    • Sponge Bob

      what about controllers for those ?
      haven’t seen any yet
      without controllers they are useless

      • daveinpublic

        They showed the controllers.

        • Sponge Bob

          where ?

          any video demo ?

  • Tommel

    “high-end computer hardware to power the headset”

    In early 2016 the Rift/Vive maybe required a high end system… but now? I hear people using the Rift with systems far below the minimum requirements. I think that today you maybe need an average computer to run a Rift/Vive (of course, things like supersampling etc. are a different topic).

    • MosBen

      Well, an average GAMING PC, but not an average computer. I have a friend who recently purchased a new computer. I knew that he was thinking about it, and hoped that he’d get something that could at least be made to be VR compatible. Unfortunately, one day he just went down to Best Buy and bought a mini desktop that doesn’t have a good enough graphics card to run VR and has too small of a power supply to allow him to drop a better card in. A GTX 1060 may be an average graphics card in the realm of gaming graphics cards, but the average PC sold has a much lower spec graphics chip, if it has discrete graphics hardware at all. When people are able to play today’s level of VR on an off the shelf $500 system, that’s when we’ll see more mainstream adoption.

      • cirby

        According to Steam, about 25 million of their customers ALREADY have PCs capable of running VR. Good enough GPU, fast enough CPU, et cetera. This is about double the number as of early 2016. In other words, the VR-capable computer target market doubled in just about twelve months. Once the current GPU drought eases up (due to the collapse of the cryptocurrency bubble), GPU prices will come back down to something more reasonable, instead of the $200-a-pop additional cost we’re seeing on midrange cards.

        About 25 million people play Overwatch, for example – and to play it well, a helluva lot of them bought systems that are pretty obviously VR-ready.

        By harping on “you have to have a monster computer to play VR,” a lot of people are giving up on it before they even start, even though they already have that “monster” sitting in the room with them.

        • Caven

          No, you don’t understand. It’s illegal to use a computer you already own for VR. You have to buy a new PC for VR or you will get arrested, no matter how much your computer exceeds the VR minimum spec. Also, everyone knows that VR is only for people who don’t otherwise have an interest in computers. I mean seriously, what kind of weirdo would be interested in computers AND virtual reality? People who own computers hate VR and people who don’t own computers love VR. That’s why every journalist, their grandmother, and pet goldfish will remind you about the expensive PC needed for VR, because if you already have a computer, you have no interest in VR.

          In all seriousness, I wish they’d shut up about the “all in” cost of VR. While I’m sure there are people who’d need to upgrade, as you pointed out there are millions upon millions of people with a powerful enough PC who could reasonably be expected to be potentially interested in VR. I mean, if we can’t assume a person interested in VR is the sort of person who would have a decent PC, maybe we shouldn’t assume they have internet access, which they’ll need to access VR content. And how do we know they have a place to live? Can’t really run VR from the city park or an alley, after all. The “all-in” cost of VR is probably $10,000 per year or more if we can’t be bothered to make reasonable assumptions about the target audience.

          • J.C.

            this this this. VR isn’t for “the masses” yet. Even at a lowered price, if it takes more than 3 seconds to get it working, your average Joe isn’t gonna want it.

            The people with gaming rigs already are their target audience for this generation and likely also the next. Maybe by the third generation of VR kits, they’ll be very simple to set up and use, without the compromises the stand-alone headsets coming this year will have.

            The goal needs to be to get reluctant pc gamers to hop onboard. Oculus honestly is doing the best thing for this: funding more “full games”. Valve says they have 3 games coming, but being made on “Valve Time” means they won’t be out during this generation.

  • Carl Galilee

    Failing to see what this snippet from the report tells us that we don’t already know.

    Of course the oculus deal is mainly going to attract pc savvy early adopters. Just as high end gaming systems attract pc savvy gamers.

    As an old fart, I remember pc gaming as a highly niche and pricey hobby. That hasn’t stopped it flourishing as the years rolled by despite numerous analysts writing it off as dead in the water along the way.

    High end HMDs are no different in this respect. They don’t have to appeal to mass market. They just have to gain enough traction so that AAA producers are willing to jump on board. In the meantime we’re able to enjoy and support some great indie work and say that we were there to help shape the future of VR.

  • Andy McEvoy

    I know a good few people who were holding off until next gen and or needed a pc upgrade who are now very close to buying a cv1 at this price. I can see Oculus scooping up quite a few sales like this.

    • Abby Reitz

      I have the pc upgrade ( just built a new ryzen system with a 1080) but was holding off for the next version of VR (even if it was at a higher price point). The day the rift dropped in price I went out and bought it. You cannot beat $399 for everything it comes with.

  • I pointed out this Oculus sale moment the E-mail from Oculus hit my mailbox, but so far only two of the 50 people on my Facebook list have expressed any interest, and only one of them threw down the money on the prerequisite computer to support it. PC Gaming, in general, is a VERY expensive hobby. For a PC Gamer, this $400 bundle is a bargain, but for everybody else without the high-end computer, it’s still just a costly toy, way outside of their acceptable price range.

    It was a well timed sale for me though! I wanted the CV1 and Touch set, and had been thinking about buying one for months leading up to this.

    If you’re into VR development and already have a VIVE, I’d suggest you pickup the Touch bundle too. A seated VR experience at my work station has proven to be a godsent for development. The Oculus headset is, indeed, far more comfortable, and the Touch controllers more capable then the VIVE wands. The Unreal 4 Engine jumps back and forth between the Oculus and VIVE with a few minor tweaks. I had my game setup to handle both in about 10 minutes.

    • Gary Merchant

      PC gaming is not really an expensive hobby. Most hobbies are more expensive.
      A few examples. drones, 3d printers, hotrodding cars, golf, sculpture art, musical instruments. I could go on…
      If you think 400 dollars is too much to spend on a hobby you’re not someone who has ever had a real hobby.

  • CURTROCK

    Oculus has cut their price by 50%, and increased the value proposition significantly with content, etc. They have lowered the bar for VR capable computers with ASW. They are also developing several other standalone products that will provide gateway VR experiences at even lower prices, no computer required. I find it hard not to feel optimistic with the trajectory and current state of VR.

  • WyrdestGeek

    *If* I already had a working system w/ graphics card to run it, at that price, I’d buy it.

    But all I have is a couple of i3 laptops with Intel graphics chipsets.

  • Raphael

    Non-tech savvy (muppets) refusing to buy VR because they can’t setup boundary but being muppets even if they did setup boundary they would run straight through it into a TV or wall.

    The downside of VR becoming mainstream is that it falls into the hands of muppets. Indeed we are already seeing this. There are muppets buying VR who don’t know what VR is and then complain because it doesnt look as sharp as a 4k monitor from 1 metre. Muppets buying VR and then bragging about it gathering dust because “there are no good games”.

    VR used to be such niche tech that it was only acquired by people who knew what it was and what to do with it.

  • Lucidfeuer

    Again…see you late 2017, by then maybe people will understand that price never was and never is a “buyer’s concern”.

    Now that’s a pretty nice affordable pack in terms of pricing…but you’re still selling a product that most people don’t see a point or use for, and rightfully so. Even though I’m surprised it didn’t at least reach 1 million sales in dedicated/amateur/professional target markets.

  • NooYawker

    Most early adopters never took price into consideration, especially ones that upgraded their machines just for VR. Anyone who has a 1080 powered machine is ready to drop big bucks on the best, not the cheapest.

  • iThinkMyCatIsAFlea

    The Vive truly is a great VR headset though.

    The Oculus Rift is cheap because it truly is a cheap headset built by cheap people.

    Just look at the Oculus outfit; There’s the founder of Oculus, Palmer ‘alt-right, Trump-loving’ Luckey. Google Oculus Trump for more on that git.

    Next we have John ‘Hard Drive Destroyer, Code Stealing’ Carmack. Google John Carmack Zenimax robbery for more info.

    Facebook bought Oculus for just $400m in cash. The rest was in Facebook shares. Because Facebook knew that Oculus were a cheap outfit…

    • Stephen Mullins

      Wat

    • beestee

      If you really think that buying something from a company is equivalent to supporting the views and actions of the leadership of said company, then I am surprised that you purchase anything from any company and/or suggest that others purchase anything from any company.

      Have you looked equally into the leadership of HTC and Valve to determine that they are no more reprehensible and that you can freely suggest that your political and ethical views align more closely with them?

  • Joe Black

    If only I could actually order it in my country… lol

    We’ll see what MS Mixed Reality brings. Here’s hoping.

  • James Abrahams

    One thing I have found is that when it comes to the price of a “high end gaming PC” is an issue… well it kinda is. A 1060/ 960 is a pretty low-entry desktop gaming PC now, so its more about newness. My friend finally bit the bullet and bought one with a tax rebate he got because he already had a 1060.

    Sure for mass market appeal, people who don’t have gaming PCs they won’t be able to afford it but I think if desktop VR can conquer the gaming market first that’s pretty great. All the cool social stuff that non-gamers will want will probably start happening more when the stand-alone stuff ships (maybe…. I still think positional tracking matters)

  • Bill

    They keep deleting this post.

  • Lukas Thompson

    I just ordered mine <3 luckily I'm one of those people that already had a PC ready for VR just needed the headset. Glad I waited and it dropped this low, saved $400, sure I'm a little behind for development now, but hell I'll be able to catch up in now time. Can't wait for Monday!