Recently Mark Zuckerberg announced he planned to sell Oculus headset as cheap as possible.
The advent of a commercial VR technology is expected for so long that the final release of Oculus consumer version is going to cause a true revolution. Nowadays Oculus positions are strengthened by Facebook resources that are believed to help with pricing issues. According to the estimates of Oculus CEO Brendan Iribe worldwide sales of a VR headset can achieve one million units. Mark Zuckerberg intends to reject margins reducing the price to the maximum. Such technique helps extend the range of potential customers. At the same time being a top manager Iribe is more focused on running a profitable or at least a break-even business rather that suffering losses.
Oculus top management is deeply convinced that after a second consumer version is completed the influence of Facebook will be more noticeable.
While Iribe still hopes to make Oculus a profitable project Palmer Luckey, a founder, looks much controversial stating Oculus has no plans to earn money from sales.
Palmer revealed that the next six months will be crazy considering the amount of work to complete. All team members are working literally day and night to improve the product. Comparing DK2 and the first consumer version, Palmer indicates the last will be a lot better. Many improvements are a commercial secret but Luckey confirmed the device will be lighter and smaller, with higher resolution, wider field of view and better framerate.
“DK2 wasn’t designed to be the thinnest or lightest thing we could make, or the cheapest for that matter: it was meant to be something we could get out quickly, that did all the functions we needed it to, very reliably”, says Luckey. “But it is a developer tool. We reused a lot of the same parts for DK2 that we used for DK1, because that allowed us to move a lot faster. But for the consumer version we are making every piece from the ground up. There isn’t a single piece from DK1 or DK2 that will go into it, so we’re able to design it from the beginning to be a perfectly integrated, minimal piece of hardware”, he continues.
The components changes are always enough expensive so the margin has to be respectively reduced. Palmer plans to sell the headset at a cost. “Whatever it costs us to make, that is what we’re going to sell it for. That’s one of the things the Facebook deal has allowed us to do: because we already have the resources behind us, we don’t have to worry about making money from our customers right away. If we were running purely on our own and trying to make money just from hardware, we would need to make enough profit from each unit to pay for running the company for several years, until we launched the next one.”
So now it became clear that acquisition by Facebook provided Oculus with a substantial financial support and deprived of the necessity to establish high margins and wait years to collect money to invest in further development.
Except of solving price problems, Oculus is involved in the foundation of its own game studios. The possible locations include Seattle, Dallas, Menlo Park and Irvine. These centers will unite a lot of people developing content for Rift. The first demos are anticipated to appear by the next E3.
Undoubtedly leading the VR race, Oculus also pays much attention to the closest competition. Luckey doesn’t feel anxious that many companies are trying to conquer the promising market. On the contrary, he thinks the presence of other companies in a market is a good sign. “It lets people know that VR isn’t just this thing that one crazy company believes in, it’s something that a lot of companies, even really big companies, believe in”, he adds.
Palmer is very optimistic about Sony’s achievements but is very concerned about apparently weak companies. “Sony’s hardware isn’t up to where it needs to be, and neither is ours, but even though neither of us have a consumer product yet, we understand the problems and we know what we need to do to fix them. Other companies either don’t understand the problems, or choose to ignore them and I think that’s dangerous. I don’t want people to try VR and think it’s garbage. It’s not hard to release a consumer product – people release garbage consumer products all the time. ANTVR – they’re saying Oculus doesn’t have a consumer product yet, but our dev kit better than what they’re selling to consumers. Just saying it’s for consumers doesn’t make it a good product”.
Considering the fact Oculus final release was postponed several times thousands of fans are eager to purchase a unit immediately. Meanwhile Luckey is not in a hurry at all. He admits he doesn’t care people want Rift right now since the only thing that matters is to do the job right, not quickly.