Oculus Rift now expected to cost more than $350

Ever since the Oculus Rift debuted on Kickstarter, there have been questions about how much the headset would cost. The first dev kit cost $300 when purchased as part of the Kickstarter and the second dev kit, which improved on the platform in a number of ways, weighs in at $350. Analysts had expected that Oculus would attempt to bring the Oculus headset to market at around that price point, since $350 is already an incredibly steep price for a nascent platform, but CEO Palmer Lucky has shattered that expectation.

According to an new interview published by RoadtoVR, Lucky has now stated that the kits will be more than $350, though he’s not willing to state how much. Lucky explains that theOculus Rift has added a great deal of additional technology since the days of the DK1 and DK2. According to him, the Rift is designed to be the best VR experience, hands down:

“It would really suck if you put something out there and people were like ‘Ah man… the Rift is good, but it’s not quite there, you know? If only it was a little better, if the lenses were a little better, if the resolution was a little better, if the screens had been a little bit better, then it would be great because you’d you’d say God, we could have just charged a little more and put a little bit more money into custom hardware and actually achieve that.’… I can’t tell you that it’s going to be $350, and I would say I think people are going to be happy with what they get for the price because I really do think it’s going to be that best VR headset you can buy.”

How the perfect is the enemy of good

There are multiple reasons why this price is unlikely to sit well with the company’s fans. First, the entire point of the Facebook acquisition was supposed to be to give Oculus funds that would allow it to bring products to market that didn’t cost this much money. $400 (the minimum likely price point) is the same as what people would shell out for a PS4 or Xbox One bundle, which would contain multiple games. It’s the cost of a high-end PC video card or a 42-inch 1080p TV. That’s a huge commitment for an utterly unproven technology with few-to-no shipping titles on launch day. I’m certain there’ll be a game or two and some tech demos, but it’s going to take years before VR is widely integrated in games, assuming it achieves critical mass at all.

Next, there’s the unflattering comparison against other VR solutions. It’s all well and good to aim for the top of the market, but that tends to only work when you’ve got a track record of delivering premium products. Companies like Apple have pulled this off before, but Oculus isn’t Apple. Perhaps more importantly, committing to a $400 Oculus also means buying a system capable of using that hardware effectively. The Oculus Rift may offer a vastly superior experience to, say, the Gear VR, but you can buy four Gear VR headsets for the price of a single Oculus Rift. That comparison isn’t flattering.

The final problem is this: Oculus wants to deliver the premiere VR experience, but a $400 price tag guarantees that if the mass market adopts VR, it won’t use Oculus hardware — it’ll use equipment from Samsung or another low-cost manufacturer. This, in turn, means that whether VR sinks or fails will depend entirely on the experience of using VR on someone else’s hardware. If consumers buy low-end VR hardware and hate it, they’ll blame VR as a poor use of technology.

I’m torn on this point, because I think high-quality VR experiences are critical to achieving acceptance for the platform — but if those experiences cost $400 or more, it’s unlikely that VR will ever achieve critical mass.

Sensible maneuver or Oculus Grift?

I believe Lucky when he says he wants to build the premiere VR headset experience you can have today, but I’m not at all convinced he’s made the right call on this one. Much will depend on how Sony’s PlayStation VR and the HTC Vive are priced. If Oculus comes in under these solutions, it could still win significant marketshare for itself, even if the high price tag keeps most users on the sidelines.

Right now, it looks as though Oculus has priced itself neatly out of the market. At $400+, users are going to look for other solutions — and companies like HTC could make a killing on selling “good enough” hardware. By staking an early claim to best-in-class, Lucky may have ensured that the Rift becomes irrelevant.