What Oculus Rift’s Pricing Can Teach About Setting Expectations

Pricing a product right or wrong can make a success or failure. Oculus seems is about to learn what happens when you break customers’ expectations in a negative way, doubling the price over what was initially announced.

[ninsigma]

They never announced an official price so that's just false. It's also selling extremely well for its price. Obviously it would have been nice to be priced around 300 but obviously that couldn't happen. They can't just price it at whatever they want. Cost of development and the current market value and other factors are taken into account when pricing these things and this is all brand new stuff so of course it is going to be priced high. As harsh as it sounds, if a person can't afford it, that's not occulus' problem. They priced it to the enthusiast crowd, not to everyone. No one gets mad when the next high end gtx is priced at 600. They accept it's a high end device and move on. Well this is the same. Occulus is at the high end of the vr spectrum. Want a mid ranged one?? Psvr will probably be the one to go for. Then you have gear vr for the low end.

[SniperControl]

No it was never officially announced, but the wording Palmer Luckey used towards pricing was extremely misleading, that's why people are p155ed.

"Speaking in a Reddit AMA session, Oculus founder Palmer Luckey admitted his error in the pricing message, seeing as he initially stated that Rift could cost a “ballpark” of $350, it's understandable people were irate about forking out over $600"

I was going to get both Rift and PSVR this year, but i've opted to go for the PSVR and the Rift next year. I'am waiting for a cheaper contollerless SKU as i have no interest and will never use the included controller.
Besides, i still have my DK2 to cover me till then.

[ninsigma]

Oh I get that, I understand people being annoyed with that. My quarrel is with the wording in the article saying it was initially announced, which isn't true. But yeah I get why people would be upset that he said it was one price then announced to be higher. That was just bad pr on his part.

I'm hoping to get psvr this year as well. I'll probably pick up the rift later on as well and yeah I'll wait for a controllerless skull too. I already have standard and elite xb1 con trolleys and proper gaming keyboard and mouse. Don't need anymore lol

[Neonridr]

you mean until they drop the bombshell price of PSVR and people around here realize it isn't as cheap as they were expecting.. ;)

As for a Non-Xbox owner, I must say. I just went out and bought an xbox one controller to use on my pc.

Absolutely love the controller. This coming from someone who uses a DS4 at least an hour a night.

Really happy with the build quality, and if this is the sort of controller you can expect for the Rift, then that's a great bonus.

[WholesGame]

Thank you for a good comment. It's true that Oculus can set the price for their product whatever they think is right. They base this on the costs and many other factors. The point here is that many potential customers earlier got an impression that the price would be in the $300 range. You can have a look for example what Iribe said about this some time ago: http://www.forbes.com/sites...
The issue is not why it will be priced at $600, the issue is that the pricing strategy initially may be was not quite well thought of and well communicated to potential customers.

[ninsigma]

The issue that I agree on is that Palmer came out and and said it could cost around 350. It's sucky and he really shouldn't have said anything about the cost until it was officially announced.
I agree it definitely wasn't well communicated but I disagree that it wasn't well thought out. Considering it needs such high PC specs to run it well, I see it as a high end device and which generally comes with a high price tag and is marketed to enthusiasts. I think it's a good strategy. Let those who cannot do without the latest tech and can afford it, jump on board at the start to gain their profits and a userbase and this will in the future cause the price to go down. Mainly people are disappointed that it's priced out of their range and I get that.

[2cents]

Well said.

I wish to own an Oculus, however I think I will wait for the inevitable bundle with the newly designed controllers, possibly late this year or early next.

I didn't Hulk at the launch price but I am dissatisfied by the lack of purchasing options. Had they allowed me to purchase just the Oculus I would have already and picked up the controllers upon release.

Now I will wait... :(

[ninsigma]

Yeah different SKUs would have been nice. Not having options is kind of a bummer.

[spektical]

except the problem is its not a high end device. its being sold as one though.

[Apollosupreme]

Very few tech gadgets have responded from slow starts due to price. Two prominent examples of rebounds are the PS3 and the 3DS. In both case they had to relent and slash the price, "take a hit", to win gamers over.

Because this company is so young and unknown. Because the tech is "new" and gamers can't truly understand what they're missing out on it all makes for a very bad launch by my forecast.

[SniperControl]

Totally agree, i think they have lost thousands of potential sales within the first year to either PSVR or the Hive.
I was one of those potential customers and have opted to get a PSVR instead, Sony and Valve/HTC will look at that £500/$600 Rift price and will surely undercut it.

I think it was a bad move by Oculus confounded by bad PR.

[uth11]

This is a new category of gadget though so the same rules don't necessarily apply. Like the PC & Mac launched for thousands and thousands of dollars originally, but did just fine. It was a new category of device. Now if someone came along after and tried to launch a completely new computer for the same high price, they'd fail, because the market's been established, and people would need a good reason to pay a much higher price for a new device that does the same thing.

[Apollosupreme]

PC and Mac were used to make offices vastly more efficient. Completely different from this, a toy.

Devs will flock to the largest install base because there is the platform for facilitating the most sales, most earnings.

Small install base means poor Dev support which means a poor game lineup which means even poorer sales...

[uth11]

@Apollo - then look at videogame consoles. If you adjust the ealry videogame consoles for inflation, they cost as much or more than a Rift. The early consoles could get away with suh prices. Later consoles with similar high prices like the 3DO failed or PS3 struggled because consumers had other options they bought instead.

[rockingchairdad]

First of off I am a big xbox fan, but I will be picking up a ps4 and a psvr when it comes out. Would love to get oculus, but my computer is not up to it. I am hoping the psvr will come with a game and or controllers.

[kenwonobi]

If I had a pc to run the Rift I think I would go that way too. I have a PS4 so I'm going the PSVR path. The Rift looks exciting to me. It's not so much the rig itself I can't afford. It's the hassle of getting the Rift and the computer to run it.

[Neonridr]

I can't really understand the negative stigma regarding the bundle price for the Rift. That price gets you everything (minus the PC) to get Rift up and working.

Just like the PSVR will need a certain number of accessories to get it up and running.

[uth11]

Easy- There's a large number of gamers that believe everything is overpriced. I see it everyday.

[generic-user-name]

"PSVR will need a certain number of accessories to get it up and running."

Citation needed.

[Neonridr]

so are we saying I need proof that the PSVR needs the PS Camera even though we've seen it demonstrated?

[uth11]

It will need a camera, and headphones for certain. Move controllers may not be required, but they look like they'll be nice to have for some games

[Jurat]

I didn't hesitate; got my pre-order in nice and quick and will be amongst the first to receive the CV1 in March/April.
The DK2 has given me immersive gaming experiences I never thought possible.
I've piloted starships across the Milky Way. I've driven 18-wheelers the length and breadth of Europe. I've enjoyed all my old Sega/Nintendo retro emulations in the comfort of my own retro arcade, faithfully recreated on a CRT TV, whilst playing old mixtapes from my childhood. And when I don't even want to play games, I can watch all my favourite movies and TV Programmes in the comfort and privacy of my own 4D cinema.
I can't put a price on these experiences. They're evergreen - they will never get old - and I will not let $$$ sour the excitement I continue to feel for the future of this groundbreaking technology.
/Rant over.

[Neonridr]

Dude I am on the same train as you. Full speed ahead to Rift Town.

My preorder shows April, so fingers crossed there are no delays.

You are at least lucky enough to have experienced stuff via the DK2. I have no experience at all with the Rift minus the videos and let's plays I have seen with it.

I cannot wait for the first time I put it on and boot up EVE Valkyrie.

[Jurat]

The DK2 still has the power to bring a tear to my eye when playing Elite Dangerous; some of the sights you see are mesmerizing - the experience will surely be heightened on CV1.

Eve Valkyrie will no doubt have a similar effect. You will love every second, I guarantee it.

[iNFAMOUZ1]

im in march too, i emailed support, they confirmed im still there, cant wait!!!! although ive lowered my interest in it, since its still a ways off, but im enjoying my gear alot till then

[Neonridr]

still a ways off? March is in a month.

[kenwonobi]

From what I'm hearing it's a success. I done remember any official price announced before it was set at 599. I'm pretty sure if a video game enthusiast like I am didn't know the public at large didn't know either.