For the second time in four months, Facebook-owned Oculus is slashing the price of its high-end Rift and Touch virtual reality system bundle by $200.
In March, Oculus cut the price of a Rift and Touch controllers combo from $798 to $598. At the time, Vice President of Content Jason Rubin said that the lower cost was “required for people to get PC VR to take off.”
Now, as part of a seasonal sale on VR content–the “Summer of Rift“–Oculus is once again bidding to boost the size of its user base by dropping the cost of a Rift/Touch combo to $398, $100 lower than a less-powerful Sony PlayStation VR, and $400 less than HTC’s Vive. The sale officially lasts for six weeks, starting today, though in a new interview, Rubin wouldn’t definitively confirm to Fast Company whether the price would go back up at the end of the promotion.
It’s an open question whether the price drop will indeed attract hordes of new users.
“The summertime is a traditional slow season for a lot of retailers, so I’m not surprised to see sales and promotions this time of year,” says Gartner analyst Brian Blau, “to make sure people have an opportunity to get a good deal” on something they may have been wanting to buy.
Adds Blau, “Does it change the situation for VR overall? I don’t think so. I think it’s just a sale.”
But to Rubin, the idea is to leverage the maturity of the Rift content library, which now has 500 total titles, 200 of which are geared for the Touch. It’s at “the point where there’s something for everybody, and multiple things for everybody,” he says.
In short, Rubin is saying, while high-end VR systems like the Rift, the Vive, and the PlayStation VR have seen modest growth since hitting the market last year, a big part of that has been the dearth of content. “In the first year, people said, you don’t have millions of units, [so] isn’t that a failure?” Rubin says. “The opposite is true. If millions had bought the hardware, the content library wouldn’t have been there, and the [machines] would have ended up in closets.”
Earlier this year, a report from SuperData Research suggested that Oculus had sold around 300,000 Rifts, while HTC had moved around half a million Vives. Yet data last month from VRFLG.net found that only about 1% of Vive owners were using their systems. There isn’t much to suggest that usage among Rift owners is significantly higher, though Rubin argued that “usage numbers are very strong for us.” Still, it’s likely that many VR systems, including Rifts, have ended up closets, despite growing libraries.
In spite of all that, some analysts predict that VR will be a $38 billion industry by 2026.
By selling the Rift and Touch for $398, Oculus is clearly hoping to bring in a slew of new users–and, of course, sell them lots of content in the coming months and years. While it’s not known how much it costs to produce the Rift, it’s likely that at $398, the Rift/Touch bundle is seen internally as a loss leader. Asked about that, Rubin says that making money on hardware has never been the goal of Oculus, and by extension, Facebook.
“The goal is the ecosystem,” Rubin says, “and we have to make investment to get there. I can say that this is fully in line with our goals and our long-term strategy.”
That, of course, makes sense for Facebook, which makes most of its money from advertising, and whose business is built almost entirely on software.
In the meantime, even as Oculus has returned to the idea that by lowering the cost of the Rift it can kickstart its ecosystem, Blau noted that the company has frequently tried to caution observers about the growth of VR. “Zuckerberg and Oculus have said repeatedly that it’s going to take years to build the ecosystem,” Blau says, “and they continue to repeat that theme.”
Even with the new price drop, Oculus certainly isn’t expecting millions of people to suddenly buy Rifts. But it thinks that those who do take one home will be pleased with all they can do with their new system. That’s why Oculus is pushing the growth of its library, and Rubin argued that it’s now big enough that it has both the kind of high-quality games that can attract, and keep, hard-core VR enthusiasts, as well as the kinds of more niche titles that will appeal to casual users.
The hope is that by bringing in a significant number of new users this summer, Oculus can boost the size of the content-buying user base, and give developers even more motivation to build new VR content for the Rift. Already, Rubin argued, anecdotal evidence suggests that users are more excited about titles coming out for the Rift than for other platforms–and as a result, “higher quality content comes out more frequently.”
To Blau, though, it’s about the need for quality titles. “It’s not about the number of titles,” he says. “It’s about the number of great titles,” not to mention the fact that the often hefty cost of Rift-compatible PCs and the need for a room with lots of open space can be impediments to adoption of high-end VR.
For his part, Rubin characterized the temporary $200 price drop as “experimenting, and seeing what happens, and we’ll have to decide what to do going forward. Our goal is to bring a large group of new users into the ecosystem” and see if the broad content library keeps them around.
Asked if he was saying that the price might stay at $398 after six weeks, Rubin demurred. “I’m not ruling anything out,” he says. “But I don’t want to encourage people to think it won’t go [back] up.”