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Focal Point: Will Oculus’ Price Cut Win Over Consumers?

Focal Point: Will Oculus’ Price Cut Win Over Consumers?

We ask our industry panel - the brightest and sharpest VR professionals from around the world - one question about the VR industry, business, technology or trending stories every week.

 

 

Question: Oculus Rift and Touch bundles had another $200 price cut last week as part of the Summer of Rift promotion. Affordability has long been cited as one of the main barriers to entry for consumers, along with a lack of AAA content. Do you think this lower price point will tempt new buyers while the VR library still fills out?

 

The discount does not address the need to educate new users.
Tanya Laird

Tanya Laird, Founder & CEO at Digital Jam 

“Whilst there will no doubt be an uplift in sales due to the price reductions, this doesn’t address the less knowledgeable audience that still requires more tentpole, less core game-centric content to truly draw them in.

“The complexity of setting up is still a step too far for a large portion of the non-gamer based audience. Will this draw new customers? Yes, but they’ll still be hardcore enthusiasts and early adopters who understand the landscape of the technology.

“The offers from Oculus are still very much targeted at those in the know. For those not experienced with the technology or gaming, there is a knowledge gap when it comes to the other peripherals required, namely a strong enough PC rig to power the HMD (or a basic understanding of graphic cards needed to deliver a plausible experience).

“Unlike Sony with the PS VR, which doesn’t require any in-depth understanding of peripheral requirements or additional platforms to acquire content, the discount does not address the need to educate new users.”

Oculus' price drop may close the gap to PS VR, but there's still a shortfall in user education when compared to the console's ease of use (above).
 


The PC games market is huge and VR is only taking a small sashimi slice right now; it needs to grow.
Brynley Gibson

Brynley Gibson, Head of Studios at Curve Digital 

“Oculus needed to do something to reach out to consumers as unfortunately, they fell in the murky middle between the ‘cheap’ and easy to use PS VR and the arguably best-in-class Vive.

“This price point is extremely competitive and I'm sure will help them persuade PC gamers who are on the fence. This is not a broader audience buying into VR - this is still core, PC gamers. The PC games market is huge and VR is only taking a small sashimi slice right now; it needs to grow. Along with that price and the excellent touch controllers, the games catalogue is looking healthy with a clutch of must-play experiences that I believe will help push undecided PC gamers over the line.

“Oculus have been faltering on sales with their rivals continuing to grow, so it’s a smart move for long-term gain. Yes, it will be a further loss to swallow for Oculus, but I don't see any of the hardware providers making huge profits from their hardware. My gut feel says that for all parties, these headsets are loss leaders - or near to it - that allows them to gain market share. In the future, as the manufacturing costs come down and the user-base grows, then they can begin to focus on profit from the hardware. Buying people into your ecosystem early on is a price worth paying if you can keep them there.

“We still have a challenge to get core gamers to play VR, let alone the wider public, so it’s vital that all the platform holders continue to aggressively support the growth of headset adoption and the supporting of fresh killer software to go with it. This move helps everyone into VR, not just Oculus.”

 


It looks like a move to boost  adoption numbers artificially and keep relevance.
Thomas Bidaux

Thomas Bidaux, CEO at ICO Partners 

“A temporary price drop is probably a more efficient way to discount the Rift than a permanent price drop to push for new adopters. It also allows them to keep the official price point higher, keeping it anchored high enough that any new devices will be compared favourably when released.

“It looks like a move from Oculus to boost its adoption numbers artificially and keep its overall relevance, while not sabotaging its future moves on the market. The current trends make me suspect the day-to-day sales number are not very impressive, and a one-off offering is what they need. Hopefully, they’ll have major announcements ready in October during Oculus Connect 4.”

A temporary price drop is a more efficient way to discount the Rift.
 

Oculus is a brand with a scarred legacy and the pioneers aren't always the ones who win.
Albert Millis

Albert Millis, MD at Virtual Umbrella 

“I’m seeing a large number of new people joining the Oculus Rift forums and groups on Facebook; many of them new users looking for advice and support on what games to buy. This suggests the price drop has enticed new users, but it seems like the Oculus store isn't providing enough guidance or calls to action on what games the users should be purchasing. It's no surprise people think there is a lack of content - when in reality, there’s a pretty large amount.

“I think Facebook has actioned this price cut for a number of reasons; they're confident in the pipeline of games and content coming out and they know that other companies aren't willing to sell at a loss. The Rift and Touch will become a single product offering following the Summer of Rift sale, so it might have been a strategy to help shift the older stock.

“Additionally, I've seen direct ads to buy the Rift/Touch bundle on my Facebook timeline, so it looks like they're beginning to get the advertising ball rolling, which will be a very powerful tool for future sales and brand awareness.

“Oculus is a brand with quite a scarred legacy and the pioneers aren't always the ones who win. I think integrating Rift into the Facebook brand will help to solidify consumer confidence.”

 


The first wave of early adopters spoke last year, with HTC taking the crown, but year one was just the first battle.
Jonathan Wagstaff

Jonathan Wagstaff, Group Business Intelligence Manager at Exertis 

“The promotion has been very successful so far. Brendan Iribe [CEO of Oculus VR] announced recently that the bundle is nearly sold out; even if stock dries up, Oculus have said they will keep the price-point for their new bundle.

“We’re still a ways off the golden mass adoption price-point of $200 that Bloomberg tell us is coming next year, but there’s a cross-section of enthusiast gamers who have been coveting a high-end VR headset but were holding out for a promotion like this one.

“The first wave of early adopters spoke last year, with HTC taking the crown, but year one was just the first battle. HTC had a huge advantage of being the only VR headset sold on the Steam platform, and PS VR had the benefit of a much larger install base and a more affordable package. Once you factor in the controllers and PS camera, the Rift is now cheaper and higher spec.

“Looking ahead at the long-term, this reinforces my bet on Oculus going the distance, thanks to Facebook’s cash reserves. There’s also a decent set of established titles now compared to the same time last year – I just love Star Trek: Bridge Crew – and ultimately, this is great news for the consumer.”

There are a lot more established titles such as Star Trek: Bridge Crew now, compared to last year.

Editor

Steve is an award-winning editor and copywriter with 20 years’ experience specialising in consumer technology and video games. He was part of a BAFTA nominated developer studio as project manager for the UK’s first fully interactive digital TV channel. In addition to editing TheVirtualReport.biz, Steve contributes to PocketGamer.biz, PCGamesInsider.biz and BlockchainGamer.biz, as well as creating marketing content for a range of SMEs and agencies.

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