philip lelyveld The world of entertainment technology


How Will Facebook’s Oculus Rift Price Cut Affect the Virtual Reality Market?

rift_largeFacebook (NASDAQ:FB) has implemented price reductions for its Oculus Rift virtual reality hardware, reducing the cost of the headset by $100 (now $499) and the bundle featuring the platform's Touch controllers by $200 (now $598). The price for separate Touch controllers has also been reduced from $199 to $99, and the cost for an additional Rift sensor has dropped from $79 to $59.

The markdowns come on the heels of disappointing sales for the platform, and are the first major price reductions for the high-end VR device. HTC's (NASDAQOTH:HTCXF) Vive platform, not itself a great success, has shipped somewhere in the neighborhood of 420,000 units, and reports suggest that the Vive (which is priced at $800 for the headset and controllers) has sold roughly twice as many units as the Rift. HTC has said that it does not see a need to cut the price of the Vive in response to the markdowns for Rift hardware.

Companies including Lenovo, HP, and Dell will be launching mid-range headsets for Microsoft's (NASDAQ: MSFT) Windows Holographic platform -- with prices starting in the $300 range. These products will be compatible with a wider range of PCs and are likely to put pressure on Facebook's and HTC's VR hardware offerings.

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