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Oculus Rift Could Have Subsidized Cost, Maybe Free

By - Source: Edge Magazine | B 22 comments

Edge Magazine reports that Oculus VR is hoping that the Oculus Rift headset will offered free at the point of purchase if the company finds the correct business model. Oculus VR CEO Brandan Iribe revealed this interesting tidbit of news during the Develop In Brighton 2013 event last week as the team was showcasing a new Oculus Rift HD prototype.

“The lower the price point, the wider the audience,” Iribe told the magazine. “We have all kinds of fantasy ideas. We’d love it to be free one day, so how do we get it as close to free as possible? Obviously it won’t be that in the beginning. We’re targeting the $300 price point right now but there’s the potential that it could get much less expensive with a few different relationships and strategies."

One of those strategies could be a subsidized structure where customers would pay a small fee up front and make payments on the device over the course of one or two years. That would help offset the total cost for customers who can't afford $300 up front. It would also mean a wider audience for Oculus VR and the developers supporting the Rift specs.

"You can imagine if Microsoft and Sony can go out and subsidize consoles because there’s enough money to be made on software and other areas, then there’s the potential that this, in partnership, could get subsidized," he said. "Let’s say there was some game you played in VR that everybody loved and everybody played and we made $100 a month – or even $10 a month – at some point the hardware’s cheap enough and we’re making enough that we could be giving away the headset."

Right now the Oculus Rift is only available as a $300 dev kit, and so far it's unclear how the VR headset will be offered to consumers when it launches next year. That means the team still has plenty of time to toss around ideas on how to get Rift into the hands of as many gamers as possible.

"We’re not there yet, but we’re sitting there thinking all the time, how can we make this free? You want everybody to play it and the cheaper it is, the more people are going to go out and buy it," he said.

Free is good, but the $300 price tag is worth every penny in my book.

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  • 3 Hide
    icemunk , July 17, 2013 4:09 AM
    $300 is affordable, but I the idea of pay per month, or free would bring a huge audience, especially if they can get some awesome content to go along with it. Bring on the HD retail version and you'll have my $300.
  • 2 Hide
    Someone Somewhere , July 17, 2013 4:25 AM
    Maybe do a deal with some stores along the lines of 'buy 5 games and we give you one'?
  • 2 Hide
    Spencer Castillo , July 17, 2013 5:51 AM
    "You want everybody to play it and the cheaper it is, the more people are going to go out and buy it,"

    I wish microsoft and sony are like this
  • 0 Hide
    everygamer , July 17, 2013 7:43 AM
    I would say worry less about a subsidized model, just keep working on the technology to the point that it gets mass produced. This will drive the cost down. If they then can get Microsoft or Sony or both to support the device on console's it will open it up as a peripheral to a much larger audience.

    I think the end goal should be the widest platform support, this will drive up the size of audience and then bring down cost. If the Rift 10 years from now is a $50 peripheral for PC's and Consoles it will be cheep enough to be a mass market product.
  • 1 Hide
    everygamer , July 17, 2013 7:47 AM
    "Maybe do a deal with some stores along the lines of 'buy 5 games and we give you one'?" the margin on 5 games is not going to be enough to cover the cost of the hardware for a retail Rift.

    When they say subsidize, it means that someone else is paying for the Rift. For a model like that to work, the Rift has to generate sales somewhere else to off set that cost.

    Sony lost $1 billon a year when the PS3 was released to reduce its cost, because they knew in the long run it would help them win the HD format war (blueray vs HD DVD) and they would make that money back later in hardware licensing and media sales.
  • 0 Hide
    internetlad , July 17, 2013 7:58 AM
    collect 100 game UPCs and we'll send you one for free lol
  • 0 Hide
    whiteodian , July 17, 2013 8:15 AM
    $300 is very reasonable considering Sony is charging more than double that for their head mounted display. I drove about 70 miles to demo the Sony head mounted display and decided it was not worth the money they were asking. It was difficult to track what was going on during the game (I played Sonic the hedgehog). Movies looked ok. I would definitely want to demo the Oculus prior to plunking down the money.
  • 0 Hide
    SirGCal , July 17, 2013 8:19 AM
    The windows version of Kinetic 2 is reported to be $400, so the much more useful IMHO Rift for $300 is a deal and one I'd jump on. Bring it! The Rift is unique and IMHO, does it right.

    Still wish it was faster refresh that it was but overall going to be sweet for the masses and I'll use it till my migraine triggers. (I have visual sensitivities and migraines at 60Hz after 30-40 minutes, special setups of 120Hz or more to prevent it. IF they did that, I'd do $300, even at their current lower resolution, without question, no problem.).
  • 0 Hide
    Adam Freeman , July 17, 2013 8:32 AM
    This is PC gaming not some stupid cell phone company shit, pay to play is dead on PC why do it with equipment also? $300 dollars for good kit on a computer is nothing.
  • -2 Hide
    loosescrews , July 17, 2013 8:33 AM
    Those who can't afford the whole cost up front can put it on their credit card. Subsidies just drive the total cost of ownership up for everyone (see cell phone plans.)
  • 0 Hide
    teh_chem , July 17, 2013 8:45 AM
    The logical break in this is when analyzing how subsidy works for Sony/Microsoft on their consoles; Sony and Microsoft have revenue streams beyond their hardware (game ecosystems), so they can afford to sell it at prices where the profit margin on the device isn't high. But the Oculus Rift doesn't have that model (yet?). They only have their hardware; unless they get in good bed with Sony and/or Microsoft (or game developer/studios). But if I were Sony or Microsoft (or other), it would be a tough argument to adopt that sort of relationship with the OR. It doesn't bring them much of an advantage.
  • 0 Hide
    Vorador2 , July 17, 2013 9:16 AM
    Affordable is always very interesting, but it's even more interesting to actually release it. How about giving a release date and final specs.

    I really really want to get my grubby little hands on this.
  • 0 Hide
    dennisburke , July 17, 2013 11:54 AM
    I'm interested in the Rift as an accessory to my PC. If Logitech can charge hundreds of dollars for some of their gear, $300 seems like a reasonable price, considering all the technology involved.

    This is a work in progress, but I think the focus should be on size and weight, more so than price.
  • 0 Hide
    __-_-_-__ , July 17, 2013 2:44 PM
    jailbrake in 3...2...1...
  • 0 Hide
    nevilence , July 17, 2013 2:49 PM
    Quote:
    Those who can't afford the whole cost up front can put it on their credit card. Subsidies just drive the total cost of ownership up for everyone (see cell phone plans.)


    If someone cant afford the 300 bucks the stupidest thing to do is stick it on a credit card, the final cost will be much more than just $300. Silly idea
  • 0 Hide
    loosescrews , July 17, 2013 3:54 PM
    Quote:

    If someone cant afford the 300 bucks the stupidest thing to do is stick it on a credit card, the final cost will be much more than just $300. Silly idea


    I completely agree. The problem is that there is one thing even stupider. Getting financing from the person selling you the item. Do the calculations. You think 20% interest from the credit card company is bad? Seller supplied financing is often much worse.

    The problem is not just the insane interest. The problem is that often times when enough customers take the financing all customers pay for it whether they pay full price or not. My example was cell phone plans. for example, Verizon charges all post-pay customers for financing (through inflated rates) whether they buy a subsidized phone or not. This drives the total cost of ownership up for all customers. Yes, prepaid options exist, but because carriers make less money on prepaid so they discourage it through a variety of means.

    Another example is ink jet printers. Most manufacturer's sell the printer near or below cost. They then make the money back in ink. There is not usually a good way to pay full price for the printer and then pay less for ink (without going to a different technology such as laser printing.) This drives the total cost of ownership up for all customers. Yes, you can buy remanufactured ink cartages or refill your own, but there are other draw backs to both of these options.

    In other words, I don't think it is the place of the seller or manufacturer to offer financing. Let a separate financing company do that. Those who can't get their act together to save most likely won't look for a good low interest loan. That is why I mentioned credit cards. They are even easier than seller supplied financing.
  • 0 Hide
    nevilence , July 17, 2013 4:42 PM
    fair call good sir
  • 0 Hide
    Someone Somewhere , July 17, 2013 9:40 PM
    Quote:
    jailbrake in 3...2...1...


    Jailbreak what?
  • 0 Hide
    cats_Paw , July 18, 2013 3:38 AM
    300 Bucks is ok as longa s you dont inflate the price overseas. This is a huge problem for me as everytime i want to buy something from USA, I have to pay aroun 28% more.

    Now... 300 dollars is not a toy for kids, but then again, this is not a toy anymore.
    If its 50% as good as the creators and game devs claim it is, Im getting it even if i have to save up cash for 6 months.

    Id say that If the product is very good, price comes secondary, becosue you either can afford it or you cant (taking all options into this).
  • 0 Hide
    cypeq , July 29, 2013 2:41 AM
    You get 0$ from me if you don't provide software wrapper allowing this to play old games. Like morrowind, fallout 3, and fokin ultima underworld ;p
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