The Impact of Oculus’ Summer of Rift Price Cut

Greenlight InsightsAnalysis, Virtual Reality

Oculus Rift

For the next six weeks, the price for an Oculus Rift with Oculus Touch controllers is $399. In this move, Oculus has made its headset cheaper than even its console rival, the Sony PSVR.

In terms of units shipped, the company's flagship product - the Oculus Rift - lags behind cheaper headsets like the Samsung Gear and Sony PSVR. This is largely due to two factors: price and installed base. Hard-pressed to combat the latter, Oculus has opted to engage the former, temporarily lowering the cost of its headset bundle to $399.

Essentially, the Oculus Rift and Touch bundle is now the cheapest high-end headset on the market. The PSVR is also $399, but this price does not include its PlayStation Move motion controllers (an additional $99). Nevertheless, Sony still holds the advantage. Over 60 million PS4 units have been sold, meaning there are over 60 million installed base users ready for a relatively cheap upgrade into VR.

The Oculus Rift still requires a high-end PC to operate. Even on the low end, consumers would expect to pay roughly $1,000 for a PC and Rift - $100 more than a PS4, PSVR, and PlayStation Move. This sale is not targeting those without a PC. Instead, Oculus' far more likely target is consumers who already own a high-end PC (or only need a minor upgrade) that can support VR. In this arena, the Rift and Touch bundle is now only half the cost of the HTC Vive ($799).

In the 2017 Virtual Reality Consumer Report, consumers listed price as the leading factor when considering purchasing a VR headset. The Oculus Rift is already a highly-reviewed HMD associated with quality VR content, so an improvement in entry cost will produce a noticeable sales difference.

Virtual Reality consumer data

Additionally, 22% of consumers feel that the ideal price point for at-home VR experiences is between $200 and $399, in comparison to only 9% of consumers indicating they'd be willing to pay a bit more at $400 to $599.

The Summer of Rift will bring a needed uptick in Oculus sales numbers. The company's largest obstacle comes from well-established competitors. With Google and HTC releasing an all-in-one headset later this year, Oculus needs to become more competitive or risk getting left behind. This price cut, though temporary, is a needed step in that direction.

Purchase the 2017 Virtual Reality Consumer Report for more insights on consumer attitude toward VR headsets, content, advertising and more.