Oculus Founder Palmer Luckey: 'We Don’t Make Money' on the $599 Rift

Facebook's first tech product earns its savvy spokesperson/sacrificial lamb.

On Wednesday, Oculus threw open the preorder gates for the Rift consumer version. Servers buckled under the weight of the demand, while the $599 price tag sparked fan backlash and I-told-you-so outcries aplenty. When the dust settled, Oculus founder Palmer Luckey explained what went down from his earnest tech-bro perspective.

During a Reddit AMA Wednesday evening, the young inventor owned up to opening his mouth too wide (if you’re interested, you should read the whole AMA here):

I handled the messaging poorly. Earlier last year, we started officially messaging that the Rift+Recommended spec PC would cost roughly $1,500. That was around the time we committed to the path of prioritizing quality over cost, trying to make the best VR headset possible with current technology.

The Oculus Rift


Luckey acknowledged what many people just don’t have a computer fast enough to power the Oculus Rift:

“The vast majority of consumers (and even gamers!) don’t have a PC anywhere close to the rec. spec, and many people were confused enough to think the Rift was a standalone device. For that vast majority of people, $1500 is the all-in cost of owning Rift. The biggest portion of their cost is the PC, not the Rift itself.”

Members of the media photograph the Rift headset in June.


He also recalled that sort of “infamous” “$350” quote:

“For gamers that already have high end GPUs, the equation is obviously different. In a September interview, during the Oculus Connect developer conference, I made the infamous “roughly in that $350 ballpark, but it will cost more than that” quote. As an explanation, not an excuse: during that time, many outlets were repeating the “Rift is $1500!” line, and I was frustrated by how many people thought that was the price of the headset itself. My answer was ill-prepared, and mentally, I was contrasting $349 with $1500, not our internal estimate that hovered close to $599 — that is why I said it was in roughly the same ballpark.”

Luckey also reiterated that the Oculus doesn’t make money on the Rift, and the extras really don’t add that much to the overall cost:

“To be perfectly clear, we don’t make money on the Rift. The Xbox controller costs us almost nothing to bundle, and people can easily resell it for profit. A lot of people wish we would sell a bundle without “useless extras” like high-end audio, a carrying case, the bundled games, etc, but those just don’t significantly impact the cost.”

The tech is what makes the Rift so expensive, Luckey writes:

“The core technology in the Rift is the main driver - two built-for-VR OLED displays with very high refresh rate and pixel density, a very precise tracking system, mechanical adjustment systems that must be lightweight, durable, and precise, and cutting-edge optics that are more complex to manufacture than many high end DSLR lenses.”

On Reddit, Luckey compares the cost of the Rift to phones and mid-range TVs (which is a little bit of a fiction, considering, as he points out above, the true cost to run Oculus VR is at least $1,500.) When it comes to the Touch and other Oculus products, he’s put a self-imposed (or PR-imposed) kibosh on ballparks: “I have learned my lesson.” He also admits that Rift-as-VR is “expensive” — though on Twitter he said the machine you’re getting for this price is “obscenely cheap.”

Perhaps, then, echoing the average fellow in Phantom Tollbooth who bills himself as simultaneously the fattest skinny man and the world’s tallest midget, what we’re left with is a perfectly ordinary introduction to a potentially revolutionary device.

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