VR Gets Real As The Rift Divides

Illustration credit: Taylor Reeh

Yesterday, Oculus Rift consumer model preorders opened up for $599. The highly anticipated virtual reality package includes the headset, a sensor, cables, a remote, an Xbox One controller, and two bundled games (Lucky’s Tale, a third-person character platformer, and EVE: Valkyrie, a space cockpit shooting game). Oculus presumes you own a high-end PC that can run the Rift. In terms of specifications, they are lofty requirements to say the least (a high-end graphics card and 4 USB ports, on top of a middle-to-high-end processor).

Helpfully, Oculus is also selling “Oculus-ready” PCs for $1,500, which is only a little more than you might spend building a custom PC equipped to handle VR. The Oculus Touch “half moon” controllers are sold separately and won’t be available until sometime later this year.

The price is, admittedly, both high and low for breakthrough technology. For your average game-buying consumer, $599 plus the building-a-worthy PC cost of admission is a price point higher than buying a current generation gaming console, or possibly all three major consoles all together.

Oculus Rift's Touch Controllers are not available on day One. Image Credit: Oculus

Oculus Rift's Touch Controllers are not available on day One. Image Credit: Oculus

For high-end hobbyists interested in the future of VR, demand is high but early adoption is cheap compared to new technology expectations. For context, a midling 4K HDTV sells for around $1,000 despite a lack of primetime 4K content. Since Rift is the first commercially available VR hardware, there is no competitive pricing in the market right now.

It's rumored that Oculus is selling these headsets “at cost” meaning the price only covers the cost of manufacturing, with little-to-no profit for Oculus. However, it's also important to note that Kickstarter backers are also getting the first version of the Rift for free as a reward for backing Oculus in the first place 3 years ago, a cost the company is probably subsidizing with new sales.

Lucky’s Tale is 1 of 2 games coming with a pre-order of the Oculus Rift. While a number of games are promising VR support, no one is certain which ones will be available when these headsets are shipped. Photo Courtesy VRBites.com

Lucky’s Tale is 1 of 2 games coming with a pre-order of the Oculus Rift. While a number of games are promising VR support, no one is certain which ones will be available when these headsets are shipped. Photo Courtesy VRBites.com

As for Rift's upcoming competition, a lot is unknown about hardware pricing. We do know a few details. Playstation VR will require both a PS4 console and a headset. Valve and HTC's Vive will have similar high computing requirements to the Rift and require you to have a room big enough to accommodate walking movement while using it.

A rift, if you will, between two futures of gaming is forming: one for those with VR and one for those without. Investors in VR are hoping most players will fall into the have-VR group:


"Following a combined [$6.1 billion] in investment in the sector over the last three years, investors are eager to see some initial proof of concept, hoping that consumers will quickly take to the new technology."

-SuperData Research Report, 1/6/16

IMAGE CREDIT: SuperDataResearch.com

IMAGE CREDIT: SuperDataResearch.com


Research firm SuperData Research also predicts the VR industry will generate $5.1 billion this year alone with approximately 38.9 million customers as an install base.

The have-nots will be stuck in our “old” world of home consoles and games, DLC, free-to-play schemes, eSports, and season passes, the market of which seems to be more tenuous every day. Sony has sold 35.9 million PS4s to date and Nintendo has sold somewhere above 10 million WiiUs. Microsoft won’t share their current Xbox One sales numbers, but there are about 39 million Xbox Live users.

These numbers dwarf how well home consoles have done worldwide in previous generations. The 360/PS3/Wii generation of consoles sold approximately 270 million consoles combined worldwide. The Xbox/PS2/Gamecube generation sold about 215 million consoles. Prior to that, consoles sold about 150 million worldwide.

Notably, Steam made $3.5 billion last year in sales just on paid downloadable games, but it is uncertain whether Valve’s VR positioning will help or hurt the overall PC game market.

This recent sales history also ignores gaming’s last dabble with VR in the 1990s. The most famous example of which was Nintendo’s Virtual Boy, which sold a paltry 350,000 in 1995 before Nintendo deemed it a failure. Since then, a number of VR-like experiences and peripherals have been sold, none of which have captured the fervor VR commands today. That much was obvious by Oculus' extremely successful Kickstarter campaign and Facebook's buyout.

For his part, Oculus founder and inventor Palmer Luckey is keenly aware of the two audiences his product he's trying to appeal to:

Palmer Luckey, Oculus founder, is hoping the Rift will sell both to the high-end and regular consumer of games. Image Credit: Wikipedia

Palmer Luckey, Oculus founder, is hoping the Rift will sell both to the high-end and regular consumer of games. Image Credit: Wikipedia

Proponents and critics of VR alike will squabble over whether the economy of VR can sustain itself, but developers are already experimenting with the costly medium. Epic Games founder and chief executive Tim Sweeney said the hardest part for VR game designers wasn’t funding, but creating a compelling user experience with realism:


IMAGE CREDIT: Geek.Com

IMAGE CREDIT: Geek.Com

“When you’re looking at a computer screen, you have a high tolerance for cartoony artwork. But when you’re in it, it just feels wrong.”

Tim Sweeny, NY Times interview, 11/19/15


At the level of investment spent on it, VR technology will need to get past its artificiality to succeed. However, there will also be a large audience that's emotionally invested in VR's success. It may have been responsible for its pre-release hype, but some can’t afford to play these games. That’s troubling for products purported to be advancing video games. Giant Bomb editor Austin Walker summarized this sentiment in his reaction to the pricing:

For all the money pumped in to VR compared to traditional platforms, the promise of better gaming experiences is worth clamoring for. However, its economic impact on the medium and the wealth dividing its potential customer base is worth re-evaluating. Is leaving behind the larger part of the gaming audience worth the cost of progress?