Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.

Recs

0

Instant Analysis: How Will Facebook's Oculus Rift Price Cut Affect the Virtual Reality Market?

Facebook (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.

Oculus Rift headset with two Touch controllers

Image source: Oculus.

Does it matter?

Price cuts for the Rift and its supplementary hardware probably won't spur a sizable, sustained sales uptick, but they do point to a broader trend of virtual reality devices becoming less expensive this year. 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.

While HTC has stated that it has no plans for a Vive price cut, sales of the device have slowed dramatically since its April 2016 launch, and it's reasonable to expect that the company will reduce the cost of its VR hardware this year in response to new market dynamics.

Both the Rift and the Vive require powerful PCs to run, so price will remain a significant barrier to mainstream adoption of high-end virtual reality headsets even as prices fall this year. There's also a  shortage of standout software to drive sales of Facebook's and HTC's respective VR platforms, so low-cost headsets from Samsung and Alphabet and mid-range solutions like the Windows Holographic devices will likely continue to gain market share.

10 stocks we like better than Microsoft
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now...and Microsoft wasn't one of them! That's right -- they think these 10 stocks are even better buys.

Click here to learn about these picks!

*Stock Advisor returns as of February 6, 2017.


Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 4008555, ~/Articles/ArticleHandler.aspx, 3/25/2017 1:44:07 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 4 hours ago Sponsored by:
Change down DOW 20596.7 -59.9 -0.3%
Change down S&P 500 2344.0 -2.0 -0.1%
Change up NASD 5828.7 11.0 0.2%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

3/24/2017 4:00 PM
FB $140.34 Up +0.81 +0.58%
Facebook CAPS Rating: ***
HTCXF $21.84 Down +0.00 +0.00%
HTC CORPORATION CAPS Rating: No stars

Advertisement