Price of Oculus Rift will be reduced for second time this year amid stiff competition
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This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (July 11, 2017).
Facebook Inc. for the second time in 2017 is slashing the price of its Oculus Rift to jump-start sales after a rocky first year for the virtual-reality device.
For the next six weeks, Facebook's Oculus VR unit will charge $399 for the Rift, Touch motion controllers and some games. Previously, Oculus sold that bundle for $598, itself a $200 discount from their combined launch prices.
The new, temporarily lowered bundle price doesn't account for the cost of buying a computer powerful enough to support the Rift. It does, though, put the price of owning the high-end headset on par with its toughest competitor, Sony Corp.'s PlayStation VR. That headset requires gamers to also buy a PlayStation 4 console, which runs anywhere from $249 to $399.
The average number of Rift headsets sold each week went up after the first price cut, said Jason Rubin, head of content at Oculus. He said the company is lowering the price again to capitalize on a significant increase in recent months of the number of games and apps for the device. There are more than 700 today, up from roughly 400 in March.
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"Now is the time to be pushing consumers into the product because they'll find exciting things to do," he said.
The latest price cut comes as Oculus, which Facebook bought for more than $2 billion in 2014, faces mounting competition from HTC Corp. and Sony. Sales of headsets powered by smartphones have far outsold heavier-duty devices such as the Rift. And Oculus also has grappled with internal problems, resulting in the departure of co-founder Palmer Luckey in late March.
Oculus hasn't disclosed sales for the Rift, but analysts say it continues to trail its rivals by a wide margin. Research firm IDC estimates the device has sold about 520,000 units world-wide to date, compared with 770,000 of HTC's Vive headsets and 1.6 million PlayStation VR headsets.
Facebook said it has provided more than $250 million in funding to developers to drive more content for the Rift. The social-media company said it plans to dole out $250 million more over an undisclosed period.
Virtual reality still doesn't have a breakout hit game or app, though, something analysts say is critical for broadening its appeal. Meanwhile, executives at large technology companies have shifted their focus in recent months to VR's cousin, augmented reality.
At Facebook's annual developer conference in April, Chief Executive Mark Zuckerberg said the company would make its augmented-reality tools available to third parties. It is also developing its own augmented-reality glasses.
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(END) Dow Jones Newswires
July 11, 2017 02:47 ET (06:47 GMT)