Bucks the usual trend of prices going down for hardware that is two years old and blames “rising costs.”
In the last two years, prices have gone up a lot for many types of consumer technology. This is because of a tight supply chain, a lack of chips, and other economic factors. But to be honest, we didn’t see this one coming.
Starting “in August,” the MSRP for the Meta Quest 2 virtual reality system (which used to be called Oculus Quest 2) will go up by a lot, from $299 for the base model to $399. This version has 128GB of storage built-in, while the Quest 2 headset with 256GB of storage will go from $399 to $499.
A $30 game for $100, and then Meta’s Tuesday announcement doesn’t explain why all of the hardware is going up $100. (33 percent for the base model, 25 percent for the higher-capacity version). If you make the announcement at face value, its simple statement may make sense: “It’s getting more expensive to make and ship our products.”
But in a traditional hardware release cycle, the two-year mark is when customers might expect the system to go on sale or get a streamlined update. The Quest 2 might have done that for the original Oculus Quest, which came out in 2019 for $399. Quest 2 is known for having big changes that were made to lower the price. The biggest change was that the system’s built-in screens went from OLED to LCD. Oculus, which was the name of the division at the time, also changed the head strap to make it feel more flimsy and took away a key “interpupillary distance” slider for the point where users’ eyes meet the screens.
Meta could have fixed these and other problems with the upcoming price change. The head strap would have been the easiest to fix since Meta already sells an “Elite” Quest 2 head strap.
But the announcement says that Meta is not working on any new hardware features or updates. Instead, the company just shrugs and says that anyone who buys the VR system between August 1 and December 31 will get the popular $30 rhythm-arcade game Beat Saber for free. This pack-in game offer is very different from the disaster Nintendo had in 2011 with the 3DS console and its outrageous $249 price. After a drastic price drop only a few months later, Nintendo gave early buyers a huge collection of 20 retro games as an apology.
Quest 2 headsets are still available at the MSRP of $299 at big-box stores like Best Buy and Amazon. This is different from other popular electronics that have failed because of things like chip shortages and fast sales. They can be bought right away and shipped as soon as today. You don’t have to wait in line or sign up for a service that only one store offers.
The news from today suggests that Meta’s plan to sell Quest 2 headsets for less than they cost to make—a strategy called “razors and blades” in the tech world and perfected by companies like Nintendo in the 1980s—might not be working. Look at the “Oculus for Business” program, which is still called “Oculus for Business” instead of “Meta for Business,” to get a better idea of how many quests 2 hardware might cost Meta without software license sales and Facebook account tie-ins. This business-only marketplace sells a 256GB version of the Quest 2 for $799. It has nothing to do with the Facebook ecosystem and has nothing to do with Facebook.
In an interesting twist, the same post that said hardware prices will go up in August also said that Meta is making a lot of money from both sales of its own software and licensing fees from third parties on the Quest 2 software platform. With “over $1 billion” spent on Meta Quest apps, it’s possible that Meta is making some of its money back on systems that have already been sold. Meta also keeps teasing new software based on popular licenses like Ghostbusters.
Cambria questions
Speaking of ways to make money with your Facebook account: They are going away the same month that the MSRP for Quest 2 is going up $100. After Oculus made it so that all Quest 2 VR headsets must be linked to a Facebook account by August 2020, Meta changed course earlier this month. From August on, the hardware will no longer need a Facebook account. Instead, it will need a Meta account, which may have its own problems, but at least it won’t have years of social media baggage. (It’s not clear if the Oculus for Business program will also keep going if it has nothing to do with the Meta login system.)
The price increase suggests that Meta may not be ready to release a follow-up VR system, especially the Project Cambria system that CEO Mark Zuckerberg teased at the same event where he said that Facebook would become part of a company called “Meta.” Since then, that VR system has been called a “premium” choice for VR, and rumors say it will cost more than the Quest 2’s MSRP.
This news comes just hours after Sony announced a few Quest-like features for its upcoming PlayStation VR2 system, which is set to come out in 2023 as an exclusive add-on for the PlayStation 5. Like Quest 2, PSVR2 will have a “passthrough” vision. This means that users can tap a shortcut button and look through the headset to see their surroundings, friends, and cats using the built-in cameras. The same set of PSVR2 cameras and sensors will be used to map users’ environments, just like on Quest 2. This will make it safer for users to stand up and move from side to side while on an adventure in VR.
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