The $600 Oculus Rift, or How Not to Price Your Product

Caid Christiansen• January, 06 2016

Need a lesson in how not to price and promote your product? Look no further than Facebook’s Oculus Rift, a PC-powered virtual reality headset.

The Oculus Rift, which rose to popularity as a Kickstarter project in late 2012 under VR company Oculus, stepped closer to reality in March 2014 when Oculus was acquired by Facebook for $2 billion. Backers of the initial campaign were told they’d receive a developer’s kit of the Rift for pledges of $300 or more.

Despite doubts about pricing–VR headsets are an emerging technology, after all–Oculus continually insisted that “we want to stay in that $200-$400 price range.” All the while, developers continued publishing Oculus dev kits and spending time and money investing in developing games and apps for the platform.

Enter today: Oculus just began offering the Rift for pre-order at a pricepoint of $599.

That’s a far cry from the $200-$400 range Oculus insisted on over the last few years, and it’s come as a surprise to many would-be customers. If there’s any consolation here, it’s that backers of the initial Kickstarter project will be receiving a Rift for free.

As many analysts and would-be customers have noted, it’s not just the $600 pricepoint that’s so baffling about this move by Facebook–again, this is a new technology which is bound to be expensive for the first few years. So much marketing was put behind the inexpensive pricepoint of the Rift that most people couldn’t believe it would be any more than $400.

There’s more to pricing a product than just how much it costs, and there’s more to launching a product than just launching a website and opening up preorders. The pricing and launch process are full of research, backed (hopefully) by consumer opinions, and then worked through a marketing campaign to get people excited about launch. If all those elements don’t work together in harmony, it’s much harder to have a successful launch.

Having an expensive product isn’t an automatic disqualifier. Nor is bad marketing (although that’s harder to overcome). Put the two together and mix in a big price hike, though, and it’s easy to find yourself in the situation Oculus is in today.