Opinion: The Price of the Oculus Rift is Too Low (HTC Vive Might Be Just Right)

There's been a lot of debate over whether the first round of virtual reality headsets is priced too high for consumers, but Shacknews CEO Asif Khan is taking today to make the case for why the HTC Vive might be in just the right place, while Oculus Rift is slightly off.

105

Oculus Rift became available for preorders in January and the ensuing Internet kerfuffle about the price of the first generation Virtual Reality Head Mounted Displays deserves further analysis. I believe that Oculus Rift is priced too low.

I was able to get my hands on both VR HMD offerings from Oculus and HTC at CES in January, and I no longer believe that the Oculus Rift is better than the HTC Vive. I still believe that the Oculus Rift offers a fine experience, but I believe the HTC Vive will be a more premium virtual reality experience after giving an objective look at the features of both devices. HTC and Valve announced pricing for the Vive last weekend, and it came in lower than my expectation of $1000 or higher. I disagree with the many gamers and journalists who claim that the $799 price tag for the HTC Vive is absurdly high for a device that still requires a computer to run it.

I have provided 5 reasons that explain higher price points for first generation Virtual Reality Head Mounted Displays:

Virtual Reality Early Adopters

First generations of groundbreaking consumer electronics products tend to be priced at a premium. Why should VR HMDs be the exception to this rule? A Tesla Model S cost over $90,000 and the Tesla Roadster cost even more than that when it was released. Apple's original iPhone cost the same amount as the Oculus Rift, and that was after an AT&T subsidy. Innovative products need the support of early adopters to make sure the company will keep making new iterations. It is this tax on early adopters by a company that can help foster more innovation and risk taking in a product category.

The Cost of a Computer

I have yet to build my Virtual Reality desktop, but I will assure you it is not going to have the minimum specifications to run the Oculus Rift. Gamers love building hardcore PCs with liquid cooled CPUs and all sorts of high speed RAM and SSDs. None of this is cheap. PC hobbyists spend thousands of dollars building and upgrading their rigs. $600 could get you a pretty good video card, or an Oculus Rift. Both HMDs will cost more than a gaming console, but I believe it is more fair to compare their price to the cost of the higher end PCs required to run VR.

Full Room Experience

The small fraction of people who can dedicate a room in their home to Full Room Virtual Reality leads me to believe that this will be a much smaller market at first than it is being marketed. The best HTC Vive demos are done in a 10x10 foot square. What percentage of gamers can dedicate that kind of space to a device? This is just another reason why I think the VR HMDs should command a higher launch price. If you can afford and are willing to dedicate a room in your home to VR, you most likely are willing to pay a higher premium to be an early adopter of a VR HMD.

Head Mounted Display

I'm talking about a Head Mounted Display. Oculus Rift and HTC Vive are both head mounted displays, and I believe it is fair to compare them in price to other displays for PC. It costs between $500-$1500 to pick up a 4K resolution monitor, depending on features and size. Is $599 or $799 really that absurd of a price for a head mounted virtual reality display when other displays that just sit on your desk cost more?

If VR Fails This Time...

Virtual Reality failed miserably in the 1990s for a few reasons. The costs of the devices were prohibitive and the overall experience was very limited by technology at the time. We now haver much faster GPUs, computers and smartphones that can support a much more immersive VR experience with high quality graphics and low persistence screens. VR can not afford to fail again, and the premium attached to this launch cycle of these HMDs can increase the likelihood that there will at least be a next generation of this product category. Consumers of these early VR HMDs can help foster the future of VR much like the early adopters of Tesla vehicles have helped lay the groundwork for the future less expensive electric vehicles.

This article started with a claim that the Oculus Rift is priced too low. I believe that the lack of a front facing camera and less advanced sensors (two things that the HTC Vive feature) are deal breakers for many early adopters. Oculus had plenty of feedback and time to implement these features, but have instead focused on locking down exclusive software and experiences for the Rift. Oculus Rift felt like an antiquated device after experiencing the latest iteration of the HTC Vive at CES. I am not saying that I think the Oculus Rift is a bad device, but that the HTC Vive provides a more complete VR hardware solution at launch. Oculus won't be able to ship their next generation Oculus Touch controllers at launch, while the HTC Vive will have theirs included in the $799. We still don't know the price of Oculus touch, so this price comparison of $599 to $799 is not even apples to apples. Many Shackers have asked me which HMD I would recommend if they could only buy one virtual reality head mounted display. My answer is two fold. If you want the best hardware out of the box at launch, buy the HTC Vive. If you want the best software lineup at launch, buy the Oculus Rift. It is sad that Oculus didn't take a more serious look at the competition because this answer would have been Oculus Rift if they had added some of the key hardware features that come with the HTC Vive. Early adopters would gladly pay whatever increased price at launch if the Oculus Rift came with a front-facing camera and improved sensors. At the $599 price point, Oculus already priced out a large segment of consumers. The $799 price point of the HTC Vive with the Valve controllers is just not that much more expensive given the improved VR experience. Oculus has made a mistake in my opinion, but they still can redeem themselves by offering a robust software and content lineup. It remains to be seen how Valve will support HTC Vive on the software front, so Oculus may enjoy a lead at first on that front.

HTC Vive is available for presale on Monday February 29, and I will gladly pay the $200 premium to the Oculus Rift (which I have also preordered). This is a decision for consumers to make individually, and the companies have told me that there is no animosity. Oculus, HTC, and Valve all want VR to succeed. At the end of the day, many consumers can't afford to purchase both devices at launch and the decision will be a tough one. If you look at the hardware by itself, I feel that the HTC Vive is the better option.

CEO

Asif Khan is the CEO and majority shareholder of Shacknews. He began his career in video game journalism as a freelancer in 2001 for Tendobox.com. Asif is a CPA and was formerly an investment adviser representative. After much success in his own personal investments, he retired from his day job in financial services and is currently focused on new private investments. His favorite PC game of all time is Duke Nukem 3D, and he is an unapologetic fan of most things Nintendo. Asif first frequented the Shack when it was sCary's Shugashack to find all things Quake. When he is not immersed in investments or gaming he is a purveyor of fine electronic music. Asif also has an irrational love of Cleveland sports.

From The Chatty
    • reply
      February 26, 2016 1:06 PM

      Intriguing article, but I have many reasons to believe the opposite, and the mainstream trend will be to go downmarket, not up. I believe Facebook and Google's mainstreams interests with VR will lie in video for at least the foreseeable future, meaning that things like Gear VR are more apt for hardware rather than high end motion controls and optics. I have a feeling that the rumor about Google's headset being entirely self-powered without a phone or PC signals that their goal is the cheapest possible VR headset that plays Youtube VR videos well. It probably aligns better with each companies main business goals and strengths anyway

      • reply
        February 26, 2016 1:08 PM

        This was not about mobile VR, which yes is a fine affordable experience. This is about the high end VR experience, and HTC Vive has superior hardware.

        • reply
          February 26, 2016 1:18 PM

          I suppose I was trying to say that VR in general is probably going to become more about mobile VR, at least where Facebook and Google are concerned. The focus on video aligns much much better with their actual core business in the next few years, as well as making it possible to grow an actual mainstream audience. I don't believe that it is particularly material to Oculus whether it sells 25% more of a niche product that may have a poor software attach rate anyway. The analogy to Tesla is interesting, because I suppose VR similarly used upmarket products to create buzz in order to overcome an initial PR issue. But as it stands, there haven't been many viable use cases proven for a casual consumer to start using VR on a regular basis other than video, whereas there are clear reasons why Tesla can achieve downmarket success with a superior product if it could be sold/manufactured at a low cost.

          • reply
            February 26, 2016 1:30 PM

            There's probably another Tesla analogy here with the Model X. They went overboard creating high end features like the windshield and the gulf wing doors that probably did not move the needle because they were already capped by production limits anyway. The hubris that Elon Musk refers to that was shortsightedness in relation to their primary goal to become a mass market car company that ships millions of cars every year, not 50k. I freely admit that nobody knows exactly what will happen with VR, but pricing your niche product even higher while also claiming that your goal is mass market success is probably along the same kinds of hubris.

            • reply
              February 26, 2016 1:32 PM

              The Vive's front facing camera is a game changer. It shows more hubris to leave that out than to increase the price to include it, in my opinion.

              • reply
                February 26, 2016 1:37 PM

                Yeah I desperately want to believe! But I remain a skeptic. Because how is that going to increase the install base by an order of magnitude or solve the myriad of basic problems with locomotion or create mainstream use cases or solve the incredibly high hardware horsepower required?

                I think the front facing camera makes a lot more sense due to Vive's insistence on VR being a room-based thing. The Kinect already showed that people don't have that kind of room and aren't willing to make that kind of room simply for a new modality, and I haven't seen use cases that look like it will convince people otherwise yet

                • reply
                  February 26, 2016 1:54 PM

                  Unless technology drastically changes or a few smart developers find a few silver bullets, I suspect 10 years from now, we will look back on VR as a few things: Much like fake plastic guitars, motion control bowling, and dancing gamepads, it was a temporary moment in time where some people had some fun with niche peripherals to experience a bit of novelty that did not last. A more immersive way to view 360 degree videos that was compelling for a while, but never really became the norm, much like 3D movies are clearly here to stay and move the needle in revenue, but have never superceded 2D movies. I cannot say if form factors and technology can become good enough to make true AR displays the norm within 10 years from now, but I suspect this is all a stopgap until that can happen. We all thought the imminent revolution was immersive worlds, but it may turn out the only real revolution was just a different way to display screens to our eyes for the sake of watching videos and doing work. Maybe we all got excited when Facebook legitimized VR, but I suspect based on their exact words about this being "the next computing platform" that meant this is just how we'll move some of our daily computing work over to a new version of the HCI we already know

                  • reply
                    February 26, 2016 2:01 PM

                    Are you and TraptNSuit the same person

                    • reply
                      February 26, 2016 2:05 PM

                      I feel a kinship with anybody who values truly being accurate above sounding accurate. I find that very few people who comment on VR have actually worked on VR products or spent any amount of time thinking about the true implications of it as a technology and a business, beyond reading a few articles online. I don't begrudge them, but I also feel like the level of discourse surrounding technology topics is quite lax in its rigor.

              • reply
                February 26, 2016 3:22 PM

                The system by which the Oculus tracks is based largely on the use of a wide-angle camera to view the current position of the wearer and the headset. There is no need to integrate a camera directly into the headset because the camera is already part of the system.

                Putting the camera on the headset itself is necessary for the Vive because mobility is a key differentiation point between the products, but on the Oculus putting the camera on the headset wouldn't make sense. You would be adding parts and complexity to the head mounted rig and making accurate optical position tracking vastly more difficult.

                The same situational awareness and ghosting features included in the Vive are (and will be) available on the Oculus using the wide angle camera already integrated with the system.

                • reply
                  February 26, 2016 3:39 PM

                  you could do basic chaperone with oculus but the point of the passthrough is more to see your hands and the area immediately infront of you, I fail to see how oculus can duplicate that with the external camera

                  • reply
                    February 26, 2016 3:54 PM

                    The camera is in front of the wearer and can see everything in front of them. It is in a perpetual state of generating a combined image of the feed from the device and the wearer, allowing for the same kind of pass through as is possible for a user of the Vive. Since you always use the Oculus in full view of the camera there is no need for it to move with you.

                    • reply
                      February 26, 2016 3:59 PM

                      allowing for the same kind of pass through as is possible for a user of the Vive ... No, it can't. It's looking at at the player, so unless you want to just see yourself in third person... the whole idea of the Vive camera is pass-through, so it's like you're seeing through the headset. An external camera can't do that.

                    • reply
                      February 26, 2016 4:01 PM

                      Uhh no. That does not work. The best you could do is look at yourself from the perspective of the camera which is such a poor hack Oculus would be too embarrassed to ever implement it.

                      • reply
                        February 26, 2016 4:02 PM

                        The feature set is already implemented, i've used it. It creates shadows where your hands are and can virtualize your desk. It works OK.

                      • reply
                        February 26, 2016 4:02 PM

                        You might be able to see some sort of point cloud at best

                        • reply
                          February 26, 2016 4:08 PM

                          Not with one camera, but possible with two.. that means offset is necessary, couldn't do opposite like Lighthouse without giving up this feature. If it's real :)

    • reply
      February 26, 2016 1:11 PM

      I think you make a point at the end that is pretty legitimate. If you're already willing to spend $500 on the Rift, at that point you might as well drop in the extra $200 and go for a better experience with the Vive.

      • reply
        February 26, 2016 1:15 PM

        this was the same argument for the $500-600 Rift vs the $300-400 version, especially when adding in the costs of the PC parts likely required. And yet those extra couple hundred backs spurred a huge amount of backlash.

        • reply
          February 26, 2016 1:18 PM

          I think they priced out a lot of people when they upped the price from the expected $350 to $599, at that point why not going all out?

          • reply
            February 26, 2016 1:22 PM

            I think a lot of people just didn't realize the true total cost of ownership until they thought about a real purchase. Certainly it's true that price sensitivity is going to decrease as they go up market but both companies need to move a lot of units to build a platform so any savings can be good.

          • reply
            February 26, 2016 10:29 PM

            I'm not sure I agree with this argument. I think people have built in price limits they don't like to go beyond. I have been interested in VR since the 90's and waiting for the Oculus since it was first announced, but $600 was my absolute limit, I would not have gone beyond that price point. I have heard the same from many people I've talked to. I think the Oculus guys know what they are doing and studied price points and what people will pay for things and probably very intentionally set the price where it is to reach a certain segment of the market. I bet they know exactly what they are doing and have a pretty good idea how many they will sell at what price point. The fact that the Oculus exists at 600 allows Valve to more comfortably shoot for the higher range market and actually allows the two devices to compete less with each other. These strategies are probably very intentional by both companies.

        • reply
          February 26, 2016 1:26 PM

          I dunno, I think there's a pretty big mental leap for a lot of people in the market we're talking about between $299 and $499 in saying you can take a chance on something at $299 that's market unproven and may end up being a failure. Once you start get above that mark for a large majority of people it starts to become a purchase that they have to really think about. If you're willing to spend that much, making the decision to spend a couple hundred more for the best available experience become less of a leap and more of a bump.

          • reply
            February 26, 2016 2:04 PM

            if you're someone who already has a completely VR capable PC then I agree. I think much of the whining came from people who didn't. In which case $300 vs $500 was really like $1000 vs $1200, similar to this case. The other part is I don't think this is a case of clearly having an option for a better experience for more money. You get more stuff, but it's not clear to me at all that $800 on a Vive now is meaningfully better than $600 for a Rift now and $200 for controllers in 6 months (better for the VR or touch parts).

    • reply
      February 26, 2016 1:19 PM

      Haha not pulling any punches saying the Rift felt antiquated. I agree though, going back to gamepads tends to provoke suchs thoughts.
      And I agree that choosing the better hardware solution makes sense over choosing a larger launch title lineup. It's like PS4 vs Xbone, IIRC PS4 had almost nothing but most people understood it was a better machine and that's a powerful thing. The difference though is that many people have no basis for understanding the differences in these VR headsets so the Vive doesn't sell itself nearly as easily.

      • reply
        February 26, 2016 1:25 PM

        It isn't the gamepad that bothers me, it is the lack of a front facing camera. The Chaperone feature in the HTC Vive is an OMG moment that really changed how I felt about both devices. It is truly a killer feature.

        • reply
          February 26, 2016 1:33 PM

          IMO controllers come first but chaperone is right up there too, Oculus lacking both makes for a strong one two punch

        • reply
          February 26, 2016 1:35 PM

          The more I think about it the more I agree. I hated groping around for things in the rift

        • reply
          February 27, 2016 11:15 PM

          The camera is super cool, but it solves a problem they created. As a dev who has spent a ton of time in VR over the past year, I think roomscale VR is a bit like the Wii--fun at first, but you just can't do it for extended times, and moving around furniture gets old.

          Gamepad in VR seated sounds lame, but you can do it for hours and not get tired.

          I'm so torn on roomscale stuff--on one hand it can be cool, but there's so much that can go wrong, so the percentage of people who can have a good experience is relatively low. But the Rift, you will have a MUCH higher percent of people who have a good time out of the box.

          Who knows, maybe Sony will steal the show in the end. So many variables, need to let the market sort it out when they're all out and not supply constrained. Only then will a winner start to become obvious--debating it before release is just for fun.

    • reply
      February 26, 2016 1:20 PM

      The price doesn't bother me one bit, and I agree from the perspective of a traditional display. The latest obsession, and warranted, is the Acer 34" predator 21:9. Essentially a $1k display. Apparently that's "ok", yet VR displays priced at a lower cost is "bad". I think a lot of that is due to the lack of experience with VR within the general public. Many of us just rely on the reaction© videos, and interviews on how amazing VR is including myself.

      I want to say the only negative experience I've heard of the reborn VR is here on the Shack. I can't recall which Shacker but I believe it was mostly due to the grid-door effect.

      • reply
        February 26, 2016 1:32 PM

        People are going into VR knowing that it's a first gen product and that if it sticks, the evolution will happen quickly and the first gen hardware will be out of date in a year or two.

        The likelihood that revolutionary changes in display technology from what that Acer display offers are much, much, much lower. So making a $1k investment on that assuming you'll get 5 or more years of life out of it is a pretty different beast.

    • reply
      February 26, 2016 1:24 PM

      Item too cheap says rich guy

    • reply
      February 26, 2016 1:30 PM

      Don't give Sony ideas before it announces its price

    • reply
      February 26, 2016 1:43 PM

      It's ... certainly an opinion ; )

        • reply
          February 26, 2016 2:09 PM

          FWIW I get the point you're trying to make, and it's not crazy. I just think there's a lot more to this than the one hill you've decided to plant your flag on here (hardware features). And the opinion is sort of invalided because of the limited scope you're applying.

          I actually am of the opinion Oculus is doing the right thing by focusing on software and keeping the price a bit lower. They are going to be in a much better position as this generation moves forward (provided they don't fumble the software side of things). PSVR getting thrown into the mix is going to make things extra interesting, because as the mass-consumer 'baseline' VR system you're going to see most games made tailored toward the capabilities of that system. Remember what happened to the original XBOX? I fuilly expect 'room-scale' VR is going to be a completely moot feature for this first generation. Second generation will be out in a few years (3-4) and that's more than enough time to iterate on any missing hardware features that prove themselves out in the market.

          There's also the chicken and egg problem that VR (and every new platform) faces. They need to be affordable enough to build up a user base large enough to sell software to at a healthy profit. No matter how good the hardware is, if they fail to do that then the whole thing is going to collapse again. It's fairly complex with a lot of moving parts, but it's not really uncharted territory. We've seen many platforms come and go over the years and there's lots of lessons to be learned that can be applied to VR.

          • rms legacy 10 years mercury super mega
            reply
            February 28, 2016 10:14 AM

            As an average consumer with no experience using these headsets, I find myself sharing this viewpoint, namely that if the headset can simply supply increased immersion in already well-understood cockpit-based seated genres (driving sims, space shooters) using controllers specifically designed for these genres (steering wheel, HOTAS), that's enough to justify the cost.

            I've given up for now the expectation of a full-body FPS experience, and standing games such as hover junkers seem too limited/repetitive to bother with, so the initial lack of Touch controllers or a camera is less troubling (though the doubt and worry that I'm missing out is certainly still there)

    • reply
      February 26, 2016 1:45 PM

      Who is this Asif guy? I just know briefcase dude.

    • reply
      February 26, 2016 1:51 PM

      [deleted]

    • reply
      February 26, 2016 1:54 PM

      I wish I had the kind of money to be able to say that something's too cheap, make it more expensive.

    • reply
      February 26, 2016 1:56 PM

      Stop making my decision harder dammit.

      • reply
        February 26, 2016 6:45 PM

        To me the decision is easy. Oculus will have more games available, and that's what I want to do, play games. The Rift can play everything on Steam, as well as everything on the Oculus store. The Vive will not be able to play games that are exclusive to the Oculus store. When touch comes out, I'll give the room based games a shot. In the meantime I'll have enough games to keep me busy.

        • rms legacy 10 years mercury super mega
          reply
          February 28, 2016 10:20 AM

          I'm not even concerned about exclusives; early versions of the rift have been out so long, that hopefully I can play vr-modded versions of games I already have. That's the hope anyway

      • reply
        February 27, 2016 3:00 AM

        I will make a decision when PSVR is available. It could be the best , most affordable option for people without powerful PCs.

    • reply
      February 26, 2016 1:56 PM

      If people don't experience how great the Vive is, don't have the room to accommodate room scale VR, can't afford the premium, or have no software to use on the Vive, then what are they missing?

      Isn't there parallels between Betamax vs. VHS - where Betamax was the superior product but people were fine with the cheaper, more accessible product?

      Oculus is well positioned because as you said, they are making investments in software. I think they are also trying to use mobile VR as a way to establish brand, and get people into their Ecosystem. The more people who develop for oculus (because of both the mobile and desktop versions), then the more marketshare overall they have, even if it is the "inferior" product.

      What isn't clear to me is whether software will be "oculus exclusive" or "vive exclusive" - this will play a large role on the software library for each. But you could see how a developer may be reluctant to integrate motion controls, if most headsets won't have them available just to move more units.

      • reply
        February 26, 2016 2:02 PM

        It's remarkable how modern computing is moving that way. Massive percentages of gaming revenue moved away from insanely powerful photorealistic games towards smaller mobile experiences. Disney makes magnitudes more money today on mobile than it ever did on PC/consoles. Developers back in the 1990s thought what Internet communication needed was higher fidelity virtual worlds to connect with people. We all thought video phones would be the future of human communication. But all that has been dashed in favor of text messaging apps and selfies. I can't say that it's the only direction, but it's been highly counter-intuitive

      • reply
        February 26, 2016 2:04 PM

        Valve does invest in software. They don't demand exclusivity in return.

        • reply
          February 26, 2016 2:12 PM

          I wonder if developers would design experiences that don't require motion controls just to expand the audience, or putting in motion controls just because but focusing on an experience that is widely applicable to all VR HMDs

          • reply
            February 26, 2016 2:18 PM

            the console market provides the answers you need. It's extremely difficult to justify significant hardware exclusive features and even harder to justify designing whole experiences around it (which is more what touch VR requires, as opposed to just amping up some graphical effects for the console with more hardware power) unless there's a single player with enormous dominance in marketshare. Even if the Vive claims 50% of the market between the Vive, Rift and PSVR I don't think it'll be enough raw units in near term to justify large scale touch focused VR games. Certainly you'll get plenty of little indie things/toys like Job Simulator and whatnot though.

            • reply
              February 26, 2016 2:24 PM

              Great point. I think my only question is what the minimum standard is - Mobile? PSVR? Or the Rift?

            • reply
              February 26, 2016 2:36 PM

              All three have motion controls. Valve encourages developers to port to all systems so it's not all riding on the Vive. Developers are being funded rather than relying entirely on sales.
              The only way this fails is if they all completely fail to sell and are given up on by their parent companies. I seriously doubt that will happen, and if it does it's not any time soon. There is at this stage no grounds for such pessimism.

              • reply
                February 26, 2016 2:44 PM

                Oculus doesn't have motion controls yet and when they do they won't be in 100% of Rift owners homes. PSVR isn't out yet. If you want to get in on the launch window for VR and you're targeting touch, and even more so room scale touch for the Vive, you're significantly limiting your addressable market. If you believe Oculus will have any significant marketshare then the first 6+ months of VR you'll be cutting yourself off from a significant portion of the market by requiring touch controllers. Even more so if you're aiming for maximum reach with something that can also run on Gear VR and the other upcoming mobile VR solutions from Google/Apple/etc.

                If the Oculus Touch controllers become a required pack in for all future Oculus sales in 2H16 then that will help significantly for touch focused games in 2017 and beyond. Still you've got projections of only a couple million total VR units across the 3 'big' VR units, and a lot of Gear VR sales (especially post Galaxy S7). You just can't afford to limit your addressable market more than necessary (you're already limiting your market by making a VR game in the first place).

                Developers always have funding. It's the people providing funds demanding a return on investment by not doing things like guaranteeing half the market can't use your product.

                • reply
                  February 26, 2016 2:58 PM

                  In this case games are funded to push the system. Valve wants to push roomscale so they fund roomscale games. Oculus is creating Touch therefore they are committed to making Touch a success ie they will also fund motion control games. Etc. The success of each individual game is secondary to the success of the platform and ecosystem as a whole. Honestly I am surprised I need to explain all this to you.

                  • reply
                    February 26, 2016 3:03 PM

                    you're simply describing first party hardware exclusives for consoles. Those are used to bootstrap the ecosystem and spur hardware sales when there would otherwise be little software. They don't suddenly make all the 3rd party, multiplatform devs interested in making hardware exclusive features and console exclusive games. I already covered how Oculus will be pushing touch for games in 2017 and beyond. Honestly I am surprised I need to explain all this to you.

                    • reply
                      February 26, 2016 3:14 PM

                      I already covered how the hardware exclusive situation is nothing like you describe it. Where developers praise the fact that all VR platforms will be pushing similar motion controls for them to target, you cry doom and gloom borne because somehow you think they can't.

                      • reply
                        February 26, 2016 3:15 PM

                        borne

                      • reply
                        February 26, 2016 3:19 PM

                        they will be, but they aren't right now, and they won't be for the mobile VR solutions. All of this exists on a continuum. If you use no touch features and release a VR game in 2 months you can target 100% of high end VR units and possibly all mobile VR solutions. If you use some touch features you can't target Oculus or Gear VR until at least 2H2016, and even then you will miss out on some percentage of Oculus owners who don't have Touch (yet). If you use some room scale features you can't target Oculus, mobile, or anyone who can't do the necessary physical movements your game requires. All of these things cost you money. Nowhere have I said touch isn't the long term future.

                        • reply
                          February 26, 2016 3:27 PM

                          I just don't understand why you describe all this as if it is this massive problem only you are aware of, rather than what it actually is: an indeed large but also completely normal and expected problem where all the steps needed to solve it are already being taken.

                          • reply
                            February 26, 2016 3:33 PM

                            because you continually claim that everyone is going to be making touch games and there's no reason to think an investment in touch controllers isn't going to immediately pay off

                            • reply
                              February 26, 2016 3:45 PM

                              I have never said anything like that. I have said everyone should WANT them. Those games are far, far more interesting than any old gamepad controlled game you might as well play on a monitor. I have also shown that there are enough of such games already in development that you will be able to put your controllers to use if you preorder a Vive on monday.

      • reply
        February 26, 2016 2:12 PM

        [deleted]

        • reply
          February 26, 2016 2:20 PM

          it would be extremely strange for Valve to suddenly decide to make a software platform which they intend to monetize primarily/only through hardware knowing full well their competitors have no interest in hardware profits and knowing full well the incredibly margins afforded from owning a popular app store

        • reply
          February 26, 2016 2:46 PM

          That's exactly the opposite that I have read. Like Palmer Lucky said something about how other VR companies aren't their competitor and that convincing people on VR was. They know they need to build the market before they start trying to divide it up.

        • reply
          February 26, 2016 3:04 PM

          It's not exclusive. They've said from the beginning that you'll be able to run software from anywhere. Steam included.

    • reply
      February 26, 2016 2:10 PM

      I'm not sure I see what the point of this is. It would make more sense to say: "the occulus is cheaper because it isn't as good, they should add x features and charge more for it."

      what benefit is there to just charging more for a device that obviously isn't as good? you are also justifying the higher price because people should be able to afford it, and enthusiasts are willing to pay for it. seems like an odd thing to do if you want the tech to survive.

    • reply
      February 26, 2016 2:39 PM

      One thing I think doesn't seem to be coming through clearly is that I think the market for PC tethered VR HMDs is going to be rather small. 1-5 million people in the US, maybe 10-20 million globally. This article is a comment on how many hardware units that I expect to be sold. There is no where for the price of these products to go but down in the future, and the demand for these preorders probably wouldn't have been affected that much by a more expensive price point accompanied by improved hardware (better sensors and a front facing camera).

      I think this speaks to the profit motives for both companies. Oculus, now backed by Facebook, doesn't need to sell hardware at a profit. They have plenty of revenue from the other sides of Facebook's business to run at a loss for years. This is similar to how Microsoft has run the Xbox division. HTC can't afford a loser. They have put their best efforts into making the highest quality VR HMD to come to market. They are taking a leap of faith with this product and I think it could really pay off for them as a company. HTC has a $2 Billion market capitalization and if they sell even 1 million units of the Vive at $799, it will be material to their sales. If this product takes off, it could really give the company a nice boost at a time where they are struggling financially.

      Conversely, Facebook generates billions of dollars in ad revenue and has a market capitalization over $300 Billion. Selling a million Rifts will not be as material to their top line growth, and apparently will not really increase earnings as they claim they are selling the device close to cost. Oculus is definitely a different company since the Facebook acquisition and it seems that many milestones have been accelerated for them. I worry that they could fall into a cycle of planned obsolescence, proprietary ecosystem hooks, and incremental innovation.

      The HTC Vive is a better hardware device in my opinion.

      • reply
        February 26, 2016 2:48 PM

        Okay, is the best thing for VR putting out a product out of reach for most consumers except the enthusiasts and staying niche, or is the best thing for VR is to encourage as much widespread adoption into popular culture at the expense of incremental innovation?

        I hate to bring up the format war once again, but if I am a developer, I want as many people as possible to have to device so I have the widest consumer base possible

        • reply
          February 26, 2016 2:52 PM

          High quality VR is simply too expensive right now to have a broad appeal. This is why I brought up Tesla in the article. Gear VR and whatever untethered smartphone VR devices will be the answer to reaching a broader market for now. Over time the experiences will converge and we won't need to think about tethered VR anymore.

          • reply
            February 26, 2016 3:01 PM

            Comparing Tesla to the Vive may not be a great comparison because people don't "develop" software for the Tesla - the hardware stands on its own.

            The Vive needs software to thrive, and developers need wide adoption to make the investment to develop worth it.

            AAA games right now need to sell tons of copies to recoup the costs of development. Even if you have a high quality device, will a developer be willing to invest the money for a AAA experience if they won't get a return on their investment?

            If people can't afford the Vive, then who will develop for it?

            • reply
              February 26, 2016 3:09 PM

              You forget that Valve is a partner in this?

              • reply
                February 26, 2016 3:16 PM

                this is another unknown in the financial picture. What is Valve and HTC's relationship exactly? Because they are fundamentally at odds with one another from a business model perspective. Valve would rather sell the Vive for as close to $0 as possible, even eating hardware costs if necessary. Meanwhile HTC needs to keep selling units. They're the ones you should worry about falling into a cycle of planned obsolescence, not Oculus, as they're the ones in need of regular new units. Valve is happy that you bought a Vive. They don't care that you didn't buy Vive v2 in 2018, because they're still taking a cut of the software you're buying in 2018. HTC cares deeply that you buy the Vive v2. Of course this can be mitigated with various revenue sharing deals and whatnot but it's all very nebulous at the moment, whereas it's easy to understand the alignment of Oculus and Sony's goals.

              • reply
                February 26, 2016 3:19 PM

                What are the Valve-funded launch titles? Has there been a public commitment by Valve that they are going to develop a AAA 1st party game for the Vive?

                • reply
                  February 26, 2016 3:21 PM

                  I apologize *funded=developed

                • reply
                  February 26, 2016 5:13 PM

                  Seems odd to develop a VR HMD with no plan to support it with software, no? I dunno, maybe Valve will announce something at GDC. They have quite a portfolio of franchises that they could bring to VR.

      • reply
        February 26, 2016 3:13 PM

        How much is HTC already in the hole on R&D for the Vive? If we believe the Rift is being sold at or near cost then what kind of margins can we realistically expect the Vive to have? Even if they sell a million units that's moving top line revenue but not profit. And as you noted, the prices will only be coming down and their competitors are happy to eat the cost on hardware, so what sort of runway does that leave for HTC to recoup their R&D investments over the next few years?

        I don't think you give FB enough credit here. They've done a masterful job at large scale acquisitions, letting those properties continue to operate independently while leveraging FB's assets (ex Instagram and WhatsApp). They've consistently demonstrated an eye for the long game (including with FB itself and FB mobile, now with messaging) and on the development side are actually producing a lot of frameworks and tools that are highly respected and well liked (ex React/React Native).

        • reply
          February 26, 2016 3:15 PM

          I give FB a lot of credit. They are one of the largest companies in the world. Want me to switch to Facebook comments again to prove my respect?

        • reply
          February 26, 2016 3:54 PM

          You raise a lot of great questions about the R&D expense of the Vive. I don't know the answers. There is a partnership between HTC and Valve on the Vive. Valve probably spent a considerable amount of money on research and development in the VR space before partnering with HTC.

          • reply
            February 26, 2016 3:58 PM

            I just don't know about that. My very uninformed gut feeling is that Vale usually gets their partners to spend a lot of their time and money in these kind of endeavors while avoiding too much risk themselves.

            • reply
              February 26, 2016 4:00 PM

              Exhibit one: steam machines?

              • reply
                February 26, 2016 4:03 PM

                Good points, but since Valve is a private company we have no idea what the arrangement is with HTC.

                • reply
                  February 26, 2016 9:12 PM

                  I would really love to know more about that relationship. Valve clearly has money, but does anybody know how much? I would assume that HTC is still bigger by virtue of being publicly traded, but it is still entirely possible that Valve could have a large war chest to burn and has a strong interest in a being a huge platform influencer and serve their interests of continuing to grow Steam in the long term.

              • reply
                February 26, 2016 4:04 PM

                Ding.

              • reply
                February 26, 2016 4:27 PM

                Steam machines were doomed from the start. Hey PC OEMs who can't make any profit selling other peoples' operating system want to sell our much less popular operating system instead? No no it won't be just like your Windows and Android business, it'll be much better I promise.

                Presumably they learned from the experience.

          • reply
            February 26, 2016 4:26 PM

            This was previous and big news just before/after VR started it's resurgence. Jeri Ellsworth who assembled an AR team within Valve circa 2011/2012, was basically fired after the two groups started to shift toward VR and she was "bothering" other employees to come work with her. The details are murky but there was a push to let AR go and go after VR.. When she fought and was being fired, she asked if she could keep everything (they said yes) and thus, CastAR was born. Valve had been working on this stuff with Abrash almost prior and parallel when Lucky was doing his.

            In fact it wasn't until Valve pushed, that Oculus included horizontal plane tracking.. Otherwise it was just going to be rotation.

            In fact, when Abrash made his announcement on what the minimum requirements for VR were, they were based on prototypes that the Valve VR team had created. They were not deduced and then hardware/software assembled, it was vice versa. So I imagine a lot of the R&D Valve had sunk in to it already with their hardware teams.

            I can't say anything, other than this about HTC's R&D, but they have most recently sunk lots of cost into taking it on and making sure the experience is rock solid and HIGHLY accessible to an end user.

      • reply
        February 26, 2016 3:34 PM

        The Oculus is clearly intended to be a distribution platform, and a social platform, in its own right. We can see this already in the content pipelines that they have been cultivating for their device and the launch titles (Movies, Software, and Games) that they have begun to line up for the hardware releases in the future.

        By subsidizing their hardware and creating a value proposition they are tapping the market for their media products which are most likely the earning proposition behind the Oculus as a technology.

        One of the big differentiators here is that the Vive is being delivered tied in to an already existing distribution platform in the form of Steam. Because they have no need to try to build a market it behooves them less to subsidize their hardware and manufacture and sell it at a loss.

        All things being equal, the Oculus hardware is more impressive but the Vive content seems to have a better content outlook- in an odd twist of fate considering what we know about the market strategies for each product. Oculus has an exclusive arrangement with Samsung to produce the panels for the Rift, and that panel is superior to any other available on the market at this time. The lighter weight means less user fatigue, and the multiple iterations on the hardware have allowed the device to be molded by user feedback over time.

        The Vive meanwhile offers mobility, which is considerable, and their partnership with Valve sets them up to build strong relationships with excellent content producers.

        Personally I will be buying and using both devices, they are both very cool!

    • reply
      February 26, 2016 2:55 PM

      Some good points but ultimately I believe people aren't convinced that room-sized VR is the way to go.

      There are both sides to the worry about:

      If VR is too expensive and too demanding on the consumer then it becomes similar to the past when the VR solutions were just too bulky and inconvenient for any consumer to buy.

      If VR is not different enough from the typical experience we get from displays, then after the "awesome" factor wears off we also see people not wanting to buy it.

      In the end I truly believe the answer is in between. We need room-sized VR to take off, but we also need seated VR experiences to take off. I am glad the Vive can do both right out of the box, and it is sad that the Rift Touch was delayed, but in the end both will still help us get to the proper answer just fine.

      The price is fine, people still think $599 is too much, so the Rift is not too low.

      • reply
        February 26, 2016 3:07 PM

        The benefits of the front facing camera and the sensors are not limited to the 10 X 10 foot experience.

        • reply
          February 26, 2016 3:10 PM

          I agree but those aren't going to hurt anything. It just means the CV2 will have a front facing camera.

      • reply
        February 26, 2016 8:00 PM

        with room sized VR does it warn you if you are getting outside of the defined zone?

    • reply
      February 26, 2016 3:17 PM

      A lot of the speculation in this article has flimsy basis, and many of the assumptions reflect a thin understanding of the market and the technology involved with these products

    • reply
      February 26, 2016 3:29 PM

      [deleted]

    • reply
      February 26, 2016 3:33 PM

      I disagree with this opinion. The rent is just too damn high. I want to play with this stuff, but $799 and $599. I mean... it's cool stuff, but that doesn't even take into account the hardware you need from the PC to run the software. All for what is currently a niche product. Is it cool? Yeah. Is there a potential future here? Yeah. Right now for $599 - $799 and you have to upgrade your PC (for the majority of us). Nah.

    • reply
      February 26, 2016 3:48 PM

      Let's talk about that software lineup at launch as mentioned. What's notable? I'll start:

      Oculus:
      Eve Valkyrie

      Vive:
      Job Simulator

      • reply
        February 26, 2016 3:56 PM

        Yeah. Chicken and egg thing, right. The techno lust in me says Vive. The gamer says Rift first. My mind says get both and my wallet screams nooooo.

    • reply
      February 26, 2016 4:08 PM

      would be cool if concept2 made a vr app so its like im at the olympics

    • reply
      February 26, 2016 5:33 PM

      I agree. Once a certain price threshold has been exceeded, early adopters will go for the best hardware. $599 priced the Rift out of the mainstream market, and into Valve/HTC's enthusiast market.

    • reply
      February 26, 2016 6:14 PM

      I just want to incessantly repeat my point that: A huge market for these things will be creative industry business. Ad companies, general internet media companies, industrial design firms, design departments for big manufactuing firms, are all going to be buying multiple units; some for specific uses, some to look high tech to the clients, some as R&D and some just to keep familiarity with the latest tech. All of them will support a higher price.

    • reply
      February 26, 2016 6:47 PM

      Completely agree and think you missed a key element: the commercial, industrial and government segments wont flinch at a $800 or even $1500 price point. They won't even bother capitalizing it - the software will cost far more than the hardware.

      Gamers are broke compared to Wall Street.

      • reply
        February 26, 2016 6:48 PM

        Yea, I don't think people are thinking about the applications of VR as a tool for enterprise. Good point that you and gaplant have brought up.

        • reply
          February 26, 2016 6:58 PM

          Next time your write an article to consumers, be sure they understand the implications of enterprise level rollouts of the technology. Definitely the path to success =)

          I know USAA has had VR stuff in the lab from day 1 because of the training potential. You could train every insurance adjuster in the country on every type of wreck for every type of car and test them to see who is better and who is worse.

      • reply
        February 26, 2016 6:58 PM

        while they don't flinch at prices like that the way consumers do they're also not likely to spend a little extra for a slightly better experience than a cheaper alternative. aka the story of the iPhone

        • reply
          February 26, 2016 7:04 PM

          They'll choose Vive or Rift based on software requirements and the front facing camera adds a lot of value because you can mix live interaction with VR.

          Nothing that a good Rift sales rep can't overcome, but the price point is irrelevant.

          • reply
            February 26, 2016 7:14 PM

            I really don't buy this. It's totally worth evaluating the enterprise market in the correct and different context from consumers but to say price point is irrelevant seems crazy to me given the history of companies, small and large, choosing the cheapest tech options rather than the best for a marginal cost increase.

      • reply
        February 26, 2016 7:17 PM

        DAQRI is working on a wireless AR headset. Last I heard it was going to be an order of magnitude more expensive per unit than these consumer products, though.

        • reply
          February 26, 2016 9:18 PM

          Keep hoeing that road, I say. That niche market will finally be commodified by these devices. Also good luck on that wireless latency while at low power. I remember Palmer saying many times how he got access to closed door demos and public trade shows that had ridiculously expensive devices that just didn't provide good experiences.

    • reply
      February 26, 2016 7:15 PM

      Awesome article. I love how you approached answering the question of which device they should buy. The way you explained features versus initial software lineup was perfect. Great work!!

    • reply
      February 26, 2016 9:19 PM

      This isn't the article shacknews deserves, it's the article it needs. (I'm still getting both, what am I doing?)

    • reply
      February 26, 2016 9:21 PM

      [deleted]

    • reply
      February 26, 2016 10:33 PM

      I believe that the lack of a front facing camera and less advanced sensors (two things that the HTC Vive feature) are deal breakers for many early adopters.

      Sorry, Asif, that's total non-sense.

      • reply
        February 27, 2016 11:21 PM

        Sadly I think the Vive's biggest misstep was not having integrated audio. Using headphones with it is very clunky compared to the Rift.

        We have voice chat and Avatar presence in our game, and it's soooo nice to know 100% that the user has a both a microphone and headphones on.

        And a gamepad for that matter. My prediction is that the display in VR is the biggest innovation, and to play many many games a gamepad is still the best way. (mouse + keyboard in VR is lol) The way Vive is setup, we can't assume the player has a wireless gamepad in their hands. :/

    • reply
      February 26, 2016 10:36 PM

      So, there are two levels of VR. The enthusiast level, which requires a $2,000 PC and possibly lots of room space, and the $100 level, which is targeting mobile phones.

      I think the mainstream VR is going to be the breadwinner. Enthusiast or highend VR is going to take time to seed. Hell, not everyone who games is going to get it. Not everyone who PC games. Not even everyone who PC games with a highend PC.

      Vive and Oculus are niche.

    • reply
      February 26, 2016 10:41 PM

      http://i.imgur.com/r85sqia.jpg

    • reply
      February 26, 2016 10:58 PM

      My PC tried to crash just from the Cost Of A Computer section. I think it was out of shame.

      • reply
        February 27, 2016 6:48 AM

        I am not worthy, I shall free you master. (commits seppuku)

    • reply
      February 26, 2016 11:16 PM

      Very nice, awesome article buddy thanks for doing this.

      I hope when you get both VR head sets that you do another article or how you feel both ended up after the initial release. I have had my eye on the Vive and really wonder how it is, looks awesome as a whole package and I know you really thought it was ace when you tried it.

      Only bad thing for me personally is I won't be able to get/try either one at launch so I am going to have to live through you guys that get it read how it is. That is another reason why I appreciate these articles, [sigh] life of a indie dev the cheddar no longer flows :(

      I been thinking about the software and I think its a good question for you:

      [Q] Won't Eve: Valkyrie work on a none VR system and the Vive with out any issues? Or is it really programmed to the Oculus SDK in a way that it will check for the Oculus device in the OS and if its hooked up to your computer and will not work if its missing? Which leads me into if it will work is software irrelevant and then the Vive is even more so a ultimate VR solution. I don't have any VR stuff so I am not sure how they program it, would suck if it actually looks for the device and does not work. You would think there is a generic VR mode or none VR in VR games by devs, it would really suck if they did it like a console.

      MS should add a VR generic API segment in DX12.1 so it won't matter what VR you get for the software if the above stuff is a issue.

      Keep it up man, thanks.

    • reply
      February 27, 2016 2:08 AM

      [deleted]

    • reply
      February 27, 2016 1:04 PM

      Nope, I completely disagree. You start off by making a comparison to Telsa and Apple but both of those were the only kid on the block when they started so charging a premium makes sense. This time the market is being bombarded by Sony, Oculus, Valve, Samsung, etc... there are a number of devices offering what is essentially the same thing when it comes to the consumer. You can talk about the 3D space and the forward facing camera, but most people won't care about that. I've still yet to make up my mind, but the Vive's higher price point does NOT help. The Oculus not only has higher mind share among consumers, it's cheaper and comes with a controller people already understand. And Sony, well Sony is likely going to offer the lowest quality product, but they're in the single best position to have it succeed since their market already owns the hardware needed to use it. I feel like this article was written by of someone who's lost perspective on a product that they've already paid for and is now doing some backwards reasoning.

Hello, Meet Lola