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Oculus founder Palmer Luckey: "We don't make money on the Rift"

"Rift is obscenely cheap for what it is."

Yesterday Oculus announced the Rift virtual reality headset costs 500 / $600 - a higher price than many had expected.

Following the announcement, Oculus founder Palmer Luckey took to Reddit to answer some of the many questions sparked by the announcement, including those on price, and revealed the company isn't making any money on the sale of the Rift.

"To be perfectly clear, we don't make money on the Rift," he said.

The Rift comes bundled with a number of extra peripherals, including a remote and an Xbox One controller, and a couple of games.

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Just sell the Xbox One controller if you don't want it, Luckey suggests.

Some have wondered whether the Rift might have been cheaper if it hadn't come bundled with these items. Luckey cast doubt on this.

"The Xbox controller costs us almost nothing to bundle, and people can easily resell it for profit," he said.

"A lot of people wish we would sell a bundle without 'useless extras' like high-end audio, a carrying case, the bundled games, etc, but those just don't significantly impact the cost."

So what does impact the cost? The expensive components inside the Rift headset, Luckey explained.

"The core technology in the Rift is the main driver - two built-for-VR OLED displays with very high refresh rate and pixel density, a very precise tracking system, mechanical adjustment systems that must be lightweight, durable, and precise, and cutting-edge optics that are more complex to manufacture than many high end DSLR lenses," he said.

"It is expensive, but for the $599 you spend, you get a lot more than spending $599 on pretty much any other consumer electronics devices - phones that cost $599 cost a fraction of that to make, same with mid-range TVs that cost $599. There are a lot of mainstream devices in that price-range, so as you have said, our failing was in communication, not just price."

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How much?

Luckey's mention of "communication" is a reference to his claim that Rift would be "roughly in that $350 ballpark, but it will cost more than that" in an interview. Indeed, in an interview with Eurogamer in 2014, Luckey said Oculus wanted to hit a $200-$400 launch price for Rift.

In the Reddit AmA, Luckey apologised for this "poor messaging".

"I handled the messaging poorly," he admitted.

"Earlier last year, we started officially messaging that the Rift+Recommended spec PC would cost roughly $1500. That was around the time we committed to the path of prioritizing quality over cost, trying to make the best VR headset possible with current technology.

"Later on, I tried to get across that the Rift would cost more than many expected, in the past two weeks particularly. There are a lot of reasons we did not do a better job of prepping people who already have high end GPUs, legal, financial, competitive, and otherwise, but to be perfectly honest, our biggest failing was assuming we had been clear enough about setting expectations.

"Another problem is that people looked at the much less advanced technology in DK2 for $350 and assumed the consumer Rift would cost a similar amount, an assumption that myself (and Oculus) did not do a good job of fixing. I apologize."

Luckey was asked for a cost breakdown of the Rift, but he declined "for both internal and partner related reasons".

"I will use whatever credibility I have left to assure you that you are getting a pretty crazy deal."

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