Palmer Luckey Oculus Rift

Oculus Rift’s $600 Price ‘Obscenely Cheap,’ Creator Palmer Luckey Defends Price Increase

Those interested in the Oculus Rift got a bit of sticker shock Wednesday when pre-orders for the virtual reality headset launched at a $600 price point. While many blanched at the cost and Europeans erupted over an even higher price, creator Palmer Luckey took to Twitter to defend the device’s high price by pointing out it could be even higher.

The $600 Oculus Rift bundle includes the headset, a separate sensor to track user movement, the Oculus Remote, an Xbox One controller, and all necessary cables. Two games included – the space shooter EVE: Valkyrie and the colorful platformer, Lucky’s Tale.

Oculus Rift Box
[Image via Oculus]
Luckey explained Oculus VR is actually losing money selling the Rift hardware at the $600 price and that cost is “obscenely cheap” for what buyers will receive when shipments start at the end of March 2016.

The Oculus Rift creator also dismissed concerns the inclusion of the $60 Xbox One controller was helping drive up the cost.

The Xbox One controller was added to the Xbox One bundle following a partnership between Oculus VR and Microsoft, as reported by The Inquisitr. The partnership is meant to give Microsoft a foothold in the VR space, as it does not have a VR device of its own. Meanwhile, the Oculus Rift gains a controller that can be used by everyone while the Oculus Touch controllers are delayed until later in the year.

Meanwhile, Europeans have voiced concern about the higher cost of the Oculus Rift in their countries. The device costs £499 in the United Kingdom and €699 in other European countries. That translates to roughly $754 USD. Most of the increase in cost is born by regulations and taxes, according to Luckey’s response to YouTube gaming personality TotalBiscuit.

Goods in Europe have taxes automatically built into them via a Value Added Tax (VAT) that can be as high as 20 percent. Meanwhile, USA residents have sales tax added on to their purchase ranging for zero for select states such as Delaware to just under 10 percent in states such as Tennessee and Arkansas.

The reaction to the $600 price of the Oculus Rift could best be attributed to poor setting of expectations by Oculus VR and Palmer Luckey. The creator told Eurogamer in 2014, “We want to stay in that $200-$400 price range.”

In October 2015, Luckey told Road to VR the Oculus Rift would be in the $350 ballpark, but would ultimately cost more due to added technology. Most would contend that $600 is not exactly in the same ballpark as $350.

Oculus Touch Controllers (Oculus VR)
[Image via Oculus VR]
Palmer explained the price difference between was originally promoted and the final version was due to the Facebook acquisition giving Oculus VR more resources. The Oculus Rift creator told Polygon in an interview Wednesday this opened more possibilities from the Development Kit 2 version that was being worked on at the time of the $200-$400 comment.

“What came out of that were the prototypes that became Crescent Bay [a prototype for the retail version of the hardware], and when we compared what we had to what we were making internally, it was such a huge difference,” Luckey said to explain the jump in price. “It was hard to look at what we had made before and say, ‘Yeah, this is consumer-ready, this is what everyone is going to want.'”

“We decided, in the end, to optimize quality over cost.”

[Photo by AP Photo/Eric Risberg]