Can Oculus’s planned $200 VR headset move the needle for VR in gaming?

So far, VR hasn’t exactly taken off in they way many would have predicted 2 years ago. MIDiA Research consumer survey data reveals that just 4% of consumers own a VR headset (weighted average across US, UK, Brazil, Japan, Sweden and Germany). To put this into perspective, this is approximately half of Amazon Fire Stick’s penetration and two thirds of Apple TV consumer penetration.

Part of the problem (particularly for the higher end of the market) is of course the combination of a relatively high price point and the relative lack of a compelling content mix that would resonate with the masses – something that MIDiA warned about, back in 2016.

Naturally, consumers will always compare to what’s available. So, in their minds they can either spend $300-$400 on a console, with a REALLY LARGE catalogue of familiar entertainment propositions, or spend a higher amount on an entertainment proposition they are not familiar with (i.e. more risky) and which offers a significantly narrower range of games and other entertainment. In other words, the value exchange dynamics simply don’t quite work in the eyes of mainstream consumers just yet.

Coming up with a lower price-point device will narrow this gap somewhat, and allow for a more justified value exchange for potential new VR adopters.

Oculus Rift’s recent $200 price drop is a testament to the crucial need of narrowing this gap to bring VR to the mainstream. But, this was only announced as a temporary discount and rightly so - instead of devaluing its own product, it’s smart for Facebook to introduce a mid-range device, with the hope of maintaining higher price points of top tier VR devices in the future, when more and better content becomes available for them.

Though cheaper VR solution like the Samsung VR Gear (approx. $129) exist, they do not quite achieve narrowing the value exchange gap, because consumers associate it more with the mobile gaming paradigm (dominated by freemium), rather than the console gaming one.

More justifiable price points and an increasing volume of content (not only in terms of the number of titles, but also in terms of the genre and entertainment format scope) will make VR more appealing to the masses over time.

However, VR devices will not sell because of their tech specs or price points alone. They will only start appealing to the mainstream, when/if their games catalogues of what users are able to enjoy start matching consumer expectations more closely. And, great games take time to produce. While discounting the existing, and producing new cheaper devices will play a role, entertainment VR will not pick up meaningful traction until there is a compelling content mix in place. Give it 3-4 more years.