Last week's $600 price reveal for the Oculus Rift came as a surprise to many (partially because of poor messaging leading up to the announcement), but the plan was always to start with a break-even business on the Rift headset, said Nate Mitchell, vice president of product at Oculus. Speaking with GamesBeat, Mitchell noted, "The reality is that we're selling at cost, though. That's something we always talked about. We'll break even on the hardware. The goal is not to make a ton of money there. We want to get VR in the hands of as many people as possible."
"Over time, as the industry scales... That price will come down over time as this thing gets to more people. Obviously, there's competition. That will help too. This is the beginning of all that. We're proud of the product that you get for $599."
While it's not uncommmon for console platforms to lose money on new hardware initially and to make that money back with software (the razor and blades model), Mitchell stressed that going into the red with the product was simply not an option. That being said, it appears that subsidizing the Rift hardware is not out of the question to lower prices at some point down the road.
"We wanted to run a profitable business on the hardware side, honestly. Right now, we've landed at this break-even point. That's what we committed to. We felt like it was the right thing to do to kickstart this ecosystem. Maybe over time, we'll decide to subsidize hardware," he commented. "I'd much rather make a profit on the hardware, so we can reinvest that in our own team's development to energize and speed up the overall VR road map. We'll see where it lands. For gen one, we're at this break-even point. We feel good about that. Subsidizing costs more, especially as this thing goes up. We don't want to dig too big a hole."
The big challenge now is how to draw more interest to the Rift beyond the early adopters. Software will be instrumental in that effort, as our own Rob Fahey remarked. Oculus has promised over 100 VR titles this year, and Mitchell said that his team will soon be revealing "the exact launch titles through our 30-60-90 day launch window over the next few weeks. A lot of developers have been waiting for us to announce our date. You'll see more developers standing up this week and next to say they'll be there at launch."