HTC Vive’s price cut is big, but it might not be enough to take VR mainstream

HTC has announced that its HTC Vive virtual reality headset is getting a price cut. The exact percentage varies across regions, but the average is around 25%. 

The fact that this has happened isn't  surprising. The price of consumer electronics inevitably drops over time. It’s usual that a company, after it spends millions putting out the first version of a product, will figure out cheaper ways to manufacture said product. 

It happens with computers, it happens with smartphones, and it’ll happen with virtual reality headsets as well. 

But what’s interesting about this price cut is that it has nothing to do with manufacturing cost savings being passed on to the consumer. 

When I asked HTC Vive’s European General Manager, Paul Brown, about the price drop, he was keen to emphasise that it was a "strategic decision" rather than having been borne out of any fall in manufacturing cost. 

"It’s really been a case of saying it’s a great commercial business decision to really go in this quarter for this lowering of the price," Brown explained. 

From reading between the lines the implication of this price cut, especially when combined with the Rift’s price cut earlier this year, is clear - VR is simply too expensive at the moment for mainstream consumers, and it will need a price cut for sales to pick up. 

So will it work?

There are three barriers to VR adoption at the moment: price, content and space. These price cuts naturally help with the first point, but they do little to help with the second two. 

Content is a problem that will persist for as long as the install base for virtual reality headsets is low. Publishers will avoid spending too much money developing for a platform with a limited number of users. That said, as more and more VR headsets continue to be sold, this is a problem that will gradually disappear. 

More pressing is the need for VR users to have a decent amount of space to fully make use of their headset, and it's difficult to see how this problem could ever be overcome. 

A key selling point of the HTC Vive is its support for room-scale tracking right out of the box, allowing for users to move freely within a 10 x 10 feet area. The immersion this adds is immense, and is key to adding a sense of presence to virtual reality. 

The problem is, those who can afford VR globally are sometimes not in a position to have enough space for a full VR setup. As Cliff Bleszinski, veteran game developer and early investor in Oculus, explains: “The irony is that they [people who can afford VR setups] normally live in New York, Tokyo or Los Angeles, aka places that can’t afford the real estate to have a room-based VR. So they’ve created their own ultimate Catch 22 for that.”

Based on these barriers it’s tough to say whether these price cuts will be the thing VR needs to really hit the mainstream, especially with the amount of cheap, mobile-based VR solutions that are creating consumer confusion as to what high-end virtual reality is actually capable of. 

The price cut could help people who were on the fence finally jump into the technology, but the content and space problems are harder nuts to crack, and are likely to stick around for a while longer. 

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August 21, 2017 at 05:45PM
Jon Porter