Why is Oculus Quest 2 only $300

I keep seeing a question on forums and groups where people people are confused why Quest 2 is only $300.

The answer is simple.

1. Distribution of technology

The more people get their hands on the new tech and medium, the more content can be funneled through them.

The best way to get people to adapt and purchase is:

a) Lower the friction through obtaining the device (price)

b) Promise an exciting future (content and exciting future)

c) Reliable support (Facebook is going to be pumping the new channel until it becomes a near status quo (just like mobile phones)

2. Revenue through content and services (and add-ons)

Facebook /Oculus is actually losing the money on getting the Quest 2 in your hands.

That’s intentional because it’s going to capitalize (massively!) in other areas:

a) XX% of revenue for each app that is being purchased on Oculus Store. Epic sues Apple because they think it’s unfair that Fruit Company pockets 30% of their profit.

FB is going to make siiiiiiick money on every single app that is being sold through their platform (and it’s going to be a lot since apart from Steam there’s no other mention-worthy VR platform)

b) Services and add-on — All these little dongles, straps, and cables adds up the price that isn’t that small anymore. It’s just like your printer in your home office which I’m sure is empty

Can you think of a company that sells their dongles and little knick-knacks for a ridicilious price (hint — it rhymes with Opple)

3. Data collection & New advertising channel

Ooof, and the part that hurts the most. To use Oculus Quest 2 you have to login through Facebook which is going to learn everything they can to learn about you so it can:

a) Push you new content to buy based on your previous choices

b) Open up a new advertising channel for marketers. Remember back in the day when FB bought Instagram for $2B and most of the people were like “dafuq — why?”

Because of FB’s weapons of mass distribution IG was able to grow like crazy. Just last year alone it brought it $20B in ad revenue (more than 1/4 of Facebook’s earnings).

The strategy is repeated here. Mobile image/content sharing was blue ocean back then and Instagram amassed the most audience. Guess what, VR is a blue ocean as well and law of being first and claim the space is a big tasty chocolate cake of revenue that you can’t resist.

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