Meta, born Facebook, may be one of the most influential and ambitious companies in the world, but that doesn’t mean it’s immune to broader economic woes. On the same day, a series of news was revealed the extent of the recent tightening of the Meta beltthe company said it was raising the prices of its Quest VR headsets.
This is a remarkable update in an industry that typically sees gadget prices drop as technology advances. A higher price tag on one of the world’s most popular VR headsets also creates another potential hurdle in Meta’s quest to lure more consumers into virtual reality.
From August, the two available configurations of Meta Quest 2 Virtual Reality Headsets will both increase by $100. The 128 gigabyte model will cost $400 and the version with 256 GB of storage will cost $500. A free download of the popular beat the saber game, typically $30, will ship with the headsets through the end of the year. This brings the Meta Quest 2 headset closer to the price of $549 HP Reverb G2 and the HTC Vive Prowhich starts at $599 for a headset only (without hand controllers).
Meta said through a spokesperson that it has invested billions of dollars in the VR ecosystem and that the company is “adjusting the price of our Meta Quest 2 headsets to allow us to continue to invest so as to continue to drive this increasingly competitive industry forward.” for consumers and developers.
Meta Quest’s price change signals an overhaul of the company’s metaverse strategy as it – and other tech companies – adapt to changes in the advertising market and prepare for a possible recession. Meta Founder and CEO Mark Zuckerberg has made it clear that he sees VR as a long-term investment. Last year, Meta said it planned to invest $10 billion in its metaverse efforts. Since then, the unit has bled money. Meta spent more than $10 billion on VR in 2021 alone, and in its Q1 2022 results, it reported a loss of nearly $3 billion for its metaverse division.
A researcher at IDC, Francisco Jeronimo, shared via Twitter last month that Meta has sold nearly 15 million units of the Quest 2 since its launch in 2020, and that the company has managed to capture an extremely large share of the virtual reality market. But his dominance might not last forever. While VR shipments are expected to increase this year, with potentially up to 14 million units shipped in 2022 alone, planned headsets from ByteDance, Sony and Apple could put pressure on Meta, IDC analysts warn.
But in the meantime, a $100 price hike on Quest 2 is unlikely to significantly increase Meta margins. It could just mean that the company loses slightly less money on his metaverse push, as he continues to present his vision for our computing future.
“Most people expect Meta to take a loss on VR, and maybe even at some point,” says Anshel Sag, principal analyst at Moor Insights & Strategy. “The problem with this price increase is that people usually expect, when a product has been out for this long, that it will get a price To cut, not an increase. This is the most shocking part of it all. This goes against the usual trend of consumer electronics. The company may still want to offer discounted versions of Meta Quest 2 over the holidays, he adds, but the “discounted” prices could now match the product’s original prices.