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Facebook Inc (NASDAQ:FB) Cuts The Price Of Oculus Rift In A Bid To Spur Sales

The price of Facebook Inc (NASDAQ:FB)’s Oculus Rift VR headset has been reduced. The headset which was launched last spring will now cost $500 rather than the $600 it was originally going for. Facebook also announced that the motion controllers that accompany the Oculus headset would have the price reduced by half. They were initially priced at $200 but will now cost $100.

Slow uptake of VR

The move by Facebook to reduce the price of Oculus and its accessories could be due to the fact that the slow uptake of virtual reality has been blamed on the high cost of headsets. A headset manufactured by Huawei, HTC Vive, for instance costs about $800 inclusive of the controllers. The Sony Corp (ADR) (NYSE:SNE) Playstation VR from Sony is priced at $400 exclusive of controllers.

There is also the cost of a computer which has to meet certain minimum requirements necessary to power a virtual reality headset. That means that even with the reduced price of Facebook’s VR headset, buyers will still have to fork out more than $1,000 for a complete set of a computer, controllers and the headset.

Manufacturing efficiencies

Oculus’ head and co-founder, Nate Mitchell said the cost reduction was because of manufacturing efficiencies that had been achieved. He, however, did not elaborate though he added Facebook’s position that the social media giant was not interested in making money with the Rift but rather to broaden the appeal of virtual reality to more people. The social media giant is, however, not about to start offering the headset for free.

“We also don’t want to be losing too much money on this. We want this to be a sustainable business,” Mitchell told Fortune.

Though Facebook has so far not revealed the number of headsets that it has sold, analysts estimate that the figure was around 355,000 units last year. This pales in comparison to the one million headsets that Sony revealed it sold last year after launching the Playstation VR in the fall of 2016.

In Wednesday’s trading session, shares of Facebook Inc rose by 1.39% to close the day at $137.42.

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