It’s no secret that the Oculus Rift is expected to do well, but given the level of investment and the level of research that has been plowed into the hardware, software and much more, how are Oculus and their current overlords Facebook hoping to turn a profit? Experts are predicting big things for the Oculus Rift, despite stiff competition from the likes of HTC Vive and PlayStation VR. It is expected to sell around five million units in the first year alone, which would be quite an achievement.
“Net-net, we expect Facebook will grow hardware revenue generated from Oculus at a 4% five-year CAGR from $2.1 billion in FY16 to $2.6 billion in FY21,” said analytic firm Suisse.
Facebook has invested a lot in Oculus, so much so that it could take them until 2021 just to break even. Of course, they’re not exactly short on funds at the moment and their investment goes far beyond people playing flight sims, so who how profitable the Oculus may perform in markets outside of gaming.
“However, given our assumption that Facebook will once again demonstrate a willingness to forgo near-term monetisation in return for increased product adoption, we are modeling an initial negative gross profit impact from the initiative – with Oculus gross margins reaching breakeven by 2021 and contributing ~$50 million in gross profit by FY22.” added Suisse.
With the price estimated to be in the region of $350 and a launch in early 2016, the time of VR gaming is almost upon up. Do you think it will be a success?
Everyone will want VR long before everyone can afford VR. It is going to be expensive at first, but the cost will drop over time.
— Palmer Luckey (@PalmerLuckey) October 15, 2015