Large corporations – such as Facebook , HTC and Sony – spent substantial resources on the virtual reality market to ensure they have a stake in it. Clearly, these companies see profit in these headsets. In this article I perorate on its current status, and how PlayStation could come out swinging if they plan accordingly.
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All three virtual reality headsets have been given release dates and price tags.
Oculus Rift gave a release date only to add its price of 599$ at a later date, treating the public like a parent who has to hear why the toy matters, agree with their child, before said kid surprises them with the price. HTC’s Vive VR was recently announced to be 800$. Sony remained reticent in regard to their competing product, PlayStation VR, until this tuesday at their GDC Conference where they announced it will cost 399$, coming this October.
Before this announcement, PlayStation was quick to refute what was said by the GameSpot C.E.O Paul Raines, in which Mr. Raines stated PlayStation is looking to release their headset later in the Fall. He was clearly correct. The PlayStation VR has been in R&D for years, and at several trade shows; they have to release it as soon as possible, especially now that it is the least expensive of the three.
Sony can – and probably should – bundle it as a Christmas present. You can’t underestimate how little people know about a new product; no one knows where customer awareness stands for these headsets. Thus, if they bundle it, then market it as essential to the console experience, the public will understand what it is: a cheaper, [perhaps] superior VR headset.
PlayStation would’ve been in a world of hurt if it costed more than 500$; they knew this, and took action. As the PS4 keeps outselling the Xbox One 2/1, PlayStation clearly doesn’t mind lowering the cost of the headset, which may countervail that loss with the profit made from console, and software sales. From PlayStation’s point of view, if they abnegate profit from the headset price, more people will purchase it.
Once this preliminary install base is built – once Sony has a steady foundation in the V.R market – it will give more game developers the initiative to create games specific to that device.
Historically, every PlayStation console has sold at a loss, except the PS4.
The loss was justified because they made it up in software sales, in addition to selling more consoles – throughout its life-cycle – as they became cheaper to develop. Hence, they always ended up with profit. They’re planning the same with Playstation VR. President of Sony Worldwide Studios, Shuhei Yoshida-San recently said in public they are treating VR as another PlayStation launch. The loss they incur from selling the headset at a lower price might already be included in their development costs. They speculate to make profit on the software sales of games to make up for what they initially loose on the hardware. They already revealed 50 VR games before the end of 2016 with 230+ developers working on titles to grow the library.
My curiosity is thus forth focused on how much of their marketing resources they spend on getting the hardware to the public. And how cleverly they market the product. It’s silly to have a favourite in the VR market, in terms of who sells the most. However, PlayStation has a potential leg-up in this branch of the industry, because VR is only playable on the PS4, a console currently in high-demand with an established ecosystem. Playstation‘s risk to enter this branch of the market this early, could pay off favourably if they play their cards right.
Update: I’ve added a section from the list of developers working on Playstation VR titles (since the entire list would take up a tremendous amount of space) :