Valve's long-awaited in-house headset pushes VR technology forward at a premium price.
“Five hundred and ninety-nine U.S. Dollars.” As the price of the PlayStation 3 spilled from former Sony CEO Kaz Hirai’s mouth on an E3 2006 stage, he had no idea that Sony would spend nearly an entire generation trying to recapture the magic of the PlayStation 2 era.
Valve is the latest to test the gaming audience’s reaction to sticker shock with a $999 starter bundle for its upcoming high-powered Index VR headset.
The VR segment is much younger than the console market, and it’s about to go through another test of price sensitivity. When the Oculus Rift and HTC Vive launched, the price was an unknown. The cost of VR was established at $800 bottom-line for head-mounted display (HMD) and controllers (separately for Rift or bundled for Vive).
In addition to early adopter pricing the first wave of consumer HMDs in 2016 required a top-of-the-line PC, making the all-in price for VR somewhere in the neighborhood of $2,500 - $3,000. Now that the first generation is behind us, we’re starting to see high-quality VR pricing shift downward.
Oculus Go is an affordable $199 and doesn’t require a phone like the Samsung Gear VR. It also doesn’t feature six degrees of freedom, an important factor in immersion. However, that price point is a welcome mat for those curious about the technology but unwilling or unable to spend on a tethered, high-fidelity product.
High-end VR prices are about to drop significantly with the upcoming release of Oculus Rift S (an upgrade to the original Rift rather than a complete overhaul) and stand-alone Oculus Quest, both carrying a $399 price tag, inclusive of controllers. Additionally, the PC requirements are similar to what they were in 2016, meaning building a VR-ready PC is significantly less expensive. The barrier to entry is lower than ever.
Valve has taken things in another direction, though. The Index appears to be the most powerful piece of consumer VR tech yet with a 120Hz refresh rate (compared to Rift’s 90Hz, Rift S’s 80Hz, and Quest’s 72Hz).
VR makers are typically shy when it comes to discussing field of view (bigger is better), because the distance of the lenses from the eye can cause this number to vary user to user. The original Rift is about 110 degrees, as is the Vive. PlayStation VR is about 100 degrees. Oculus says the Quest is the same as Rift, with Rift S improving the FOV slightly. Valve isn’t being specific about the Index, but told Upload VR that it provides an additional 20 degrees beyond the Vive, which puts the Index's potential FOV at about 130 degrees.
With regard to resolution, Index stacks up well against the competition. The spec sheet indicates that it will deliver 1440x1600 per eye. That’s the same as Oculus Quest, a hair better than the prosumer Vive Pro (1400x1600), and significantly better than the Rift S (1280x1440) and original VIve (1080x1200).
The Index is no doubt going to be an impressive VR kit, especially with its approach to wearable controllers that strap onto your hands, but it also carries a premium price. For those jumping into VR for the first time, Index will cost $999 for a bundle including the headset, two controllers, and two “base station” sensors.
The Index still requires external sensors, while the Rift S and the Quest use what’s called “inside-out tracking” (sensors on the HMD that detect the environment and the user’s hands via tracking strips on the controllers). HP also has an inside-out HMD on the way, called the Reverb, which sports 4K resolution (2160x2160 in each eye) and includes two controllers, though refresh rate is only 90Hz. It’s priced at only $649.
If you have an HTC Vive or a Vive Pro’s base stations, the price is more in line with what other manufacturers are charging. $749 is still the priciest of the HMD-plus-controller bundles.
Valve is betting on the strength of the Steam platform to help move headsets. Remember that PC users tend to look at hardware investment differently than console players. Price sensitivity among those that typically play in their living room caps at $500 (as Kaz Hirai and Sony found out the hard way). PC players tend to go bigger, with $2,000 in gaming PC startup costs and $1,000 graphics card upgrades the norm. Rift S, Index, and Vive only require an Nvidia GTX 970 (now available for under $500 new and even less refurbished), dropping the overall cost of entry.
Valve is clearly shooting for the early adopter PC enthusiast market that is (almost slavishly) devoted to the Steam platform. Whether there are enough of those consumers in the $6.6 billion XR market (which also includes augmented reality and mixed reality, as well as software) is a gamble Valve seems willing to take.
By contrast, the Quest is fully standalone, welcoming new VR users into the space at only $400 for the model with 64GB of memory and $500 for the HMD with 128GB. This is a console-style approach, requiring only an iOS or Android mobile phone to activate and then operates as a stand-alone unit.
This second wave of high-end VR hardware is a major test for the segment. Oculus, HTC, Valve, and PlayStation (which confirmed that the PSVR will work with the PlayStation 5) all weathered the relatively weak start for consumer VR adoption.
What we don’t know yet is whether consumers respond to price accessibility or improved fidelity at a higher cost? Is there enough consumer interest in virtual reality to support both? Will untethered, full-featured VR (like users will find in the Quest) push the segment closer to the tipping point, or will the gaming community dig its heels in, choosing flat-screen gaming definitively?
There’s no denying that VR offers unique experiences that can be imitated, but not replicated on a traditional screen. That truism and lower pricing might finally be enough to convince gamers that VR are worth their time and limited budget.
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