Oculus Rift teardown shows bill of materials and manufacturing just slightly over 200$

[zMeul]

source: http://blog.ihs.com/oculus-rift-teardown-shows-vr-headset-design-to-be-intricate

via: http://www.roadtovr.com/oculus-rift-components-cost-around-200-new-teardown-suggests/

 

Quote

The Oculus Rift virtual reality (VR) headset sports a complex mechanical design with semiconductor content supplied by a wide array of manufacturers, and the headset accounts for the single biggest part of its overall manufacturing cost, according to analysis performed by the Teardowns & Cost Benchmarking team of IHS Markit Technology.
As only one of a few virtual reality headsets available in the market today, the complex design of the Rift is to be expected given VR’s ambitious agenda in seeking to provide an immersive gaming and entertainment experience. However, opportunities may come in the future to simplify design. Most products, after their initial production run and market rollout, tend to go through some form of design review that results in a more elegant solution to previously thorny issues. The Rift headset contains a tremendous amount of mechanical and electromechanical components, and some consolidation here is expected in the future as the product evolves.

 

Rift's main board:

Spoiler

Rift's sensor PCB:

Spoiler

and the estimated bill:

Spoiler

 

the retail price for the Rift is 600$ (including shipping)

 

so, it looks like FaceBook is making quite a huge profit on the Rift

normally I wouldn't have a problem, it's a buyers market .. but! they also make money from the software they sell on their store - it would stand to reason that for VR to seriously take off, they could've sold the unit at a lower price, still reserving some profit margin

if I recall right, Palmer Luckey originally hinted at a ~400$ price for the Rift, that would've been more in line with the original view of what Oculus Rift supposed to be

 

following that original price, plus a system paired with a RX480 or GTX1060, could've potentially brought VR to mainstream consumer - but they had to get greedy 

 

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here's the deal on why I think FaceBook got greedy - it not because "early adopter's fee" nor is it because of Reasearch and Development (since you know ... allegations that both Carmack and Luckey "stole" tech from their previous employers)

consoles .. fucking consoles!

both SONY and Microsoft sold this generation of consoles at a loss: http://www.pcmag.com/article2/0,2817,2427757,00.asp they made their profits of the software

those didn't had R&D costs? wages to pay? no ?!?!

and I'll be darn, they're still around and kicking - SONY sold 40+mil of the darn things (PS4): http://www.ubergizmo.com/2016/04/sony-40m-ps4-sold/

 

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speaking of R&D ... what R&D ?!

Carmack stands accused by Zenimax for stealing source code when he left for Oculus; there is a Zenimax vs FaceBook suit: http://www.roadtovr.com/facebook-ceo-zuckerberg-to-testify-in-oculus-vs-zenimax-lawsuit/
Luckey himself was accused by his former employee of stealing know-how when he started the Oculus kickstarter: http://venturebeat.com/2016/01/19/oculus-vr-founder-palmer-luckey-must-face-breach-on-contract-lawsuit-judge-rules/

Edited July 30, 2016 by zMeul

[AresKrieger]

Honestly I want the rift to fail since I hate facebook, so if they want to sell it overpriced and thus get less sales/adoptions overall let them it's not like the first gen of VR really performs well enough for me to care anyway tbh.

[vorticalbox]

if you ignore Research and development costs and the cost of manufacturing sure. Huge profit.

[mathmeister]

You have to account for all that R&D and a couple other factors. Yeah the markup is high but I wonder how much the Vive costs to make.

[Ichi]

Need to see the cost for Vive then we can have this discussion.

[Rohith_Kumar_Sp]

alright ppl, lets just forget about all the RnD and all the old prototypes that they worked on to make this thing and like forget all the software developed for it and basically forget about all the marketing costs and money spent on supporting it. 

[zMeul]

2 minutes ago, vorticalbox said:

if you ignore Research and development costs and the cost of manufacturing sure. Huge profit.

what R&D? they are not making space rockets, everything in a VR headset is already available in one form or the other

mind you, the prototype used smartphone screens

 

the only development is done software side, and they already make money on that

[abhigyan001]

There is Research and Development cost which they HAD put in. There is Labour and salaries of Manager, Supervisor etc. There is advertising. Other manufacturing costs (repairing machines at factory, paying for electricity and water etc at factory, etc) And then there is profit. 

 

You really think it's alot?

[vorticalbox]

Just now, zMeul said:

what R&D? they are not making space rockets, everything in a VR headset is already available in one form or the other

mind you, the prototype used smartphone screens

 

the only development is done software side, and they already make money on that

as @Rohith_Kumar_Sp just pointed out what about marketing too? you think its cheap throwing parts together then endlessly testing fir errors? then add in the cost of the developers and all the work they have to put in.

 

[Humbug]

err what about all the R&D, all their overheads, and the cost of hiring industry veterans including the likes of Michael Abrash and John Carmack.

They took years to get to this point.

[zMeul]

Just now, vorticalbox said:

as @Rohith_Kumar_Sp just pointed out what about marketing too? you think its cheap throwing parts together then endlessly testing fir errors? then add in the cost of the developers and all the work they have to put in.

I haven't touched the SW side and won't touch it

 

the HW cannot be fixed once it's delivered, it can only be recalled

 

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they are making huge profit on each Rift sold and they are making profit on the SW that goes trough their Oculus store - otherwise it would've failed already

[zMeul]

3 minutes ago, Humbug said:

err

don't get me started ...

I'm guessing you're already aware Carmak was accused by Zenimax for stealing their source code - and there is a lawsuit against FB for this

so .. when you talk about R&D ... what R&D?!?!

 

if I recall, even Luckey was accused by his former employee of stealing VR tech or know how before he went on kickstaring Oculus

[abhigyan001]

Just now, zMeul said:

don't get me started ...

I'm guessing you're already aware Carmak was accused by Zenimax for stealing their source code

so .. when you talk about R&D ... what R&D?!?!

It takes money to buy stuff to make prototypes. 

[zMeul]

2 minutes ago, abhigyan001 said:

It takes money to buy stuff to make prototypes. 

I'm guessing you conveniently forgot there was a kickstarter that got them nearly 2.5 mil USD?!

and they sold out to FaceBook for 2bil USD?!

 

ha!

[abhigyan001]

Just now, zMeul said:

I'm guessing you conveniently forgot there was a kickstarter ?!

Okay even if you minus R&D. Look at my comment above. It'll explain.

You clearly don't seem to know how industries work.

[Humbug]

8 minutes ago, zMeul said:

don't get me started ...

I'm guessing you're already aware Carmak was accused by Zenimax for stealing their source code - and there is a lawsuit against FB for this

so .. when you talk about R&D ... what R&D?!?!

What I know is that Zenimax accused Carmack of starting VR R&D while he was still employed at id.

Carmack admits this. But says he didn't steal any code.

I think we don't have any facts apart from that right? Are you saying that Oculus didn't do R&D. I know they got a lot of R&D from Carmack and from Valve but I don't think they were idling for years either.

9 minutes ago, zMeul said:

they are making huge profit on each Rift sold

-they have offices

-they pay employees

-they created and maintain oculus home software and SDK+API

-they pay 3rd party devs for store exclusives

-as mentioned above they spent years on R&D and prototyping

[Derangel]

2 minutes ago, zMeul said:

don't get me started ...

I'm guessing you're already aware Carmak was accused by Zenimax for stealing their source code - and there is a lawsuit against FB for this

so .. when you talk about R&D ... what R&D?!?!

You have no fucking clue what R&D actually is, do you? They spent several YEARS developing various prototypes, researching how to combat motion sickness, testing what the best solutions would be for CV1. Developing, what four different prototypes that they showed off. Only one of which was covered by their Kickstarter (and likely not even fully covered by it). You don't have to fully develop all of your own hardware to have R&D costs, you just have to do RESEARCH and DEVELOPMENT of any kind.

[Technous285]

$2.5M USD Kickstarter ≠ $2.5M USD pure profit.

You lose 5-10% of that in Kickstarter's fees alone, then the chargebacks/cancelled pledges, then conversions.... And that's before spending the cash to buy the parts and print the PCB's to get the initial prototypes done to start work on the dev kit runs.

[zMeul]

7 minutes ago, Humbug said:

What I know is that Zenimax accused Carmack of starting VR R&D while he was still employed at id.

Carmack admits this. But says he didn't steal any code.

the suit started in 2014, if I recall; the judge already deneid FB's motion to dismiss

and last I heard, Zuckerberg testified

 

no merit? I think there's plenty

 

and Total Recall Technologies suit against Luckey himself!?

 

this whole company was built on shady "stuff"

 

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last time I talked about the ridiculous prices of VR headsets I compared them with consoles

SONY and MS made a loss on each unit sold, their big income comes from the software: http://www.pcmag.com/article2/0,2817,2427757,00.asp

[Sparviero]

Not stealing per se'depending on the case. That the code or idea was while in contract with the other company. Therefor the company they where employed by should have the intellectual property. 

 

OR did a few rounds of VC and FB paid a pretty penny so yes for the accountants there is quite the fixed cost  attached to each unit. I haven't looked however I'm sure we would find this all fits under GAAP. 

 

I sometimes wonder if Occulus' greatest sin was trying to have a competing service to Steam. I say this having a DK2 and canceling a Rift preorder because I have decided to wait things out and avoid another painful early adopter tax.

[dizmo]

It's nice to see everyone's pretty much on the same page, and realizes that there are a lot more costs involved in bringing a product to market than just a simple BOM. It wasn't too long ago everyone would be crying that it didn't cost what $249!!

 

19 minutes ago, zMeul said:

what R&D? they are not making space rockets, everything in a VR headset is already available in one form or the other

mind you, the prototype used smartphone screens

 

the only development is done software side, and they already make money on that

Errmm...right. I don't think you quite get how hardware is designed.

18 minutes ago, abhigyan001 said:

There is Research and Development cost which they HAD put in. There is Labour and salaries of Manager, Supervisor etc. There is advertising. Other manufacturing costs (repairing machines at factory, paying for electricity and water etc at factory, etc) And then there is profit. 

 

You really think it's alot?

To be fair it's extremely unlikely they have their own factories to manufacture it.

But the rest is spot on.

[Derangel]

Just now, zMeul said:

the suit started in 2014, if I recall; the judge already deneid FB's motion to dismiss

and last I heard, Zuckerberg testified

 

no merit? I think there's plenty

 

and Total Recall Technologies suit against Luckey himself!?

 

this whole company was built on shady "stuff"

You're making claims based on what? Hearsay?. A couple companies that may or may not be telling the truth or are just after a piece of the Facebook money? Unless you have actually seen the evidence and have actual knowledge of what went on you are making broad judgments based on nothing more than your own, likely incredibly bias, opinion. In other words: You're pulling your opinions out of your ass. If FB decides to settle out of court for assloads of money or they lose the cases, then there will be something to go on.

[Humbug]

1 minute ago, zMeul said:

the suit started in 2014, if I recall

the judge already deneid FB's motion to dismiss

and last I heard, Zuckerberg testified

 

no merit? I think there's plenty

 

and Total Recall Technologies suit against Luckey himself!?

 

this whole company was built on shady "stuff"

what do you think that Carmack did which was wrong?

[zMeul]

9 minutes ago, dizmo said:

Errmm...right. I don't think you quite get how hardware is designed.

I don't!?!!?

check my post above where I talk about SONY and MS selling their latest consoles at a loss 

do you know how many PS4 units SONY sold to date? above 40mil units: http://www.ubergizmo.com/2016/04/sony-40m-ps4-sold/

in two and 1/2 fucking years!

 

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as for VR, the analyst's predictions have already been "downgraded" couple of times

 

 

[Tech_Dreamer]

rift into those profits occulus!