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

[Zeeee]

LMFAO look at all the salty people defending OCULUS for the prices because they dont wanna know that their product that they paid 600 for is only worth 200 aweeh thats cute but it shows all over your texts. BS, all these claims of how expensive it is to manufacture using a factory... yeah im sorry did we not already PAY that with the kickstarter or was that money spent on booze and drugs? If it was then youre god damn right we got the right to bitch about the prices. LOL i mean FACEBOOK OWNS IT lool as if they are a new comapany who need the 400$ profit on each to stay afloat give me a damn break. If the cost was 300, 100 more than cost to make and it sold in the 10s of millions theyd be hella successful then. In many other ways than just the profit off the device.

[Derangel]

6 minutes ago, Zeeee said:

LMFAO look at all the salty people defending OCULUS for the prices because they dont wanna know that their product that they paid 600 for is only worth 200 aweeh thats cute but it shows all over your texts. BS, all these claims of how expensive it is to manufacture using a factory... yeah im sorry did we not already PAY that with the kickstarter or was that money spent on booze and drugs? If it was then youre god damn right we got the right to bitch about the prices. LOL i mean FACEBOOK OWNS IT lool as if they are a new comapany who need the 400$ profit on each to stay afloat give me a damn break. If the cost was 300, 100 more than cost to make and it sold in the 10s of millions theyd be hella successful then. In many other ways than just the profit off the device.

 

The Kickstarter was for the DK1, the first development kit. That Kickstarter was four years ago. The Kickstarter also VERY likely didn't even cover the development of the DK1. Even Oculus got 100% of the money from the Kickstarter (which they didn't) $2.4m is a pretty damn small amount of money to develop hardware. Oculus had to reach out to private investors and get additional funding from them. I'd bet a pretty decent amount of the money Facebook paid for Oculus went to pay back investors and give them the returns (profit) they were promised. Just because Facebook has a ton of money doesn't mean that R&D is free, nor does it mean that they're going to just burn the money and not expect to make it back.

 

Even ignoring that part cost is not manufacturing cost. You clearly know fuck all about what actually goes into manufacturing. Parts are cheap. Labor and, especially, distribution is where you eat a ton of cost. Even with assembling in China, it isn't exactly a small sum. Significantly cheaper than doing it in other countries, but that doesn't make it an unnoticeable cost.

[WereCat]

Hardware cost

Research and Development

Manufacturing cost

Marketing

Salary for people that work there

Software Development

Warranty

Profit margin

 

I am sure I forgot some other things ... but it sure is way more than $200

 

[Sakkura]

40 minutes ago, WereCat said:

Hardware cost

Research and Development

Manufacturing cost

Marketing

Salary for people that work there

Software Development

Warranty

Profit margin

 

I am sure I forgot some other things ... but it sure is way more than $200

 

And it's worth reiterating that they didn't even include all the hardware in their cost estimates. They forgot the lenses, one of the most expensive parts of the headset.

 

Plus they're so incompetent that they think the Oculus Rift is used with consoles. These guys have no clue, and their estimate should be ignored.

[Thony]

This "cost to make" evaluations are so pointless now. 90% of people KNOW things are cheap to make. But the idea, marketing, execution, delivery are what makes it so damn expensive. 

[DXMember]

22 hours ago, mathmeister said:

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.

R&D was supposed to be covered by KickStarter and Zuckenberg's big pockets

that shit's crazy expensive yo' for what it is

OSVR all the way!!!

[Prysin]

OP is whining about things OP doesnt know shit about. OP is quoting out of context. OP is accusing global company of plagiarizing without proof.

#Zmeulthread

 

[Sakkura]

1 hour ago, DXMember said:

R&D was supposed to be covered by KickStarter and Zuckenberg's big pockets

that shit's crazy expensive yo' for what it is

OSVR all the way!!!

The Kickstarter was supposed to cover the R&D and manufacturing costs for the DK1. It had nothing to do with the subsequent DK2 or CV1.

 

The "shit" is not crazy expensive for what it is, especially not if you want a VR headset with lenses in it.

 

OSVR is priced similarly to the Oculus devkits that offered similar hardware. So if Oculus is ripping people off, so is Razer.

[0ld_Chicken]

Every job I've ever worked at (14 years of working) I've been a part of selling/distributing products that have a higher profit margin than OR, even if you ignored ALL other costs that went into OR.

 

 Let's see, I started by slanging tacos. Company was paying about .12$ for the ingredients per taco, charging over 1.00$.  I guess I was working for Hitler.

 

Then pizza came along... same deal... just oppressing general public with 10x cost inflation

 

Then I started getting into property management...... oh man..... lookout!! Making another 50% on top of costs!!!

 

HVAC? Holy crap. People pay me 10,000$ to install 2000$ worth of equipment in an afternoon (btw that 2000$ with of equipment i paid for... cost under 800$ to produce) 

 

All of these had others costs associated with the products. The taco place had to pay for the building, the utilities, labor, other  "non-consumable" items. I'm sure they didn't do tons of r&d but I'm sure that got a cut too. Same with the pizza place, they've got to pay drivers, heat the ovens, rent overhead.... you get the idea

 

HVAC? Guess what, on top of everything else, I know how to do it, make it work perfectly and I've got 4000$ in tools to do so. You don't.... that costs money... 

 

Capitalism is a bitch, don't be mad cause she isn't YOUR bitch.  You gotta make her your bitch then you can not care how much OR is charging, cause 600$ ain't shit for a (one of the first) VR headset.

 

Edit: and consoles being sold "at a loss" had absolutely nothing to do with this... at all... the sky is blue, these are my pants, nobody cares.  Those are entirely different products, not original in idea or implementation, made by huge companies in an established market. When a new console comes out, it sells well if it doesn't suck ass. Brand recognition and consoles general popularity will always guarantee that.  VR is a entire different deal. Just cause Chevy Malibu's are sold at a loss doesn't mean Maserati needs to sell theirs at a loss as well. You just can't compare the two

 

[Derangel]

2 hours ago, DXMember said:

R&D was supposed to be covered by KickStarter and Zuckenberg's big pockets

that shit's crazy expensive yo' for what it is

OSVR all the way!!!

The fuck does having Facebook money have to do with wanting to recoup R&D costs? All that means is that they had MORE money to spend on R&D and MORE money that they need to recoup. Do you think Intel doesn't consider the $10 BILLION a year it spends on R&D into the cost of it's products? Facebook is a FOR PROFIT company. They want to see a return on their investment, including money spent on R&D. Why is this such a hard concept for people to grasp?

[NumLock21]

Problem is most think the store just magically gets the things for free and sell it off. No they do not, stores need to buy them first with their own money. And if they can't find a wholesaler, they will need to buy it at retail price. This causes them to increase that price in order to make a profit. Now comes those who don't understand that, and starts looking online, right in the shop to, start price matching. 

Picture yourself owning a pc shop and some came in for a gtx 1080. You got that from retail costing you $600 dollars of your own money, are you going you sell it at exactly $600 or more? Selling at exactly $600? LOL, time to close up shop.

 

[Belgarathian]

Huge gross profit*

 

Gross profit ≠ Net profit

[Tomsen]

OP clearly lack the basic understanding on the process of bringing a product to the market and commercializing it for the targeted audience, economics, business infrastructure, and the technology itself involved.

 

You might as well argue with a toddler about this. 

 

[Prestonification]

I think this thread needs to be locked and deleted. OP honestly doesn't know business. 

[Sakkura]

4 hours ago, BarryPrestonSladeJr said:

I think this thread needs to be locked and deleted. OP honestly doesn't know business. 

Locked, nah, but I'm disappointed the moderators haven't at least made OP remove some of the misinformation. We have @Slick trying to (accurately) inform people about VR, while in the forum people are doing the exact opposite, spreading FUD, lies, misinformation... VR is awesome new tech, it sucks that people are trying to ruin it.

[Mr.Meerkat]

They can be making all the revenue/gross profit but remember, usually those don't factor in R&D (fuck off zMeul for saying there is no R&D on the rift...why don't you try to make a VR headset for us from scratch or even copying a pre existing design?), advertisements and promotions, fixed costs (rent/buying the land, electricity, salaries, water ect.), cost to build the warehouse/factory, hire/buying of machinery ect. The only important figure is profit/net profit as that's how much a business makes from the product after taking all the cost into consideration .

 

This is like comparing a DIY job vs a hired professional. Yes doing it yourself would probably end up be cheaper if you only count the cost of the raw materials but if you add in the time you've spent doing the job and all the tools you've bought to do it, hiring a professional may end up being cheaper while doing the job better than you can so...raw materials is not the whole story unfortunately . 

[Carclis]

I'm not sure about anybody else here but $600 sounds like a great deal when you consider that products like the Samsung Galaxy S7 retail for $700 and are obsolete after a year. There's no way those phones have higher R&D costs than VR headsets.

[Yog]

I'm sure this has already been said, but I'm too lazy to look. This sort of breakdown is good to have but it doesn't factor in the cost of R&D, assembly, software/driver development, customer support, PR, advertising, management costs, etc. I'm sure they're making money, but it's probably less than half of what the OP thinks. Then you have to wonder, is the money just going to the facebook coffers or is it going towards development of future products? You see, these sorts of things aren't as cut and dry as most people think.

[NumLock21]

When writing money. Currency symbol always goes in front of the number not after.

$25 not 25$

The $ automatically means dollar. 

$25 = 25 dollars. Not $(dollar) 25, which makes it sound your only saying $1.25.

 

£25 not 25£

£25 pounds 

Not pound 25

 

[Sky Daddy]

22 minutes ago, NumLock21 said:

When writing money. Currency symbol always goes in front of the number not after.

$25 not 25$

The $ automatically means dollar. 

$25 = 25 dollars. Not $(dollar) 25, which makes it sound your only saying $1.25.

 

£25 not 25£

£25 pounds 

Not pound 25

 

my 2¢

[Sakkura]

27 minutes ago, NumLock21 said:

When writing money. Currency symbol always goes in front of the number not after.

That is incorrect.

 

https://en.wikipedia.org/wiki/Currency_symbol#Usage

[NumLock21]

1 hour ago, Sakkura said:

That is incorrect.

 

https://en.wikipedia.org/wiki/Currency_symbol#Usage

Yeah some go behind, but that depends on the currency.

[Totallycasual]

I miss the days when hardware was sold at cost or even at a loss but they made their profits back on software, now they push both as far as the consumer will reasonably put up with.  

[jaggysnake57]

i love how mods edit some peoples posts that are quite harmless yet leave OPs massively misinformed post alone

[Derangel]

1 hour ago, Newenthusiast said:

I miss the days when hardware was sold at cost or even at a loss but they made their profits back on software, now they push both as far as the consumer will reasonably put up with.

That was only ever the case with consoles and really is only something from the last few generations. Oculus only gets money from software sold on the Oculus store. They get exactly nothing from Rift supported software sold elsewhere. It's not like consoles where a cut of every non-used game sale goes to the manufacturer. It's generally not a great idea to take big losses on niche hardware like this, it can very quickly sink a company.