Facebook can no longer use the Meta Quest 2 as an excuse to be impoverished.
Over the years, Facebook has made some dubious moves. This isn’t surprising, given the platform’s origins as a tool to “rate” gorgeous women without their permission or knowledge. It’s nevertheless true that the corporation has made some stunning failures, from data mismanagement to deadly disinformation dissemination. The Meta Quest 2’s price has gone up by $100, adding to the company’s long history of misfortunes.
Facebook, as Meta, defended its expensive decision in a tone-deaf blog post:
Product manufacturing and shipping expenses have been rising, says a company blog. The price of Quest 2 has been lowered so that we can increase our commitment in cutting-edge VR research and new product development.
On August 1, the Meta Quest 2 VR headset’s 128 GB variant will cost $399 instead of $299, while the 256 GB model will cost $499 instead of $399.
A whole lot of nothing
Facebook has decided it’s time to raise the price of a luxury commodity by a stunning 33 percent at a time when customers are struggling to pay for food, petrol, medicine, childcare, housing, and energy. The Meta Quest 2 you buy in August is the same one you’ve been able to buy since 2020, so keep that in mind. To be honest, it doesn’t do anything better or give anything new; it only costs more.
You can obtain a free copy of Beat Saber, a $30 game, with the purchase of Quest 2, but it doesn’t make up for the increase in cost. However, (Beat Saber is a decent game.)
Until now, the Tom’s Guide team hasn’t seen anything like this. To our knowledge, no manufacturer has raised the price of a console without also adding new features since Nintendo resurrected the home console business in 1983. Conventional video game systems are often considered to be loss leaders. Consumers spend a great deal of money on related products and services because they open the floodgates for them to do so.
Furthermore, the idea that Facebook would blame supply chain concerns on poverty is absurd. No doubt, as Facebook states, the Meta Quest 2’s production and shipping expenses have gone up. It’s not just Facebook that suffers from the same issues. None of the big three console makers have said they have no choice but to raise their pricing. Boutique console producers like Analogue or Hyperkin, which do not have Facebook’s enormous war chest to fall back on, do not engage in this type of conduct.
Hardware manufacturers in other industries have tried to pass supply chain costs on to customers. There has been a rise in the price of CPUs, GPUs, laptops, and vehicles. If you look at the home console market, this kind of price hike is rare, and it’s unlikely to be something that gamers were thrilled to see.
Running the numbers
Let’s look at the numbers. Net income for Meta in the first quarter of 2022 was roughly $7.5 billion, according to Meta’s Q1 2022 earnings report. This is the company’s net profit, not its total revenue, which was around $28 billion in this case.
Since its October 2020 launch under the Oculus Quest 2 and Meta Quest 2 brands, Meta has sold approximately 15 million Quest 2s. That works up to an average of 714,286 units a day. Even if Facebook had to spend an extra $100 on each item supplied, which is absurd, but let’s pretend it does for the sake of argument, the business will have to spend $214,285,800 in the next quarters.. About one-third of Facebook’s quarterly profit is accounted for by this transaction.
Facebook’s stats are not quite as good as the solitary Q1 study may suggest, though. During the past six months, Meta Platforms’ stock price has dropped from $323 to just over $159 per share. However, VR headsets could help counterbalance this loss, but the idea appears more likely to enrage customers than it is to calm investors down.
It’s still possible for Facebook to take on the entire Meta Quest 2 cost increase and still walk away with $7.3 billion. It’s insulting to try to impose this fee on consumers. It’s almost dishonest for the corporation to say that it’s doing this for the benefit of the VR industry as a whole.
Monopoly money
In fact, Meta runs the risk of becoming a victim of its own success with this $100 price increase. Despite the fact that virtual reality is still a limited market, the Meta Quest 2 has made it considerably more accessible in recent years. The VR market rose by 92% between 2020 and 2021, with the Meta Quest 2 accounting for around 80% of the increase. The Quest 2 is the most popular virtual reality headset on the market.
As a result, the Meta Quest 2 can be considered a leading indicator for virtual reality in general. That’s why Facebook’s blog article has some value.. sort of. Investments made by the company could have a significant impact on the VR sector as a whole. It is possible that the company’s missteps could have an equally significant impact on its future success.
Virtual reality has never been closer to widespread success than it is now. However, it has a long way to go before it can compete with the likes of traditional console and PC gaming. More than 75% of adults have never used virtual reality technology. Most gamers do not own a VR system, and even fewer do not utilize their headsets on a regular basis.
Everyday people’s desire to purchase a VR headset will be the single most critical component if VR is to become as popular as home consoles in the coming years. One of the world’s richest corporations offers a $100 markup on the same product, even though it could easily pay the cost, which makes a significant statement about virtual reality — especially since no other major game firm has ever performed the same trick.
In the end, Facebook’s risk may pay off. Consumers have been scrambling to get their hands on Meta Quest 2s since the business announced a price increase. It doesn’t matter if Facebook sells a smaller number of Meta Quest 2 consoles in the future; the money will continue to flow in as gamers buy games and accessories for the device.
There is a further complication because the Meta Quest 2 is an excellent piece of gear. The Meta Quest 2 is now our favorite virtual reality headset because of its solo capabilities and inexpensive price. Quest 2 will still be significantly less expensive than the Valve Index and within striking distance of PlayStation VR, even after a $100 price hike.
However, ordinary people shouldn’t have to pay for one of the world’s most powerful IT corporations. In the past, we’ve allowed Facebook to run roughshod over issues like data privacy and security. Even in the gaming industry, precedents can be formed without our consent.