Meta’s (META) VR headsets are getting a big but perhaps inevitable price cut, largely because consumers just aren’t buying as many as expected.
The company announced today that it is dropping prices for its still-new Meta Quest Pro from $1,499.99 to $999.99, while its Meta Quest 2 is dropping from $499.99 to $429.99. For Meta Quest Pro, which was touted as enterprise-focused when it launched, that’s a drop of about 33% — and a notable drop from the fanfare it’s thrown at in conjunction with support from Microsoft (MSFT) and Accenture (ACN ) was introduced ).
Declining consumer interest isn’t a meta-specific issue — the VR market, and the gaming industry as a whole, saw revenue decline 2% year over year to $1.1 billion in 2022, according to research by NDP. But the company is struggling to even attract new headset owners to the product. (Meta VP of VR Mark Rabkin recently broke the news to staff, according to a Feb. 28 report from The Verge.)
“Unfortunately, the newer cohorts that are coming in, the people who bought it last Christmas just aren’t as excited as those who bought it early,” he said, per The Verge.
Ramon Llamas, Research Director of IDC, said: “The market for used and refurbished equipment allows consumers to get in at a lower price and if we count the specter of inflation, consumers are smart and will find a way to avoid that.” get what they want to get less”
He added, “This is part of a macro movement, particularly as I feel it’s too early for me to say they’re cleaning up the Quest 2 inventory given Quest 3 doesn’t show up until the end of the year.”
A person uses a virtual reality headset at the Meta booth during the Ninth Summit of the Americas in Los Angeles, California, U.S. June 8, 2022. REUTERS/Mike Blake
High stakes
Meta has sunk a lot into its pursuit of VR. Reality Labs, the company’s Metaverse operation, lost billions in the last year alone – according to Meta’s latest earnings report, it lost a whopping $13.7 billion to Reality Labs in 2022, up from the roughly $10.2 billion it lost which it had lost by division in 2021.
The story goes on
Losses aside, what Meta has been spending on VR has given it “a very firm grip on the VR device market” as they’ve held 45% to 82% of VR market share over the past year, according to Llamas. It’s still an emerging market, however, and if they want to keep their lead, the game for them right now, he says, is more heads in sets.
“If I’m Mark Zuckerberg and I want people to be included in the meta-family, the easiest way to do that is to drop prices,” Llamas told Yahoo Finance. “The more people on board, the better.”
Allie Garfinkle is a Senior Tech Reporter at Yahoo Finance. Follow her on Twitter @agafinks and on LinkedIn.
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