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Comment by trixie_ | Hacker News Reader

It's a strange move given Facebook changed their name to promote VR and the Quest is their flagship device. Also surprised that after mass producing this device for almost 2 years their manufacturing and supply chain costs aren't dialed in enough to maintain the current price. The message here is that VR is 'failing'. I hope it's not, but that's the message with this backwards move.

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I suspect the quest 3 is more expensive to produce than the 2 so they’re raising prices now so that they can price the 3 the same as the 2 on launch. They may also want people to wait for the 3 because they feel it’ll do a better job of showcasing vr potential.

Isn't this cutting off your nose to spite your face?

Usually, but Meta already has a timeline for VR into the end of the decade.

They want users to continually be on their latest experience to achieve an eventual platform monopoly

I think not really. Quest 2 is not feature complete because it lacks core social features like color passthrough cameras, eye tracking and facial expression tracking. I’m guessing Meta thinks those features are so critical to their Metaverse experience that they are willing to forgo sales in the short term.

I just read a thread from 2021 on reddit yesterday where an Oculus employee said that they wouldn't be adding color passthrough cameras, and that the current cameras worked on ir and likely would for a while. I'll see if I can dig it up, but it seems like color passthrough isn't going to be on the menu for the 3.

I'd love the link if you can.

https://www.reddit.com/r/OculusQuest/comments/n6xuwo/demeo_w...

It’s the first comment chain in this link

I think that color passthrough is confirmed on the Quest Pro. Your linked comment from Reddit seems to be raising the issue that the cameras will be fixed focus and will still be a second rate AR experience. I don’t know what is planned for the Quest 3 as that is still at least a year out.

I heard the Quest 3 or Quest Pro will be almost twice as much as Quest 2.

"Current price" Seemed to be purely invented to move units. The hardware margins had to be very large negative numbers. They were losing $2.5B/Quarter for the last two years. To put it in context, the specs of a base Quest 2 are actually somewhat similar to Microsoft's $1000 Surface Pro X or a Galaxy S20 but adding the motion controllers and the specific ground-up custom OS.

> specific ground-up custom OS

There are no doubt huge changes made, but Quest 2 runs Android underneath.

They were building a custom OS for VR/AR, but development of it was slashed earlier this year.

Sorry yeah absolutely, I intended to frame it as they have effectively thrown out pretty much all of the Android UI/UX along with building an app store from scratch.

To be fair, this isn't like Amazon's "fire OS" where they just added a launcher app and randomly broke some APIs on accident. It's a pretty substantial addition to/departure from stock Android

They were taking massive losses on Quest 2. So this is a sign that the VR division is needing to tighten some belts on the losses, or that manufacturers have raised prices that this is required for them to maintain same Loss ratios and there wasn't stomach to take even further hits.

Given the stated focus of the company (to the point of renaming to highlight VR focus) I would imagine it's the supply side of the equation.

Also another callout is that I believe Quest 2's have been getting passive upgrades, with newer models having more base storage and other small enhancements.

Another callout is that its common wisdom that advertising is first to be cut during recession, so this might be pre-emptive belt tightening sense their projections show its not palatable anymore to take the same level of loss.

And there was an issue with massive recall of Quest 2 headsets last year, it surely did hit their bottom line.

I can’t shake the feeling this is more the canary in the coal mine that by this time next year you’ll be paying more for PS5, Xbox, Switch iPhones etc even if the tech inside is exactly what’s on sale today.

new games are starting to retail at $70 usd compared to $60 previously... that was the canary and this is the lightheaded feeling of carbon monoxide poisoning

To be fair, games have cost that much since like 2008. Inflation in most developed countries has been much higher 16 % ofter that decade and a half. In the US the CPI has risen by 36 % over that period, so the real price of games is still lower than it was.

Games have been 60 since around 2005. People were paying $90 in 2022 USD for the original Halo, which makes $70 easier to stomach

Obviously, since inflation right now is hovering around 10%.

It doesn't mean VR is failing. It's because the entire global economy is in a massive downturn hurting profits of all companies and Meta decided they should not subsidize the headset cost anymore.

People keep saying this but i really don't see it: we have only one quarter of reduced GDP growth, unemployment is near record lows, corporate profits are strong or merely stung by supply chain issues.

Where is this giant recession?

Equity prices are not representative of economic performance, and needed to be corrected anyway...

Almost all large companies doing huge layoffs.

Projected famine.

Record breaking inflation.

Big increase in homelessness and crime.

Some countries absolutely falling apart.

Other countries just "too big to fail" (but not to big to threaten WWIII).

You and I live in parallel universes apparently.

We don’t know how much their BOM increased. They likely were either losing money or not much margin, and with the market going downward they probably couldn’t afford to offset it as much anymore.

Imagine where Uber would be today if they wanted to stop losing money so early in the game.

Early? They’ve been selling in the market for over 6 years now.

Yeah early as in early in market domination.

And they're still losing money with no path towards profitability or market domination?

Yeah don’t disagree. But how will increasing the price help them?

You asked

> Imagine where Uber would be today if they wanted to stop losing money so early in the game.

Well if they stopped they could have lost less money

They could switch from UTF-8 to UTF-16 to decrease their BOM by 33%.

All consoles (ok maybe not old Nintendo handhelds) are sold at a loss in order to create the platform and the console maker makes the revenue on licensing fees on software and accessories.

FB shouldn't have to raise the price if they're making money selling games for the Quest. I guess they're not selling games.

> Also surprised that after mass producing this device for almost 2 years their manufacturing and supply chain costs aren't dialed in enough to maintain the current price.

Given the across-the-board inflation and supply chain havoc why would you expect this?

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