The Oculus Rift has pulled ahead of HTC Vive for the first time ever in the monthly Steam hardware survey. It now has 47 percent of hardware usage versus Vive’s 45 percent. This isn’t absolute market share but it’s a telling sample.
What this really tells us is that Oculus pricing strategy could be working. As we’ve examined, Oculus has the luxury (read: Facebook) to apply loss-leader pricing. This is essentially to sacrifice margins for market share in order to to execute a longer-term platform strategy.
As platforms go, the name of the game is gaining early consumer market share. That in turn attracts developers to build content for the platform, which then attracts more users: A virtuous cycle. It’s also a play for network effect — something that Facebook knows well.
HTC conversely doesn’t have the same pricing leeway, as its business model is based on hardware margins. This is essentially why the Rift is $399 and HTC Vive is $599. And Oculus Go will be here any day with a $199 price tag, which could really give VR the boost it needs.
That $199 is right in the sweet spot of consumer demand, according to our survey data. And Oculus Go will be purpose-built for VR, as opposed to mobile VR rigs like Gear VR who’s main component (smartphone) is tuned and optimized for phone functions rather than VR.
There will also be lots of content available for Oculus Go — basically most of the Oculus Home content and games that are available for Gear VR. This will be a big factor in driving it’s growth. Back to our VR survey data, price and content are the two biggest adoption drivers.
Expect more aggressive price competition and market share gains from Oculus. That will be a good thing to not only grow it’s platform, but grow the overall VR industry and drive toward’s Mark Zuckerberg’s goal of $1 billion global VR users. We’re far from that goal but inching closer.
Disclosure: ARtillry has no financial stake in the companies mentioned in this post, nor received payment for its production. Disclosure and ethics policy can be seen here.
Header image credit: Oculus