Is Meta Quest 3 subsidized? One analysis suggests so

Is Meta Quest 3 subsidized? One analysis suggests so

According to a group of Chinese analysts, Meta is likely to sell Quest 3 at a loss, or at least not make much money from hardware sales.

The same group has previously published detailed bills of materials for Quest 2, Quest Pro and Pico 4. In their latest report, they estimate that the components of the Meta Quest 3 alone cost an estimated $398 per headset. Combined with manufacturing costs, the price should be around $428, according to the group. Add in taxes, and the estimated cost per headset is $478, R&D and marketing costs not included.

Meta sells the 128GB version for $500 and the 512GB version for $650. Profits are therefore mainly made with the larger model and overpriced accessories.

Please keep in mind that only Meta and its hardware and manufacturing partners know how much the components and production really cost. The price depends on the number of units produced, which is also estimated by the analysts.

Qualcomm earns well from Meta Quest

The group also provides a list of estimated costs for key components and controllers:

  • Mainboard with SoC: $150
  • SoC: $90
  • Displays (2): $80 US
  • Pancake lenses (2): $50
  • Cameras: $39
  • RAM: $18
  • Controllers (2): $33

The most expensive component is the new Qualcomm XR chipset. With additional Qualcomm chips in the Quest 3, Qualcomm earns almost $100 per headset, according to the analysts. A lucrative business for the chipmaker.


Meta vs. Apple: two companies, two approaches

Meta's goal is to sell as many headsets as possible as quickly as possible, and the company is willing to subsidize them aggressively to do so. Meta Quest 2 offered fabulous value at launch and beyond, and the same is true for Quest 3 today. Similar to Sony and Microsoft consoles, the revenue is not made from hardware, but from software sales and platform services. An exception to Meta's pricing strategy was the Quest Pro, which was considered to be grossly overpriced and flopped so badly that Meta cut the price by a third and gave units away to developers.

Competitor Apple has a completely different strategy, courting customers with high-end technology instead of affordability. For the price of one Vision Pro, you can buy seven Meta Quest 3s, which means Apple is probably selling Vision Pro at a decent margin.

The industry is currently at these two extremes. It will be interesting to see which approach is more successful and whether Meta and Apple will one day meet in the middle on price.

Sources: Wellsenn XR