Quest 2 price increase: Carmack finds Meta's reasons "strange"
Meta Quest 2's price increase came as a surprise. John Carmack is skeptical and criticizes Meta's reasoning.
The Meta Quest 2 will cost $100 more starting in August. Meta cited rising manufacturing costs and sustainability as reasons for the price increase. In order for Meta to invest in virtual reality in the long run, the price had to be raised, according to the official reasoning.
The company reportedly does not make money from sales of the Meta Quest 2. The decision is also likely due to pressure from investors and the difficult situation Meta currently finds itself in.
Carmack sees benefits for consumers
Longtime Oculus engineering chief and current Meta advisor John Carmack finds this framing odd and thinks the rationale will do no good. That's probably because it fails to highlight any concrete benefits. Carmack cites one possible positive development that could occur when hardware subsidies are scaled back.
This is a weird framing that isn't going to do much good. Still, there are some potential consumer upsides to not heavily subsidizing the headsets; the arguments internally around the necessity of maximizing store revenue occasionally conflict with third party business models. https://t.co/Rj6jOOKooy
- John Carmack (@ID_AA_Carmack) July 26, 2022
According to Mark Zuckerberg, the low price of the VR headset is cross-funded by store revenue. This comes from a 30 percent fee on all sales that developers and studios make with VR apps.
Meta's goal of maximizing store revenue occasionally conflicts with third-party business models, Carmack says, probably alluding to Bigscreen. The former Oculus chief technology officer hopes something could change about that - which would have clear benefits for end users.
Bigscreen could show more movies and earn money with them. In the end, VR moviegoers would benefit from this.
Which wins: price or technology?
Carmack is curious to see what impact the price increase will have on Meta Quest 2 sales.
"This will be a very important data point. I have always contended that price of entry is very important, while others are more excited about adding new capabilities at higher prices. Seeing what happens now and with the next headset will say a lot about price elasticity," Carmack writes.
He adds, however, that the significance of the numbers is diluted by the fact that Meta is introducing Meta-accounts at the same time. "We will lose many on price, but pick up some never-Facebook users that have been standing by. I wish the two forces could have been tested independently," Carmack writes.