Photographer: Michael Nagle/Bloomberg

Why Virtual Reality’s Early Adopters Are Getting Discounted Computers

Oculus’s virtual reality revolution requires as many people to have headsets as possible, so the company is willing to forgo profits from hardware sales.

When Facebook Inc. began taking preorders for its much-anticipated Oculus Rift virtual-reality headset, the $600 price tag was higher than many people expected. Now the company is offering a steep discount on the even pricier piece of hardware people will need for virtual reality: the PCs needed to run VR games.

Facebook said on Tuesday that it will start taking preorders for discounted Oculus-PC bundles. Some high-powered gaming computers from Asus and Dell (and Dell-owned Alienware) will be sold for as much as $200 less than their normal price when purchased with an Oculus Rift.

Facebook isn’t making any money from Oculus headsets, even at $600 each, according to Oculus co-founder Palmer Luckey. Given the practically nonexistent margins on PC sales, someone is losing money every time one of these bundles is sold. This could explain why they’re available only in “limited quantities.” Dell declined to comment on who is subsidizing these sales. Facebook and Asus didn't respond to requests for comment.

There are few things sexier than VR headsets in today’s tech industry, but one unsexy detail of the Oculus is that using one requires powerful PCs that are in few people’s homes today. The PC makers are dying for a way to prop up a market that has been decimated in recent year and are hoping that interest in virtual reality could drive demand for high-powered PCs. But they're not in a position to sell large numbers of machines at a loss.

Facebook, on the other hand, has no immediate plans to make any money from virtual reality. A few months after the company bought Oculus VR, Facebook Chief Executive Officer Mark Zuckerberg said it’s not worth thinking about a product as a business until a billion people are using it. Virtual reality isn’t going to get there for a long, long time.

In the meantime, analysts have predicted that Facebook would be willing to lose money to get virtual reality headsets onto the faces of as many new customers as possible. It can recoup those losses later with software sales, advertising, or something else. Zuckerberg has a reputation for spending billions of dollars for products long before they become viable businesses.

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