Impact: DFC Intelligence has been pretty accurate in looking at the mass market appeal of new entertainment hardware platforms. Ten years ago when Sony announced the PlayStation 3 price point DFC was harsh, but accurate, in positioning how sales would go over the next few years. Now Sony is launching a new hardware product at a high price and our opinion is that the company has gained a major advantage on the competition.
To be fair, two years ago DFC concluded Sony’s VR headset would come in above $100 and that would be a net deterrent to developer and consumer adoption. However, that was before the Oculus Rift and HTC Vive were tagged at $599 and $799, respectively. At $399, the PlayStation VR appears relatively inexpensive by comparison, and given that 36 million PS4s have been sold worldwide to date, the cost to step up and enjoy solid virtual reality games has a mass market appeal other full-featured VR systems lack. How did Sony come in at such a low price? Amazingly, the company says it is not losing money on the hardware. But there are cost efficiencies built into that $399 price point. The PSVR’s specifications, for example, are less powerful with a 1,920 x 1,080 display compared to its competitors at 2,160 x 1,200. The PlayStation VR also features a 100-degree field of view compared to 110-degrees with the Rift and Vive. On the plus side, the PSVR has a 120Hz refresh rate, which is great for game applications. The Rift and Vive sport 90Hz maximum refresh rates. Another way that Sony saves money is that the required PlayStation 4 Camera at a $60 MSRP is not included. Although PlayStation 4 owners already have DualShock 4 controllers that can work with the PSVR, these do not have the full range of input necessary for more involved VR games. For PSVR titles that require motion control, one or two PS Move controllers are required at around $30 each. Some reports say Sony is planning a North American PlayStation VR/PS4 Camera bundle, but no official announcements have been made. So add in these extra devices and the real PSVR cost to consumers is closer to $500. That may not seem like a mass-market entry point, but the PS4’s status as the unqualified leader in this console cycle, closing in on 40 million homes installed, makes the PlayStation VR a mass-market play with the level of software support planned. We are reminded that the Xbox 360 saw a late-cycle boost with the introduction of the Kinect controller that gave system owners new ways to enjoy their consoles. Much the same result could occur with the PSVR.
A major question is what does the PlayStation VR pricing mean for the Oculus Rift and HTC Vive? To be a blunt this could be a knockout blow for the mass market appeal of those systems. VR is a very hands-on physical product and really requires a retail experience. This is what Sony has excelled at over the years and the ability to do marketing and PR to the masses is a huge advantage. Combine that with a major price advantage and it is hard to see how a Vive or Rift competes beyond the early adopter stage who pre-order systems. The consumer education factor is something that Sony is uniquely equipped to handle.