Meta’s ( META ) VR headset is getting a significant, but perhaps inevitable, price cut, mainly because consumers, well, just aren’t buying as many as expected.
The company announced today that it is cutting prices for its still-new Meta Quest Pro from $1,499.99 to $999.99, while the Meta Quest 2 is dropping from $499.99 to $429.99. For Meta Quest Pro, which at launch was touted as targeting businesses, that’s a drop of roughly 33% — and a notable drop from the fanfare it launched with, backed by support from Microsoft (MSFT) and Accenture (ACN) ).
Declining consumer interest isn’t a meta-specific problem — the VR market, along with the gaming industry at large, saw 2022 sales fall 2% year-over-year to $1.1 billion, according to NDP research. But the company has even struggled to keep even new headphone owners interested in the product. (Meta VP of VR Mark Rabkin recently broke the news to employees, according to a Feb. 28 report from The Verge.)
“Unfortunately, the newer groups that are coming in, the people who bought it last Christmas, are just not as into it as the people who bought it early,” he told The Verge.
IDC research director Ramon Llamas said: “The market for used and refurbished devices allows consumers to get a lower price, and if we count the inflation spectrum, consumers are smart and they will find a way to get what they want for less”
He added: “This is part of a macro move, especially because I think it’s too early for me to say that they’re cleaning out Quest 2 inventory, since Quest 3 doesn’t appear until the end of the year.”
Meta has sunk a lot in the pursuit of VR. Reality Labs, the company’s metaverse operation, has lost billions in the past year alone — it lost a staggering $13.7 billion on Reality Labs in 2022, up from the roughly $10.2 billion it lost on the division in 2021, according to Meta’s latest earnings report . .
Losses aside, Meta’s spending on VR has given it “a very tight grip on the VR device market,” as they went from having 45% to 82% of VR market share over the past year, according to Llamas. It’s still an emerging market, and if they want to keep their lead, the game for them right now, he says, is more heads in sets.
“If I’m Mark Zuckerberg, if I want people to come into the Meta family, the easiest way to do that is to lower the prices,” Llamas told Yahoo Finance. “The more people on board, the better.”
Allie Garfinkle is a Senior Tech Reporter at Yahoo Finance. Follow her on Twitter at @agarfinks and on LinkedIn.
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