I am aware of what the tech is but the rules of bulk buying still apply. If you only made 100,000 I7 CPUS the retail cost would dramatically higher than if you make 1 million. It takes far more technology and up front investment to make even a budget CPU than it does a VR headset but yet the retail price is lower because of large production runs spreading the costs. The raw material cost is low for a VR headset, the value added comes from the design and manufacture. VR headsets are not like MMR scanners where the raw material used to make the magnets are inherently rare, so no amount of increased production will cut cost.Kajin said:
Valve And HTC's Vive VR Headset Will Cost $800
- Thread starter Steven Bogos
- Start date
The drop in cost from buying larger quantities will only get you so far. The PS3 sold at a loss for four years before it started turning a profit at the same price. It wasn't a matter of units sold, it was a matter of necessary advances in the production lines to cut costs. The VR headsets we're seeing now are pushing up against the very LIMITS of what we can do. It doesn't matter how many components you order, you're still not gonna drive the production costs down far enough to shave that much money off the end price for the consumer. It just can't be done yet.albino boo said:
The PS3 wasn't selling in the numbers that Sony envisioned when they made their price point, hence selling at a loss.Kajin said:
It was sold at a loss because they over designed it on a massive scale. It cost an estimated $800 dollars to manufacture a standard PS3 and it didn't fall regardless of how many they sold. It only started falling when they phased out some of the more expensive components and prices on other components started falling thanks to new techniques in manufacturing them that drove down the cost.albino boo said:
Mass manufacture isn't some magic wand you wave at a thing to make it cost less. It drives down costs because the seller is able to make more profit on less units sold, not because they're suddenly able to manufacture those components for less.
Ok I'm going to have to walk you through the process. Sony would have done its market research to find out the potential size of the market are a specific price point and then designed a product to meet that point. Sony would have then contracted out to the Chinese and Taiwanese companies that actually manufacture the PS3 to produce x number of units per year for x number of years at x price. The only problem is that Sony did not get the sales. The manufactures then invest in plant and sign contracts of their own with component suppliers. The only problem is that Sony did not get the sales that those contracts were based on.Kajin said:
So Sony had several choices:
1. Increase the price point but that would mean even less sales.
2. Store the excess production which would mean even more costs.
3 Cut production but that would mean paying the manufacturers money to change the contract and increase the unit production cost.
So Sony cut production and sold at loss until they recouped the R&D costs and capital costs, at which then they went into profit.
It doesn't matter what the product is as long as the input costs are not a limiting factor then mass production works the same way. The limiting factor is the size of the market because increased production leads to lower unit cost because you are spreading the capital cost and R&D costs over greater number of units.
Facebook, HTC/Valve are all multi billion companies that can afford to spend 50-60 million in upfront costs to put the VR headset in the same price range as a tablet or smartphone but have chosen not to. There is one obvious reason for that, there isn't a mass market for VR. You may like the idea of VR but that doesn't mean everyone does.
Nah, dude. VR is something that I am interested in, right now, but the price of entry is just too high for me.
If you can fork out ?800 for the damn thing, then good on you, but I think that I am just going to wait until I can actually buy it without needing to rob a bank to pay for it.
If you can fork out ?800 for the damn thing, then good on you, but I think that I am just going to wait until I can actually buy it without needing to rob a bank to pay for it.
If a component costs $55 dollars for the manufacturer to make, it's going to cost $55 regardless of how many it's tasked with making. Ordering more of them just means they can afford to sell them for $56 rather than $70. The cost of production is still unchanged until R&D further drives those costs down. R&D which is entirely independent of how much they're selling in the here and now.albino boo said:
Once again, VR headsets are using the newest, most expensive tech we have available. This equates to very expensive costs, as is always the case with the newest, shiniest tech. It's going to take time for those costs to be driven down. Purchasing more of them will only drive the price down to a certain point before you start reaching hard limits on how much cheaper it gets. This is a very simple concept.
And now we have official wrote this VR trend off as just a mere gimmick.
I never understood the appeal I mean what it just gives biocular vision to games?
I would rather get a Glasses Free-3D PC monitor capable of 4k resolution.
At least I don't have to wear this heavy looking thing in my head and I can still see my real world surroundings.
I never understood the appeal I mean what it just gives biocular vision to games?
I would rather get a Glasses Free-3D PC monitor capable of 4k resolution.
At least I don't have to wear this heavy looking thing in my head and I can still see my real world surroundings.
Once again buying 1000 components is cheaper than buying 100. Volume discount exits across all sectors where input costs are not the issue. If you make a case of out gold you wont get a volume discount but if you make the same case out of plastic you will. The component cost will come down with volume in the same way if does for every other piece of consumer electronics VR headsets are not special and they are not made from gold plated platinum. I don't know how many ways there are of telling you that prices of components are not fixed but vary with volume because the capital cost of plant is shared over a greater number of units. If you spend 1 billion dollars on plant that makes laser diodes but only sell 10,000 that 1 billion cost has to recouped from the price of that 10,000. If you sell 1 million, the 1 billion set up cost spread over 1 million units is less, so the output price falls.Kajin said:
It doesn't matter how many units you sell, you're eventually going to reach a hard limit on how far you can drive the price down. If the manufacturing methods needed to produce something efficiently don't exist then then they just don't exist. This is the case with ALL new technology. It doesn't matter that it's made out of plastic. You can't cut production costs beyond a certain point before you start cutting corners and producing inferior product just to meet your demand. You can't do that with something as cutting edge as VR headsets while still maintaining the quality you need for them to function perfectly. It takes TIME for manufacturing efficiency to improve to the point you can start charging less and still maintain profit. Moving more units helps to a point, but not to the point you seem to be thinking it would.albino boo said:
Once again that does not change the fact that R&D and plant are the major costs and they fall per unit as numbers increase. That's how the market works for all consumer electronics. Furthermore making something from gold will always cost more than plastic because gold as an element is only produced in supernovae and as opposed carbon which is produced by nuclear fusion in stars. So there is less gold in the entire universe than there is carbon. So gold costs more than plastic because of the laws of physics make it rarer. When you are making something from gold the input cost is factor but not when you are making something from plastic.Kajin said:
The cost of new chip plant is roughly between $9-10 billion. Thats a fixed cost not dependent on how many you make. The cost comes from making wafers pure and the ability to control doping to build transistors at 5nm scale. The raw material cost is nothing compared to the plant cost. So the major factor in chips prices is capital cost in setting up the plant. The only way chip manufacture is economically viable is by selling millions. All the costs are dwarfed by the capital cost so the factor that decides the output price is the number sold. Once again price varies by volume because the cost is shared over units.
Not as expensive as I though it was going to be but still way too expensive for the average consumer to consider buying anytime soon. Honestly even if the Vive and Rift where around the ?300 price mark I would still not be rushing out to buy one as it is still largely unknown how big of an impact VR is going to have long term. If in 5 years time VR is still around in a big way and is more attractive price wise then I'd consider getting into it.
So how long do you think until they make a "V2" that uses cheaper parts to reduce costs while they manage to milk out the cash from early adopters?
I can't imagine they'd let something they spent this much time, money, and resources for "die out" as quickly as people are claiming.
I can't imagine they'd let something they spent this much time, money, and resources for "die out" as quickly as people are claiming.
It's more of a maiden voyage at this point, it'll get to the point of smartphones, tablets and drones soon enough. Right now they're making prototypes that are considerably more powerful and resilient than they'll ever really need to be, to showcase what the absolute limit of the theory is. A few generations later, you'll be able to enjoy some amazing things in your lazy chair.List said:
I forget, doesn't VR stand for Virtual Reality? Does that sound like something that would be cheap?
As many have said, this is the cost of entry for new technologies. If you are pinched for money, then "Hop on the latest Tech Fad" probably shouldn't be on your to-do list. I think it is worth mentioning that this device goes beyond just video games.
You should always go for second generation if you can. I mean look at Hoverboards, the price of early admission could have been your house.
As many have said, this is the cost of entry for new technologies. If you are pinched for money, then "Hop on the latest Tech Fad" probably shouldn't be on your to-do list. I think it is worth mentioning that this device goes beyond just video games.
You should always go for second generation if you can. I mean look at Hoverboards, the price of early admission could have been your house.
That depends a lot on whether they find something else to jump into. In the tech industry, the fear isn't that what you thought was a wave turned out to be a ripple. The fear is that what you dismissed as a ripple turned out to be the next big wave and you've missed it. They can afford to fail. They can't afford to not succeed. (Did that make any sense?)DeliveryGodNoah said:
WHaaaa, Whaaaa the price, the freaking price, THE PRICE!!! O get the hell over it already! Open a bloody history book about computing, ffs the first needed a freaking building to be stored, your phones are more capable computing then the one they landed with on the moon etc etc. Seriously ppl are so entitled about this VR business it disgusts me, must be a millennial thing I guess. A technology in its infancy is expensive and will be niche that was proven time and time again. Computers, TVs,Hi-Fi, everything!!! Heck back in the day a family couldn't afford to have a bathroom in there house, hence public bathhouses. We live in a culture of I WANT EVERYTHING NOW! and it is rather sad, since that will probably be our cause of downfall.