The Meta (META) VR headset is seeing a significant price drop, but it’s probably unavoidable, largely because consumers are, well, not buying as much as expected.
company today announce They’re dropping the price of the new Meta Quest Pro from $1,499.99 to $999.99, while the Meta Quest 2 is down from $499.99 to $429.99. For Meta Quest Pro, which was touted as business-oriented at launch, that’s a drop of about 33% — a marked drop from the hype it launched in conjunction with support from Microsoft (MSFT) and Accenture (ACN).
Dwindling consumer interest isn’t a particular problem for the Meta — the virtual reality market, along with the gaming industry in general, saw its 2022 sales drop 2% year over year to $1.1 billion, according to research from NDP. But the company has struggled even to keep new headphone owners interested in the product. (Meta VP of VR Mark Rabkin recently broke the news to employees, According to a February 28 report by The Verge.)
“Unfortunately, the new collections coming in, the people who bought them last Christmas, weren’t as interested in them as those who bought them earlier,” he said in The Verge.
“The market for used and refurbished devices allows consumers to pounce on them for less, and if we count the specter of inflation, consumers are smart and will find a way to get what they want, they want less,” said Ramon Lamas, director of research at IDC.
He added, “This is part of the Macro movement, especially because I think it’s too early to say they’re cleaning up Quest 2 inventory, because Quest 3 doesn’t come out until the end of the year.”
dangerous
Meta has sunk a lot into its pursuit of virtual reality. Reality Labs, the company’s metaverse operation, has lost billions in the past year alone — it lost a staggering $13.7 billion at Reality Labs in 2022, up from about $10.2 billion it lost in the division in 2021, according to the latest Meta. Earnings report.
Losses aside, what Meta has spent on virtual reality has given it a “very tight grip on the virtual reality hardware market,” as it held 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 retain their lead, the play for them now, he says, is more heads in groups.
“If I were Mark Zuckerberg, if I wanted people to come to the Meta family, the easiest way to do that would be to cut prices,” Lamas told Yahoo Finance. “The more people on board, the better.”
Ali Garfinkel Senior Technical Correspondent at Yahoo Finance. Follow her on Twitter at @employee and on linkedin.
Click here for the latest Yahoo Finance stock tickers.
Read the latest financial and business news from Yahoo Finance.
Download the Yahoo Finance app for apple or android.
Follow Yahoo Finance on Twitter TwitterAnd FacebookAnd InstagramAnd linkedinAnd Youtube.
“Unapologetic communicator. Wannabe web lover. Friendly travel scholar. Problem solver. Amateur social mediaholic.”