Just a day ahead of its second-quarter earnings report, Meta said it would increase the price of its Meta Quest 2 virtual reality headsets by $100 each.
The price increase will bring the company’s revenues in better line with its costs for making the headsets, and that has become important as Meta tumbles into the recession with a core advertising business that has been weakened by Apple’s privacy push. The price increase is effective on August 1.
In the first quarter, Meta lost $2.96 billion in its VR-focused Meta Reality Lab division on revenues of around $695 million. While the ad business made up for the losses, the unheard of price increase — most consumer products get cheaper over time thanks to Moore’s Law and manufacturing efficiencies — is a signal that the company is tightening its belt for what could be a bruising recession.
Before today, Meta has been focused on investing billions to cultivate the VR market based on CEO Mark Zuckerberg’s believe that VR is the foundation for the metaverse, or the next version of the internet. On the plus side, it may mean that the company feels confident enough about demand that it can continue to sell headsets (which are already hampered by supply chain constraints) despite the price increase.
“Now, we’re making a change that will help us continue to invest for the long term and keep driving the VR industry forward with best-in-class hardware, action-packed games and cutting-edge research on the path to truly next-gen devices,” Meta said in a blog post.
Starting in August, Meta Quest 2 will cost $400 and $500 for the 128GB and 256GB versions respectively. And for a limited time, every new headset purchase will include an offer to download the popular VR rhythm game Beat Saber at no additional cost. Alongside these changes, Meta will also increase the prices for Meta Quest 2 accessories and refurbished units.
But the company said it is not backing off on its optimism around VR.
“VR’s momentum is undeniable. From gaming and productivity to fitness and beyond, VR has become increasingly popular as it positively impacts the ways we work, play and connect with each other,” Meta said. “People have spent over $1 billion on Meta Quest apps, helping to fuel developers’ businesses as they deliver the games and experiences that make VR great.”
At the same time, the company noted that costs to make and ship products have been on the rise. By adjusting the price of Quest 2, Meta said it can continue to grow investment in groundbreaking research and new product development that pushes the VR industry to new heights.
Meta reaffirmed it will launch its high-end headset, Project Cambria, later this year, and it will ship new generations of Meta Quest after that.
Big games coming to the Meta Quest 2 include Ghostbusters VR, Among Us VR, The Walking Dead: Saints & Sinners – Chapter 2: Retribution, Bonelab and NFL Pro Era — VR’s first officially-licensed NFL game.
Meta pointed out that even with the new prices, Meta Quest 2 is still the most affordable VR headset with its feature set on the market.