Virtual Reality Headsets Hit the Market

VR

This spring, new virtual reality (VR) headsets will hit the market. The recent Game Developers Conference held in San Francisco provided attendees with previews of the VR capabilities from companies including Oculus Rift, Sony, and HTC Vive. VR headsets are still relatively new and present challenges to developers, and to gamers. For developers, the VR games must feel “real” to gamers. This is quite different than traditional video games. For gamers, well, just make sure to eliminate nausea when wearing the headsets.

First to market will be Oculus Rift at $600, closely followed by HTC Vive at $800, and Sony at $400. Of course these prices do not include the additional components that are needed: game system, cameras, cables, and more. For example, Sony’s VR headset ($399) also requires the camera ($44), PlayStation 4 unit ($349), and motion-based controller ($40), making the total system cost in the $800 range.

How price sensitive are consumers for these new products?

Group Activities and Discussion Questions:

  1. Pricing is usually a complex topic. Discuss the six steps for pricing.
  2. Discuss the various pricing models in class: demand-oriented, cost-oriented, profit-oriented, and competition-oriented.
  3. Show the Sony VR headset and discuss how it is priced: https://www.playstation.com/en-us/explore/playstation-vr/
  4. Poll students: How much are they willing to pay for the VR headsets?
  5. For VR headsets, divide students into groups and have each group work on any/all of the six steps. Assign different products to different teams of students.
  6. When setting the price level, assign each team a different model to use (demand-oriented, cost- oriented, etc.).
  7. Debrief the exercise. Compare the various pricing models and discuss advantages/disadvantages of each.

Source: New York Times, Manufacturing Business Technology, other news sources

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