Quest for Improvement

Meta’s latest results saw revenue from Reality Labs — the division that hosts its virtual reality (VR) and metaverse efforts — shrink over the year, attributed to poor sales of its VR headsets. The big question left hanging after this was, what does the firm plan to do to change this trend?

Today, Meta announced that it will be reducing the prices of some VR devices. The Quest 2 headset with 256GB of storage will go from $499 to $429, and the price of the Quest Pro will change from $1,499 to $999. Notably, the base price of its cheapest headset — the 128GB variant of the Quest 2 — remains at $399. The reason provided for these changes is that Meta wants to make the technology as accessible as it can for everyone.

Let’s unpack these changes one at a time, starting with Quest 2. This is an area where Meta’s message of accessibility falls a little flat, because surely the best way to make VR more attractive to newcomers would be to bring down the price of its cheapest model. However, it’s in a tricky spot here; last year the company took the price up from $299 to $399, which it attributed to inflationary pressures, and I can see why it doesn’t want to yo-yo the price too much.

The price cut on the 256GB variant is welcome for anyone who’s a bit more serious about getting into VR and wants to make sure their headset has loads of storage for content and apps. But I think this is a pretty small group of people, and won’t make a major difference to more-casual adopters, the segment that Meta really wants to try and appeal to. Overall, I doubt the price change will move the needle too much.

Now let’s look at Quest Pro, which is a fascinating picture. In January, Meta dropped the price of the headset from $1,499 to $1,099 for a limited time, and has now gone even further by trimming the price down to below $1,000.

It is quite clear that this shows uptake of the Quest Pro hasn’t been great. The headset has been available for about six months and has already had its price cut by a third — hardly a suggestion that it’s flying off the shelves. Again, we already knew that Quest units weren’t selling well, but I think what’s interesting is what it tells us about Meta’s ambitions.

I’d always thought that the Quest Pro was more of a proof-of-concept device, aimed to show consumers and businesses what is possible with video passthrough mixed reality in a VR headset, and that the company was pretty relaxed about the sales figures. To me, this felt like a device priced to cover its own costs and allow the technology-curious to get a glimpse of the future.

This price change suggests I had it down wrong. It indicates that Meta sees the Quest Pro as a headset for the here and now, and that it wants to do everything it can to get it in the hands of individuals and business users. It’s still a premium device, but is now more affordable than other offerings like the Vive XR Elite, which goes for $1,099. It’s also got a lower price than the total cost of ownership for PlayStation VR2, setting you back $1,049 for the PlayStation 5 console and the headset. They’re all different types of devices — the PlayStation VR2 is an explicit gaming headset — but for newcomers to the segment, these devices are all in competition.

I think this position also underscores how much weight Meta is placing on mixed reality experiences from video passthrough, a feature that works on the Quest Pro but not the Quest 2. This makes it even clearer that Meta wants to move away from closed-off VR experiences and break down the barriers between the physical and virtual worlds. With true augmented reality still proving difficult to engineer, mixed reality is the easiest way to do this at present. It’ll be fascinating to see if the Meta Quest 3, which is expected to launch later this year, continues this focus. Apparent leaks from the company, reported on The Verge this week, would support this.

The shift in pricing is undoubtedly an admission that Meta’s headset sales haven’t gone as hoped. This might not reverse that trend on its own — I maintain that having a lower entry-level price would radically improve shipment numbers — but it should provide a boost in demand for the Quest Pro. But more widely, it signifies a subtle but important change in the approach to mixed reality, which feels like more of a priority than ever before.