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Oculus will sell 5 million Rift headsets in 2016, will be sold at cost

According to Credit Suisse, Oculus will sell 5 million VR headsets next year

By Anthony Garreffa on Oct 14, 2015 at 12:34 am CDT - 1 min, 10 secs reading time

According to analyst firm Credit Suisse, Oculus will sell as many 5 million Rift headsets next year, with analyst adding that it doesn't expect the Facebook-owned VR startup to make any money on the first batch of headsets.

Oculus will sell 5 million Rift headsets in 2016, will be sold at cost | TweakTown.com

Barron's picked up Credit Suisse's report, with it reiterating that it is making the estimate of the sales projection without official information, based on the $350 estimate. Credit Suisse wrote: "We expect Facebook to price the headsets at cost in an attempt to drive initial consumer adoption - with the expectation that the company plans to monetize the devices overtime via associated software revenue. Note that our current projections do not contemplate any software revenue, although at launch Oculus will be offering a number of made-for-VR games and video content from partnering developers and content owners - which include Sega, Lionsgate, Fox, Twitch, Hulu, and Vimeo".

The firm added: "Net-net, we expect Facebook will grow hardware revenue generated from Oculus at a 4 percent five-year CAGR from $2.1 billion in FY16 to $2.6 billion in FY21. However, given our assumption that Facebook will once-again demonstrate a willingness to forgo near-term monetization in return for increased product adoption, we are modeling an initial negative gross profit impact from the initiative - with Oculus gross margins reaching breakeven by 2021 and contributing ~$50 million in gross profit by FY22".

Anthony Garreffa

ABOUT THE AUTHOR - Anthony Garreffa

Anthony is a long time PC enthusiast with a passion of hate for games to be built around consoles. With FPS gaming since the pre-Quake days, where you were insulted if you used a mouse to aim, he has been addicted to gaming and hardware ever since. Working in IT retail for 10 years gave him great experience with high-end, custom-built PCs. His addiction to GPU technology is unwavering, and with next-gen NVIDIA GPUs about to launch alongside 4K 144Hz HDR G-Sync gaming monitors and BFGDs (65-inch 4K 120Hz HDR G-Sync TVs) there has never been a time to be more excited about technology.

NEWS SOURCE:gamesindustry.biz

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