Steam Frame (Valve Index 2)

The loss that Meta Reality Labs is making is mainly due to their push towards AR glasses and becoming the next personal computing device after Smartphones. It's not gaming related, and the issues with their store suggest they've dropped the ball when it comes to supporting a VR gaming ecosystem.

Valve is entirely gaming focused.
 
Ravenger said:
The loss that Meta Reality Labs is making is mainly due to their push towards AR glasses and becoming the next personal computing device after Smartphones. It's not gaming related, and the issues with their store suggest they've dropped the ball when it comes to supporting a VR gaming ecosystem.

Valve is entirely gaming focused.
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Re the Meta gaming store. I gave up on it ages ago. Found it odd that I found it hard to find in the first instance and even then it was a mess.

Bought the set for PCVR in any case though tbf
 
LostCorpse said:
wasnt the 15bn software funding start ups and devs to port or create games on the meta eco system i.e. Lego brick Tales?
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It will almost certainly be a mix of hardware and software.

Just look at how much a modern smartphone costs and how much hardware you get for your money.

Then look at how much hardware you get in a quest 3 which is basically a good smart phone with some expensive VR optics attached and two controllers in the box for £450.

A £450 smart phone is usually ‘not great’ these days let alone all the other stuff you get on the quest.

When you start looking at it that way, it becomes pretty clear they are not making any money on the hardware. They are in fact likely losing a lot of money on each unit.

Even the 3S at £250 is extremely aggressive pricing. Just think about how far £250 doesn’t go these days.
 
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LostCorpse said:
i thought i saw an article were meta said they werent subsidising the q3 maybe im mis remembering though
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The BOM cost was estimated to be $400 so I can’t see how that is even remotely possible.

Add on assembly, taxes, distribution, warranty etc. and you are already above the U.K. selling price by some margin.

None of that includes the other major cost centre which is software development for the device itself.

The BOM cost for a high end smart phone is usually around that point or below and they sell for $1000.
 
A very good example for how bad the Meta game store discoverability is, is Deadpool VR.

Try looking for it on the main Store page. It's not there! (or wasn't last time I looked). I had to search for it.
 
b0rn2sk8 said:
It will almost certainly be a mix of hardware and software.

Just look at how much a modern smartphone costs and how much hardware you get for your money.

Then look at how much hardware you get in a quest 3 which is basically a good smart phone with some expensive VR optics attached and two controllers in the box for £450.

A £450 smart phone is usually ‘not great’ these days let alone all the other stuff you get on the quest.

When you start looking at it that way, it becomes pretty clear they are not making any money on the hardware. They are in fact likely losing a lot of money on each unit.

Even the 3S at £250 is extremely aggressive pricing. Just think about how far £250 doesn’t go these days.
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They didn't subsidise the Quest 3 or Quest 3S. That's not where they are losing money. Ravenger explained the losses above.
 
Ravenger said:
A very good example for how bad the Meta game store discoverability is, is Deadpool VR.

Try looking for it on the main Store page. It's not there! (or wasn't last time I looked). I had to search for it.
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It's front and centre on my store page. Has been since it launched. Just checked the web store, the app on the phone and the headset.

But I agree, the store needs to change format or something. Like, on paper, putting the most popular games at the top is a good idea. However, the most popular games are all games like Gorilla Tag etc. Which pushes the newer releases further down the page.
 
b0rn2sk8 said:
The BOM cost was estimated to be $400 so I can’t see how that is even remotely possible.

Add on assembly, taxes, distribution, warranty etc. and you are already above the U.K. selling price by some margin.

None of that includes the other major cost centre which is software development for the device itself.

The BOM cost for a high end smart phone is usually around that point or below and they sell for $1000.
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High end smart phones are sold at huge margins. The Quest headsets aren't been sold at a loss but they aren't been sold to make money either.
 
melmac said:
They didn't subsidise the Quest 3 or Quest 3S. That's not where they are losing money. Ravenger explained the losses above.
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The evidence suggests otherwise.

You can’t sell something as complex as a standalone VR headset for £500-£600 that has a BOM cost of $400 and expect to make money on it.

xrdailynews.com

Meta Continues to Operate at a Loss on Quest 3 – Production Costs Revealed

Despite the higher price tag, Meta is most likely operating at a loss on Quest 3. Since the announcement of
xrdailynews.com xrdailynews.com
 
melmac said:
High end smart phones are sold at huge margins. The Quest headsets aren't been sold at a loss but they aren't been sold to make money either.
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You have to sell things like phones at large margins on the hardware to make money. A massive part of the cost is in the software on the device itself. Manufacturers who are not Apple don’t actually make that much from phones despite the high margins on the hardware.

The BOM just factors in the cost of materials. It doesn’t factor in the cost of marketing, distribution, warranty claims, customer service, retailer margins and development of the software that sits on the device itself.

I just can’t see a world where they don’t lose money on the device.

I agree with others in that I don’t see a world where this is less than £800 if they don’t want to lose money.
 
b0rn2sk8 said:
The evidence suggests otherwise.

You can’t sell something as complex as a standalone VR headset for £500-£600 that has a BOM cost of $400 and expect to make money on it.

xrdailynews.com

Meta Continues to Operate at a Loss on Quest 3 – Production Costs Revealed

Despite the higher price tag, Meta is most likely operating at a loss on Quest 3. Since the announcement of
xrdailynews.com xrdailynews.com
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Read my post again, I never said they were making money from selling headsets.

And did you read the disclaimer at the top of the page? They state that the figures they used are unlikely to be what Meta actually paid. Meta, without shadow of doubt, paid less than those "raw" figures.
 
Valve probably won't make much money on the Frame, whatever they sell it at.
They make most of their money from the 30% cut of game sales, part of which will be driven by Frame owners buying games.

Meta does this with Quest too, but of course they don't have the huge sales numbers that Steam has, and their store discoverability sucks so much that Devs get more exposure plugging their games on Reddit.
 
b0rn2sk8 said:
I just can’t see a world where they don’t lose money on the device.

I agree with others in that I don’t see a world where this is less than £800 if they don’t want to lose money.
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If you are talking about the Steam Frame, then I fully agree. I think the Steam Frame will struggle to come under £1000. Because Valve will be selling it at a profit. Just like they did with the Index. The issue they are having right now is they want to make their margins but with the rising costs of components, they don't think they will be able to make those margins.
 
melmac said:
Read my post again, I never said they were making money from selling headsets.

And did you read the disclaimer at the top of the page? They state that the figures they used are unlikely to be what Meta actually paid. Meta, without shadow of doubt, paid less than those "raw" figures.
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Of course it’s an estimate but those estimates are not usually that far out.

Even if they were out by huge margin and Meta got the BOM down to $300, they still aren’t making money off from a £500-600 retail prince including tax on a product like the quest 3.

Just work it back £479.99 is £400 without tax.

Retailers will need a minimum of a 5% margin and Meta will have to take the loss on any defective units at that margin level so you’re looking at a wholesale cost of £380.

£380 in $ is about $460.

Let’s me really generous and say the BOM was $300, it isn’t, it will be more than this. That leaves you just $160 to cover everything else.

So development of the hardware itself and the development of its software are the two big ticket items. But it also need to cover manufacturing, distribution, marketing, customer service, warranty, ongoing software maintenance, live services costs and countless other things not listed here.

Even at $300 material cost, I can’t see how they make money let alone the more likely number of $400. The only logical conclusion is that it’s subsidised and the idea is they’d make it back on software sales and subscriptions but they haven’t hence the $15bn loss.

Component pricing is also going up not down over time.
 
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melmac said:
If you are talking about the Steam Frame, then I fully agree. I think the Steam Frame will struggle to come under £1000. Because Valve will be selling it at a profit. Just like they did with the Index. The issue they are having right now is they want to make their margins but with the rising costs of components, they don't think they will be able to make those margins.
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The tariff issues make US pricing very volatile, probably why they are not disclosing a price right now, but waiting until nearer launch. Ironically the US price will affect the UK/EU prices as they will want to keep price parity. They might even end up making more money on non-US Frame sales, though there is VAT to consider.
 
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