Concerned on the profit on dev kits

[Kirito]

i want to know how much profit palmer makes with dev kits because i think a hard working man like him deserves to make profit on them but he doesnt want to ;c

how much profit do u guys think he makes on a dev kit? can u guys tell me a guess? even if its 1$


OCULUS RIFT ftw!!!

[geekmaster]

i want to know how much profit palmer makes with dev kits because i think a hard working man like him deserves to make profit on them but he doesnt want to ;c

how much profit do u guys think he makes on a dev kit? can u guys tell me a guess? even if its 1$


OCULUS RIFT ftw!!!

Palmer said he was hoping to turn enough profit on the Rift dev kits to buy a pizza.

Of course, with the economy of scale with all these extra orders, he should be able to afford two pizzas (with extra toppings).

[cerulianbaloo]

I know Palmer mentioned they were about breaking even back during the beginning of the kickstarter, but I'm not sure if that's the same seeing as they're using different displays now. Could be a loss, could be a profit, who knows.

[KBK]

Even if there was a chunk left over, that the move toward a consumer version will eat that up in mere seconds. No matter what size the remainder.

[jaybug]

I think they get the components cheaper than originally planned. (Massive bulk on the screens, produce their own tracker)

On the other hand making injection tools and having a whole factory mass production was probably a bit more expensive than having Dycus hand-build the kits, which I assume was the original plan. -.-

KBK is right, whatever gross margin they get from devkits is insignificant to the further progress.

In any case, I wouldn't worry about Palmer, he'll be a millionaire before you know it

[BluHaze]

This has actually been a huge fear of mine for several months now.

It's impressive to see that the Oculus Rift generated over 2 million dollars with the kickstarter funding, but if the dev kits aren't creating at least some profit then very little of that money will help make the consumer version even better. I realize that they likely have other outside funding and investors to help further research and development of the Oculus Rift 2.0, however every little bit helps.

It's fantastic that this project is getting so much support, but if most of the funding went directly into the dev kits without much profit return, then what is left for upgrades to the consumer model?

[KBK]

I think they get the components cheaper than originally planned. (Massive bulk on the screens, produce their own tracker)

On the other hand making injection tools and having a whole factory mass production was probably a bit more expensive than having Dycus hand-build the kits, which I assume was the original plan. -.-

KBK is right, whatever gross margin they get from devkits is insignificant to the further progress.

In any case, I wouldn't worry about Palmer, he'll be a millionaire before you know it

One of my business partners, instead of outsourcing his plastics molding to Asia, decided to do it here, in North America. I know the hardware and set-up of such inside and out.

The injection work would have been surprisingly inexpensive, in this day and age.

[GeraldT]

Oculus VR is a company and as such it is not only financed from the turnover of the dev sets. They have funds from other sources and on those they grow. They are charging the money for the Rift mostly because it shows that people really care for it (instead of just trying to get a freebie (like with the LEAP I suspect)) and the chances of them actually producing something for the Rift are good.

My guess is, that Palmer could need sleep a lot more than a few bucks of extra money. (these smilies are uglyyyyy ... who have I to contact to send a cleaned up version? )

[Direlight]

One of my business partners, instead of outsourcing his plastics molding to Asia, decided to do it here, in North America. I know the hardware and set-up of such inside and out.

US voluntarily gave up on the domestic electronics market. Only a few countries even try anymore. I don't blame Palmer for a second going to China.

No one even talks about how to even setup a manufacturing plant, the local government has to setup infrastructure to support it (industrial sewage, electricity, transport hubs, etc). An economist here FOR YEARS has tried to get my local government to do this as we have major highway access, water access, expandable airport, untapped manpower (unemployment). Zero dollars invested currently. Some counties took his advice and now have lower unemployment and manufacturing plants.

Governments need to do something other then eat doritos behind bullet proof glass. (actually witnessed this).

People like Palmer want to be successful even if others like their minimum wage service sector job.

[MSat]

The more dev kits they sell, the higher their profit margins per unit sold will be (and I'm willing to bet that it wouldn't be an insignificant amount) - up until a certain point. However, at this point it's probably likely that any profits being made will be funnelled back into business operations - paying for staff, R&D equipment, rent, manufacturing, etc.

Don't you worry, if the consumer version is a success, Oculus stands to make a pretty penny.

[GeraldT]

MSat I am willing to bet that up to this point all units sold run a pretty heavy deficit once they are delivered.

The development costs (hard- and software!), all the marketing efforts (and they have spent a lot of resources there!), the offices, the equipment ...

What you get this March/April is no doubt substituted. To get the real mass production effect you need to order more than just 10k. And you don't get the effect on the first batch! Just look at the development of Xbox revisions to get an idea.
Also all the other costs would be split between a million sold units instead of 10k.

And what is the warranty situation? Now that they are a company selling a product?

[Kirito]

how will oculus be able to produce 100k consumer rifts when they dont have the money to create that much ?

microsoft needs to donate 1million to oculus for bringing vr in the world

and i want a oculus 8.0 in the future so many upgrades from now one

i want it realy bad

[virror]

I really don't think Palmer has to worry about money, he probably have enough from investors so he can continue to develop for a good while before having to rely on selling units.

[Pingles]

Sometimes companies run Kickstarters just to show investors that there is a lot of interest from the public.

Palmer got his overly positive publicity. CES was a home run.

He has nothing to worry about financially regarding his company in the near future.

If he doesn't currently have oodles of VC funding right now then he could get as much as he wants with the snap of a finger.

[KBK]

One of my business partners, instead of outsourcing his plastics molding to Asia, decided to do it here, in North America. I know the hardware and set-up of such inside and out.

US voluntarily gave up on the domestic electronics market. Only a few countries even try anymore. I don't blame Palmer for a second going to China.

No one even talks about how to even setup a manufacturing plant, the local government has to setup infrastructure to support it (industrial sewage, electricity, transport hubs, etc). An economist here FOR YEARS has tried to get my local government to do this as we have major highway access, water access, expandable airport, untapped manpower (unemployment). Zero dollars invested currently. Some counties took his advice and now have lower unemployment and manufacturing plants.

Governments need to do something other then eat doritos behind bullet proof glass. (actually witnessed this).

People like Palmer want to be successful even if others like their minimum wage service sector job.

This is not a slight against Palmer or Oculus.

But it is also now, that one can buy really good hardware for injection molding FROM China and bring it back to North America, for about 20% of what the American companies can produce the hardware for. and that the molds can be cut in china quite quickly and inexpensively. At that 20% mark, as costs comparison, I'm talking about the FULL cost. ie, you've got a room with the requisite minimums to place, service and use the given hardware. Then you need something on that given leveled slab, and it has to begin working for you.

That to be fully up and running, with finished injection molded parts, that the US sourced costs for the gear, placement, and training....as compared to bringing "functional gear" (I state it that way for a reason) from china into the same space..is about 20% of the cost doing it through US firms (might be German hardware, and so on). At last check. That ratio is expected to change, and might be much as 30% nowadays.

Make no mistake, the fancy German or euro or US made hardware for molding is a better choice. But, functionality can be reached for about 20%-30% of the costs, by sourcing the hardware from china. And that is a huge bit of coin, as differences go.

[Direlight]

Prices are set by the wholesalers and again raised by retailers. Factories profit via volume output and efficiency.

Outsourcing happens almost entirely because of slow/expensive government permits, security, zoning, and infrastructure. Africa is better for cheaper materials and workers, but poor infrastructure and security.

Look at this list, no one in the top 10 are "low wage" countries. China is bumping raises constantly.

http://en.wikipedia.org/wiki/List_of_co ... by_exports

[squibbfire]

Yes I work for a metal finishing and there is a LOT of cost in waste disposal and air permits. China companies may spend less then a .5 percent of their products overall costs to dispose of wastes...when in American the costs can be around 15 and 20 percent. This isn't Including 80 percent higher wages in some union shops.

[ardindustry]

In the development and commercialization of VR technologies, the profitability of development kits (dev kits) is a critical concern for many companies. Dev kits, which are often provided to developers before a product's official release, play a crucial role in the ecosystem by fostering innovation and enabling the creation of compatible software and applications. However, ensuring that these dev kits are profitable, or at least cost-effective, presents several challenges.