Oculus Rift to sell five million units in 2016, but won't turn a profit, say analysts

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Oculus Rift to sell five million units in 2016, but won't turn a profit, say analysts

Yes, 2016 looks like it will be the year the much-hyped virtual reality wave finally hits, with the Oculus Rift, HTC Vive and PlayStation VR riding the avant-garde. Now, a gang of analysts (a gaggle of analysts? A flock of analysts?) has predicted that the Oculus Rift will sell a whopping five million units in its first year on market.


But the analytic firm Suisse predicts that, while the Facebook-owned Oculus will sell five million headsets, the company won't actually turn a profit. 

"Net-net, we expect Facebook will grow hardware revenue generated from Oculus at a 4% five-year CAGR from $2.1 billion in FY16 to $2.6 billion in FY21,” the firm wrote.

“However, given our assumption that Facebook will once again demonstrate a willingness to forgo near-term monetisation 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."

Oculus founder Palmer Luckey has previously said that the Rift could cost more than US$350 - we can imagine an Aussie price of $499 on launch. Suisse made its prediction based on that estimated price. 

This article originally appeared at alphr.com

Copyright © Alphr, Dennis Publishing

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