How much more expensive can the Omni get?

Virtuix, I love your product. I can't want to have it and use it. Its going to be amazing. But like a drunk friend that's had one too many and now wants to hit Denny's and a strip club, we have to talk.

Are you serious about the price increase? How much more expensive do you think this thing can get before you price this thing outside of the possibility of expanding your business? AS OF RIGHT NOW owning an Omni, a VR capable desktop, a compatible headset runs the average user $2100.00, and that's taking it easy. Its more like $2400.00. Do you think there is much more room to expand? I pre-ordered a year ago at $700.00, that was HUGE for me. Untold levels of financial burden would be placed on the average individual to acquire one of these things. If you aren't careful, you're going to kill your product. I hope you are taking your consumer models with a pinch of salt. I'll be considering your product dead in the water past $825.00, the goal is to slowly bring the price down, not up.

Signed,
Armchair Businessman

http://www.virtuix.com/production-update-vr-stands-pricing/

Comments

  • sutekiBsutekiB Posts: 1,045
    Hi @gleamingsands, that's a perfectly understandable reaction. The aim is indeed to make the product cheaper in the long run. Many things can contribute to that, but currently the cost of making the Omni is such that the low pre-order price tag needs to go up. In a way this is appropriate given that some people have been waiting a long time with their pre-order - they're getting a good deal. The Omni is unique enough, and cool enough, that I think it will do fine at a higher price until it can be made more affordable.

    The entry cost of VR is indeed high, but this is assuming that you are buying all the components at once, which won't be the case for everyone. Also, the price of VR capable GPUs and smartphones is almost certain to keep coming down, which helps. At some point, all you'll need is an Omni and a cheap smartphone and smartphone viewer.

    Let's also not underestimate the lure of VR, which is just going to become ever more compelling over time as the range of content increases, and other VR technology improves. The Omni is a very solid device capable of accommodating a wide range of people; it has its own comprehensive integrated tracking that works with other systems to give you full, Active VR. Nothing else does this. The Omni shouldn't be ashamed to represent today's high-end of VR, even if the goal is to one day be found in every home.
    Community Manager at Virtuix
  • @gleamingsands - while I agree that the goal here is to keep the price point as low as possible, it's the market demand vs supply that is really going to decide where the price point needs to be set. Also, now that actual units have been produced and shipped, Virtuix may have realized that they lowballed the funds they'd need to be able to keep expanding to meet demand and innovate future updates in design.

    Just like Consoles, the price can go down from the launch price over time. It makes sense for pre-orders to be cheaper because we had no real guarantee that any of these VR walking platforms would ever see the light of day.

    I like the Omni, but I still see this as a stepping stone to what is going to be needed for a properly immersive VR experience, and I'm okay with Virtuix ensuring that they have the funds to do that.
  • xxann5xxann5 Posts: 593
    hey now @gleamingsands! you have gone to far! there is nothing wrong with a Denny's run at 2AM before you hitting up a strip club. You sir need to get your priorities straight.

    :D
  • Sponge101Sponge101 Posts: 428
    Damn strip club inflation--the prices are going up there too!

    Place your bets, boys. I say the pods, harness, rack, boom will go up to the stands' price of $99. The shoes stay the same because that's the average price of new shoes. The Omni package I say go up another $150 to help offset shipping cost because you know they underestimated that cost.
  • Sponge101 said:

    Damn strip club inflation--the prices are going up there too!

    Yeah, inflation is a huge issue. It sometimes gets downright absurd. I prefer them natural even if they are smaller.
    Sponge101 said:

    Place your bets, boys. I say the pods, harness, rack, boom will go up to the stands' price of $99. The shoes stay the same because that's the average price of new shoes. The Omni package I say go up another $150 to help offset shipping cost because you know they underestimated that cost.

    Your price adjustments all sound believable, except I'm going to say that the Omni package itself will only go up by $100, since only the pods(+$20) harness(+$20) and Omni(+$40-$60?) would be part of the package that gets an increase. The shipping costs are going to be up to the customer to decide which shipping method they will be using and be a completely separate price from everything else, but I could see that running $50-$100.
    It makes sense that the Omni would be comparable in price to an entire VR headset + motion controller package, since it effectively completes the other half of the VR experience.

  • Sponge101Sponge101 Posts: 428
    @GreyAcumen. Many people have commented when they saw the Omni for the first time they were expecting the cost to be higher. I hate to say it, but even breaking the $1K mark would still be within the realm of expectation for some people. Obviously, not for us here.
  • I could see Virtuix bumping right up against the $1k mark ($999) but I don't think they'd be willing to go past, not without it being some sort of "pro" version that has extra features or maybe a reinforced frame and larger ring for heavier players. Breaking into 4 digit dollar values brings an entirely different psychological impact on the consumer than just going from 800-900, and it's the type of impact that might end up lasting even beyond an eventual price drop to back under 1k.

    With that in mind, I'm sticking with my $799 prediction and will be super surprised if the base Omni package went over $899.
  • edmgedmg Posts: 57
    edited October 2016
    I'd expected it to cost more like $2k, so when I saw it was $699 it seemed like a bargain.
    Not that I would have paid $2k for it, but I suspect many people already think it's a lot more expensive than it really is.
    Certainly $1k wouldn't be outside the sane price range that people might pay. A decent exercise treadmill was $1k+ the last time I looked at local store prices, and that just goes in a straight line with no games.
  • The big question is what is the formula for Growth. Real Profit = Potential Growth/(Competition, Availability, Continuing Consumer Demand), but where potential sales is C, potential individual profit is X, and price point is A, the relationship between the three is where profitable % of price point A is larger, total possible sales as related to the lowest possible manufacturing cost(LPMC) becomes lower based on a sliding scale related to demand and available consumer income (Y). Therefor, ((A-LPMC)=X)Y=C. This is a silly untested bit of algebra, but it represents a sort of simplified picture of what has to be achieved numerically in order to create a profitable business model off of a product.

    I wish I wasn't at work so I could read over it and plug numbers into it so I could flesh out something a bit closer and better defined.
  • xxann5xxann5 Posts: 593
    I am not much of a business man, Though I would think that people like Mark Cuban don't invest millions in any company without some doing some investigating and number crunching to make sure its not a compleat pipe dream.

    Then again. He could have just thought it was really cool and wanted to make sure that he got one. LOL :p
  • That was more of an intellectual side quest, not a material argument against raising the price of the object apart from better defining mathematically the relationship between higher costs and potential sales.
  • GreyAcumenGreyAcumen Posts: 308
    edited October 2016

    That was more of an intellectual side quest, not a material argument against raising the price of the object apart from better defining mathematically the relationship between higher costs and potential sales.

    To be honest, I had completely assumed the latter. Like you were going; "Oh my god, really!? How badly do these guys intend to gouge their consumer base?!"
    In this newly recognized vein of thought, I'll point out that your equation, while generally accurate, only really accounts for a price that has been set the first time, not for a changing price. What something HAS been worth will greatly influence what people think it should be worth. If Virtuix had started off at $2000, and then lowered it to $1200, everyone would be raving about what a great deal it is, but going up to $1200 from the current price, you'd have a lot of people going; "doubling the price? what a ripoff..." even though the resulting price would be the same.
    That is the main reason I mentioned the 4 digit cut off. Right now if Virtuix jumps up too high, it's going to make the new price look bad and people who might have paid that much for it to start with will avoid it because they believe, from past experience, that it should cost less. There are potential countermeasures (excuses) that can mitigate this issue. For instance, the price point was lowest for kickstarters because the idea was purely theoretical and untested, then preorders were slightly more expensive because at the very least there were physical signs and pathfinder results that showed real progress and potential, now the price point can be raised again because there are actual consumer units being shipped that show the idea is now a reality, so following this logic, another price raise could be made once the current price point pre-orders have been shipped, since the expected wait time will have been drastically reduced by then. Basically each of these cases use the excuse that the consumer's faith in the company was a substitute for the extra cost that new buyers now have to pay.
    After that, the price can still be raised by making very mild aesthetic changes, even something as simple as offering custom colors or including additional LEDs, and labeling it as V.1.2 or something of the sort, provided the price jump isn't too high. Basically, where I've already touched on "door in the face" techniques (start from a high price and lower instead of starting at a low price and raising) this is the other side of that coin, the "foot in the door" technique, in which, once you've raised the price once, you've prepped buyers to expect further price raises in the future, provided none of those jumps are too drastic.
  • xxann5xxann5 Posts: 593
    @GreyAcumen you reminded me of the JCPenny "Fair and square pricing" disaster in 2012.

    The TL;DR is that a new CEO decided to completely do away with sales and to just have every day low prices. These prices where far lower than the same items at competitors when they where not on sale. I recall the CEO saying that the consumer is intelligent and that they don't need to be duped into thinking they are getting a good deal. Well he was very wrong, turns out the majority of them are stupid and need to be duped, even if its at a subconscious level. JC Penny lost millions and I think that CEO ended up stepping down.

    Pricing of an item is very difficult and not decided on a whim. Coming from kickstarter adds another level of difficulty as you are basing the price in very little, and you also want it to be less than the retail price, otherwise people will be more hesitant to back it but you then have to raise the price which will cause the internet to implode.
  • gleamingsandsgleamingsands Posts: 280
    edited October 2016
    I like price increases in general for a post-theory product because if there is a demand, that price increase is reflective of demand, and at current scales of production, that would actually be a positive signifier. I just enjoy a little temperance, but honestly, this was to be expected, why would pre-orders be more expensive than readily available, post-release hardware? My initial argument was a bit silly in that regard. More reactionary than anything, and as a VR advocate, I want there to be as little in the way of the progress of this market as possible. A bit anti-free market if you ask me, so I'll have to temper myself instead.
  • sutekiBsutekiB Posts: 1,045
    The new price has gone live on the website - and it's $999.

    Hopefully, if you missed the pre-order deadline you are breathing a sigh of relief, while at the same time if you've been holding on to your pre-order for a while, you feel sufficiently rewarded for your patience. Personally, I think they've struck a good balance, and I'm glad Virtuix have kept it so low. When people see the Omni, they look at how sturdy it is and typically guess that it's between $2000-5000. Virtuix could easily have priced it in that range - or indeed even higher, without deterring commercial clients. Instead, they kept it at a point that's attainable for most people. It's still a serious investment - just like a quality TV, but I believe it remains great value for the money. Remember this is more than just cutting edge, it enables something incredibly powerful - first person, boundless, free roaming VR. Nothing else gives you that.
    Community Manager at Virtuix
  • xxann5xxann5 Posts: 593
    1K is about what i thought it would be set to. I think anything higher would have been a mistake.
  • adalosadalos Posts: 13
    Glad I jumped in when I did. Would have cried a little if I had to eat $300.
  • I wish I had jumped in before the first price increase.
  • edmgedmg Posts: 57
    I must admit I was was a little surprised they went that high, but it still doesn't seem excessive. I am glad I preordered, though, I'd have a harder time justifying it at the new price.
  • kzintzikzintzi Posts: 54
    :disappointed:

    not sure when or even if I'll be able to get one now - when you add in the GST, Shipping, AND the customs and excise for a product over $1000AU this now comes out to ~$2000AU.

  • kzintzikzintzi Posts: 54
    kzintzi said:

    :disappointed:

    not sure when or even if I'll be able to get one now - when you add in the GST, Shipping, AND the customs and excise for a product over $1000AU this now comes out to ~$2000AU.

    just read the FAQ - $1800AU is still too much for me at the moment - glad there is a distributor in Australia though.. maybe next year or the year after will be the time
  • If I was Virtuix, I would be exploring sponsored financing options such as payment through Paypal credit. It may be that at this price a significant amount of buyers will never have enough capital to purchase it outright. I know I wouldn't generally. Its worth considering if it hasn't already been.
  • @kzintzi, they do currently accept Paypal as it turns out. The Paypal credit system is very useful for large purchases such as this as it utilizes the no interest model for a specific period. I'm not sure how the Australian credit system works, but if Paypal is allowed to operate there as here, you have a simple and easy way of purchasing this item without putting forth all of your money at once.
  • the only problem is that not everyone starts out with $2000 worth of credit, I was lucky enough to get in on a special promotion, but I think I'm still only up around $3000 even though I've been using and paying off paypal credit for years now.
  • I did, but I guess I have good enough credit for that? Anywho, muh debt package is... not something I should be discussing on a public forum. l;
  • kzintzikzintzi Posts: 54
    Virtuix have a distributor in Australia which is PLE (I buy stuff from them all the time), which is awesome but the AU price is $1799 and is still a bit too rich for me right now - it's still a maybe next year purchase.
  • MarkHMarkH Posts: 11
    No issues with your Australian distributer because Virtuix basically just fucked everyone outside of the US out of their order and I completely call bullshit on their argument of shipping because its actually really not all that hard to get a pallet shipped from the US to anywhere in the world using freight. and if you had any brains at all you'd figure out how to ship multiple boxes instead of a single box and mark it do not part ship.
    Really, it comes down the simple fact that if they cancel our kickstarter then they can deliver more devices to their Chinese partner and then expect us to re-but the f'n thing again at a higher price.

    Well Virtuz...I say **** you....
  • adminadmin Posts: 166
    Hi MarkH, I understand your anger. This is a hard setback for us too. Our production capacity is high enough to produce units for our backers and pre-order customers. The challenge is not just the initial delivery of the unit and accessories worldwide (which is costly but manageable), but handling and servicing customers and units all over the world, which is nearly insurmountable and too costly for a small startup like ours (and a big and complex product like the Omni). We wish it were different and regret we have to take this step.
  • Obs545Obs545 Posts: 14
    Now they are $4000.00, which is for commercial but as far as I can tell it's the same Omni. Honestly at 4K, if I was thinking business, I'd probably start looking a different direction, for $10k-$20k there's a company that provides building a full VR room with all the equipment to support it. Here now we're talking 4K for Omni, 2k for PC 500-800 for be device...
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