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Luckey: Oculus ‘lost money’ on Kickstarter by ‘grossly underestimating’ Resources

The origins of the Oculus Rift virtual reality (VR) head-mounted display (HMD) have been well documented. Though its far from the start of the story, in 2012 creator Palmer Luckey and the rest of the team at Oculus VR ran an immensely successful Kickstarter campaign for the device, raising nearly $2.5 million USD to create its first development kit. You might think that, with this kind of money, the company would have more than enough resources to deliver on their obligations. As it turns out, it wasn’t enough.

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During a recent interview with Forbes Luckey revealed that Oculus VR had in fact lost money with its Kickstarter campaign, in which nearly 7,500 development kits were effectively ordered. “We lost money on the Kickstarter project overall just to be clear,” Luckey stated. “Yeah, we grossly underestimated the amount of time and money and resources it takes to make thousands of something in a Chinese factory.”

He continued, explaining that, in his eyes, the Kickstarter campaign was still very much a success. “Yes we didn’t make money on the Kickstarter units but what we got from the Kickstarter that was more valuable than the money was the developers that we were really looking for and in order to get it into the hands of as many people as possible. This was a way where we could get a lot of developers using it at as low as a cost as possible.

“Like, our long term goal was, let’s say that we had sold them for $1,000. We might have been able to make a couple million dollars and we would have sold them to a lot fewer people. There’d be a lot fewer people that have tried the Rift, that are building things for it, that are doing anything with it. And, you know, that doesn’t translate into billions of dollars of value, it translates into a couple million dollars.”

Of course, Luckey’s theory was proven earlier in the year when Facebook bought Oculus VR for some $2 billion. And with each of those early development kits having been shipped well before the acquisition took place, Oculus VR had fulfilled its obligations to Kickstarter backers on that money alone. The company has since shipped its second development kit (DK2) and is currently preparing the much-anticipated consumer version of the device, which is yet to receive an official release date.

VRFocus will continue to follow Oculus VR’s progress as it moves towards the consumer release of the Oculus Rift, reporting back with any further updates.