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China Games Technology

Oculus Suspends Oculus Rift Dev Kit Sales In China 131

Posted by samzenpus
from the one-bad-apple dept.
An anonymous reader writes with news about how Oculus is dealing with the reselling of dev kits in China. Bad news for those of you looking to get your hands on a preorder of the Oculus Rift virtual reality headset. A representative from Oculus recently confirmed that the company has had to stop selling its headsets in China as a result of an undisclosed amount of reselling. Which is to say, some of those preordering the developer edition of the virtual reality headset in China — not the consumer product, which hasn't been officially released in any capacity just yet — aren't actually looking to develop anything on the headsets. Nor are they even interested in getting a first look at the virtual reality capabilities of the $350 development kit. They're scalping, plain and simple, to take advantage of what appears to be a hefty amount of demand for the device.
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Oculus Suspends Oculus Rift Dev Kit Sales In China

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  • by mark-t (151149) <markt.lynx@bc@ca> on Sunday July 06, 2014 @06:48PM (#47395573) Journal
    Wouldn't that make trying to scalp them prohibitively inconvenient?
    • by Frnknstn (663642) on Sunday July 06, 2014 @06:53PM (#47395607) Homepage

      Remind me, how many people are there in China?

      • by mark-t (151149)

        What does how many people there are have to with scalping? If they don't want to sell in China because there are too many people trying to order one in just that one country to both satisfy the demand there while meeting the demand anywhere else, then why don't they just say that instead of blaming it on people who are scalping dev kits?

        One would assume that if scalping were a problem, limiting to one per customer would, as I said, make scalping prohibitively inconvenient... but all that you are saying

        • by kesuki (321456)

          mark, the oculus rift2 devkit can play a few game engines, but it is not released to the public yet! it's not about shipping a full retail model in china, it is that chinese companies are requiring their employees to buy (at $350) the one per custom limit then selling them on ebay or like sites for $470 http://www.ebay.com/itm/BRAND-NEW-Oculus-Rift-DK1-Virtual-Reality-Headset-NEVER-USED-/151342637965?pt=US_Video_Glasses&hash=item233cb9638d [ebay.com]

          $120 profit at posting time. to compound the issue the devkit in

          • by kesuki (321456)

            correction dk1 units sel for $470 dk2 are not even on ebay yet. and dk1 weren't hd capable... they were more to just test game engines.

          • the oculus rift2 devkit

            Mark said nothing to suggest he's confused about it being a devkit. Just that you can limit "scalping" by not allowing multiple sales. Any individual resales beyond that is irrelevant.

            I'd go further, there's no such as scalping. If someone can resell an item at higher than your retail price, you failed to price or supply your product properly. The error is yours, not the "scalper's".

            [In my state, there are specific laws that protect resellers. Preventing "one per customer" restrictions precisely for that re

            • by sg_oneill (159032)

              If you are selling a dev version, then you are retailing a product to the public. Again, if there is more demand at a higher price than you are supplying either quantity/price, the error is the vendor's, not the "scalper's".

              That would be fine if Occulus was simply trying to profit maximise here, but that is not even remotely Occulus' intention here. They have a limited supply but want to keep the price low to stimulate development. If they raise the price it goes out of the hands of developers into the hand

              • but that is not even remotely Occulus' intention here. They have a limited supply but want to keep the price low to stimulate development.

                Except they are not targeting devs. They are just selling a limited number of devices too cheaply. That neither targets devs nor provides development funds for themselves. There's nothing about selling-low that prevents "rich folks" buying a toy. Essentially whether a dev, a rich toy buyer or a tech collector gets a unit is a matter of first-come-first-served.

                Other than shutting off an entire region (which cuts off Chinese devs as much as it does "scalpers") they are just selling alpha versions to anyone wh

                • by sg_oneill (159032)

                  Except they are not targeting devs. They are just selling a limited number of devices too cheaply. That neither targets devs nor provides development funds for themselves. There's nothing about selling-low that prevents "rich folks" buying a toy. Essentially whether a dev, a rich toy buyer or a tech collector gets a unit is a matter of first-come-first-served.

                  I dunno man. It seems pretty clear they are trying to target developers. Its in big text on the site, and much of the content provided (Such as the un

                  • by kesuki (321456)

                    "More to the point, now that Occulus is highly capitalized via its facebook deal, its quite capable of ramping up production to meet demand at its price, BUT, it seems to me occulus dont seem to want its products in wide use yet , probably to protect their reputation whilst its still in development. If they just wanted cash, they could simply produce more."

                    this is exactly my point. if they wanted to they would take a page from sony http://store.sony.com/wearable-hdtv-2d-3d-virtual-7.1-surround-sound-zid27- [sony.com]

        • by Frnknstn (663642)

          Your glibly stated solution was that limiting the sales to one per customer would curtail scalping.

          You did not offer any details about how personhood would be determined or how the limit would be enforced, so I was had to limit my response to a glib reply. I pointed out that one thing China has is a lot of people, and so on the face of it "one per person" may not be all that effective. You are wecome to elaborate on your plan?

    • by bengoerz (581218)
      Limiting the supply will just push up the black market price. Oculus just gave a boon to the first-mover scalpers.
      • by mark-t (151149)
        Wouldn't limiting supply involve limiting the *total* number sold, not just the number that they are allowing per customer?
    • by khchung (462899)

      Wouldn't that make trying to scalp them prohibitively inconvenient?

      You don't know how iPhones got into China before Apple started selling them there, do you?

      The scalpers, or more appropriately, dealers just stand outside Apple Stores (wherever iPhones are available) and offer to buy from people who just bought the phone in the store, for a small profit. Soon enough, people aiming for that small profit started going to the store, buy an iPhone with credit card, then immediately sell it to the dealers for cash (and repeat for every credit they own, apply for more when all c

  • Time for #cardboard to get resold.

  • All the more market share that will go to Google Cardboard instead!

  • Not selling it directly if price is being uncontrollably inflated is great strategy if they want to keep this product popular, especially in China. It was pretty obvious Chinese public would scourge the earth for these in order to start reverse engineering it in a country with poor IP legislation (especially for foreign IP), but the real problem Oculus would face with this Rift "black market" is marketing itself, as the product would immediately get the exclusive, overpriced label that a developing countrie

    • by Anonymous Coward

      China has good IP laws. If you create a product you *will* have to improve it and find ways to make it cheaper. If you don't, somebody else will just as soon as they can figure out how to. Contrast that with some other country's IP laws where you can lock down knowledge and bribe the government into enforcing artificial constraints in the marketplace.

      There are people that think 75+ year copyright s and 20+ year patents are a good thing. I say let product evolution run unfettered.

      • by phmadore (1391487)
        WELL SAID.
      • by cloud.pt (3412475)

        I agree with everything you said except the first sentence. China does not have good IP laws because there is no balance. Some countries have restrictive IP laws like the US, and some have liberal IP laws like China and India. I don't know if there is any particular country with the perfect balance of protecting the interests of the inventor while not encumbering social development. To me that is perfect balance. Big Pharma is a known abuser of that decades long exclusivity which makes people die of tubercu

  • by Anonymous Coward

    Or is it the Chinese are better at it than you?

  • by diamondmagic (877411) on Sunday July 06, 2014 @08:16PM (#47396043) Homepage

    There's nothing wrong with "scalping, plain and simple." It's just a secondary market for goods - the very kind we like when we talk about books or music. You have a right to resell things.

    If there's a very active secondary market for something, that suggests people are having a hard time getting it from the primary source, or there's just not enough to go around to everyone who wants one, so a higher market price forms. It encourages people who have one to sell it for the new, higher price (increasing supply); and it ensures that those who most urgently want one can get one if they so choose.

    • by phmadore (1391487)
      And furthermore, strategy wise, it provides the opportunity for the manufacturer to actually find out what the product is worth. But I guess you're more likely to do that if you're not funded by Silicon Valley VCs.
    • by gman003 (1693318) on Sunday July 06, 2014 @11:00PM (#47396939)

      The problem is that this is not a consumer product - it's a development kit. It isn't ready for consumers yet, and is intended only for use by developers so they can have something ready when the retail version is available.

      Reselling to non-developers might give Oculus a bad rep because they're being judged by an incomplete product that wasn't supposed to be used by such people. So I can see why Oculus is trying to avoid this happening.

    • by ThePeices (635180)

      Its because these are developer kits, not the final consumer product. There is only a limited number of devkits, and these kits are for developers, not end users.

      The Chinese can resell as many consumer Rifts as they wish, there will be no limit. Dev kits are another matter entirely

      • Yes they're developer kits, and nearly everything in the world is limited in supply, how does this change the situation? Secondary markets like this expand access to the product to those who want it, not limit it. It encourages people who have one to sell it, and it makes it possible for those who need one now to get it now.

        • by Dutch Gun (899105)

          Yes they're developer kits, and nearly everything in the world is limited in supply, how does this change the situation? Secondary markets like this expand access to the product to those who want it, not limit it. It encourages people who have one to sell it, and it makes it possible for those who need one now to get it now.

          The market for dev kits can't expand in time to meet consumer demand, nor would it be cost-effective to try to do so. It takes a lot of capital to ramp up to full consumer production capacities. And, any dev kit taken out of the hands of actual developers will tend to limit eventual dev support at launch time. It's crucial to get those devices into the hands of actual developers in order to ensure there is actual support for the product at launch time. There's no need to expand access to this particular

          • The market for dev kits can't expand in time to meet consumer demand, nor would it be cost-effective to try to do so. It takes a lot of capital to ramp up to full consumer production capacities. And, any dev kit taken out of the hands of actual developers will tend to limit eventual dev support at launch time. It's crucial to get those devices into the hands of actual developers in order to ensure there is actual support for the product at launch time. There's no need to expand access to this particular product, because it's not a consumer product.

            All these are reasons to continue selling the product, at a higher price, and to resellers (if they'll still buy).

            Higher market prices expand access to a product... period. That's called the law of supply [wikipedia.org].

            The amount of capital consumer production would take is irrelevant. They're selling one product, it's designed for developers, and at the manufacturer price, there's a shortage [wikipedia.org].

            If the kit is being resold, it's still getting into the hands of someone who wants one, and it ensures that they have guaranteed a

            • by Dutch Gun (899105)

              You're conflating the issue, because there are two different products and two different markets (game developer kits are typically NOT the exact same hardware as the final product). It makes no sense to expand the developer supply (at potentially enormous cost) to meet the consumer demand. The issue is that developer kits are being taken out of the developer market and being sold to consumers, where it does the company absolutely no good at all.

              Developer kits are produced in limited supply at greater cost

    • What's wrong with reselling is that it leaves revenue on the table for artists/entrepreneurs, instead giving it to those who add zero value. With a high demand product, a consumer-friendly price is taken advantage of by scalpers and consumers end up getting screwed, because the money they pay above retail doesn't support the product. I really wish products like this in high demand (also game consoles and general admission tickets) could be auctioned until they shipped (or the day before the show) so the ac
      • If Oculus wanted to collect that revenue, they'd have raised the prices on day one. Most markets work perfectly fine without auctions...

        That's not to say that reselling adds "no value." It ensures that someone willing to pay the higher price gets one, whereas they might not get one at all otherwise. That certainly adds value! Profit, by definition, means taking scarce, valuable, resources; and selling it as something more valuable.

        • Most markets, but some (like event tickets and new gadgets where demand at retail cost exceeds supply) don't. And without an auction, there's no way to either avoid scalpers with the initial run until demand is met, or screw over early adopters when you decrease the price to reasonable levels. An auction would inflate the first run to what the desperate are willing to pay, and prices would quickly normalize as supply improved.

          Your reasoning for the value of scalpers is ridiculous, too. The price wouldn't
          • The price wouldn't be as high if it weren't for them in the first place.

            That's a good thing though. A higher price encourages people who have one to sell it, ensuring that they don't just sit around idle.

            If a low price were an end unto itself, why not just hand them out for free?

            • But that still leaves the problem of lost revenue for the producers/artists/entrepreneurs/manufacturers. It's a bad thing, because customers feel they've contributed their purchase towards supporting a product when they've actually contributed $0. A product that was bought high at auction by an eager customer can still look to recoup some of his costs even if the price is down, but a lower price means more potential buyers can seek it out.

              A low price isn't an end unto itself, but offering the lowest price
              • If the manufacturer loses revenue for mispricing their product, that's their problem, not the developer's, or anyone else's.

                The warm fuzzy feeling of sending your money to the manufacturer instead of someone who helped you get the product in your hands in the first place is worth exactly $0.00.

                • I know it's their problem... and an auction system would solve it completely. It's not even a matter of mispricing, it's a matter of the market value of the product fluctuating at various stages of the product's life and availability levels.

                  Also, the warm fuzzy feeling of sending your money to the manufacturer instead of someone who charged you a fee for a meaningless "service" is worth something, as it contributes to the profitability and health of the company, making future versions better. Applying it
    • Just ask Bandai. Scalpers bought up all the Action Figures for their Gundam Seed TV show in America. At one point a figure with an msrp of $15 was going for $150 on ebay and at the big action figure scalper sites.

      Thing is, Gundam is a giant robot show, and the toys are a major part of what draws fandom in and gets buzz. Nobody could get the toys without paying 5x-10x msrp. Heck, I didn't even know Bandai had put the show out until I saw some of the toys at the old KB Toy Store for $3 a piece after it ha
  • by phmadore (1391487) on Sunday July 06, 2014 @09:08PM (#47396315) Homepage Journal
    I realize they have the right to stop selling anything to anyone at any time for any reason, but I'm struggling to figure out what their beef with this is. They should simple alter the dev kit product so that it is virtually impossible to not spot the difference between it and the actual product. This way the resellers will be prevented from claiming the device is the genuine article. Otherwise, what's the problem? Someone else making money off your product? Did Steve Jobs come out of the grave and buy this company? Am I being an asshole or is this just more anti-Chinese xenophobic garbage in the US media and amongst decision makers here? So what if I decide I want to do that, from Colorado? What are you going to do, sue me? I buy it, it's my property. It doesn't quite matter why I buy it, or for what purpose I buy it. Then I have the right to sell it. For whatever price I value it at that you are willing to pay. Is this not the way capitalism is supposed to work? I'm not going to pretend it does work, I'm just asking, did I get that part right?
    • by ThePeices (635180)

      Its because there are a limited number of devkits being made and there is a limited number of kits being made per day.

      The dev kits are for developers, not end users. The manufacturing is not scaled up for mass dev kit production, for very obvious reasons. The consumer version will have no such limits.

    • Its hard to work out what the issue is.
      China will see the product in the same way it saw 4k displays at 30 and 60 Hz. A flood of new VR products at a working class price point to meet market demands will be in shops globally.
      Some will have Windows, Mac and Linux support, others will be more driver and OS bound.
      So in time you will be able to find some great made in China VR products at various price points with interesting hardware support for your VR needs via brands from China.
      No need of think about t
    • by bentcd (690786)

      I realize they have the right to stop selling anything to anyone at any time for any reason, but I'm struggling to figure out what their beef with this is.

      The value of the Oculus brand is greater the more developers they can snag to work on/with their product, and so the more developers that get their hands on the devkit the better for Oculus. They are limited in how many devkits they can build however and so it is important to Oculus that every single one that they make goes to an actual developer, because that developer increases the brand value. Every devkit that goes to a non-developer is a net loss to Oculus because that is a devkit that did not go to a

      • The value of the Oculus brand is greater the more developers they can snag to work on/with their product, and so the more developers that get their hands on the devkit the better for Oculus.

        That isn't consistent with them selling the units. The moment you charge money you are just selling them. If you are selling them, you can't argue you're trying to target devs. (And if the units are worth more second hand than new, you are clearly charging too little.)

        They are limited in how many devkits they can build however and so it is important to Oculus that every single one that they make goes to an actual developer

        Then they shouldn't be selling them to anyone who orders one. They should be lending units to their preferred developers on an invitation-only basis. They can then put any conditions they want in the loan agreement (such as a large penalty for

        • by bentcd (690786)

          That isn't consistent with them selling the units. The moment you charge money you are just selling them. If you are selling them, you can't argue you're trying to target devs.

          But of course you can, if that is in fact what you are doing.

          Then they shouldn't be selling them to anyone who orders one.

          And apparently they are not anymore: they're no longer selling to China because they've learned they don't tend to end up with developers over there.

          The devkits are theirs to sell to whoever they wish, and if they don't want to sell to China then that's their business.

    • by dkman (863999)
      I too was wondering how this is any different than the big console launches lately. It seemed like half of the xboxes leaving Best Buy were being listed on Ebay. All these a-holes are doing is creating false demand and a shortage for people who actually want one. If someone is willing to pay more to get it from the a-hole rather than waiting for the store to get more then so be it. Honestly, I don't see a good way to only sell it to the people who actually want the product.

      I think the main reason that
  • Nothing new, this is just the modus operandi here in China. Anything, iPad, iPhones, tickets for concerts, movies, anything that has limited availability and a chance for slightly higher than usual demand gets scalped - even if it means ordering lots of stuff from overseas or smuggling things, like iPhones, from Hong Kong.

    The Occulus folks are just doing the same that Apple is doing - finding a way to ensure that the product falls into the hands of people who will actually use it. In HK it took them a coupl

  • by Rick in China (2934527) on Monday July 07, 2014 @12:55AM (#47397423)
    The only thing about this article that shocks me is the fact that the sellers were naive or ignorant of the fact that this is obviously going to happen, as it has with every device available in any market. There are many Chinese (especially students) who live abroad and have 'side-businesses' where they open up taobao stores and sell 'import goods' which are local purchases for them, they'll get you whatever you want from domestic western/1st world markets and mail them to you in China..
  • Wont be surprised to see Uculus Roft selling before Oculus Rift.
  • Yup... you know why? Because the Rift is practically a finished product. Now it's just coming down to who gets the product first. It could've been released with the first dev kit on a normal release cycle, but instead they've been holding it over people for half a decade. Sure it would've been buggy, but it's definitely getting fixed and being improved on. Now they're on gen like five and have pretty much a finished product and they're still releasing it as a dev kit.

    There is a point at which you're actuall
  • There is no way sales in China are "ALREADY EXPLODING!".

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