I strongly suspect $2300 was at or below their breakeven cost, even not including amortization of R&D, NRE, or CapEx. They are presumably well aware that building a platform dependent on applications requires network effects that can only come into play if you have a large install base of units. I don't imagine they attempted to sell the hardware at a profit, which would work against that.

As other commenters have noted though, the problem is not so much the price as not having a real target use case or audience. Hololens is similarly expensive, but Microsoft cleverly did a late pivot before launching the first one to an audience that actually had a need for it.

>I can't imagine that the cost of production is more than $500... start selling them at that price point.

You can't imagine that the cost of custom bleeding-edge hardware produced in four-digit-volume runs is more than $500?

In theory a lot of this funding should've been spent securing sales so they wouldn't be producing the items on a bespoke scale but instead would've been able to get the cost per unit down. I'm sort of amazed at the funding this has received when it seems to be performing like an underwhelming kickstarter.

Securing sales for an alpha prototype?

Yea honestly - that's the only way to do it when you're going out on a limb like this. That's why business often prefer more conservative incremental changes. These folks took a giant risk making such a drastic tech leap and they just need to reap what they've sown. They're selling units to the public so we're out of alpha, they're trying to pawn off alpha units as a finished product, or they really don't know what they're doing. Either way signs aren't great.

The original Microsoft HoloLens was $3000-$5000 and sold 50,000 units in two years. Now the US Army is paying them $480 million for 100,000 units. The problem isn't the price IMO, but the fact that Magic Leap hasn't been able to make a case for what exactly it should be used for. Random enthusiasts aren't going to shell out thousands of dollars, but a company or government definitely will.

The problem is that it doesn't work, it's bad. You can make a bad product with a company with a "valuation" in the billions, we need to start to understand that. And there's good alternatives to the product that actually do work better at a similar price point.

This is not a "product market fit" problem, this is bad tech being pushed down the pipes until it makes it out of a fucked up company.

In what way is it bad? From the various video reviews I’ve seen, it seems to work a lot better than the Hololens circa a couple years ago.

It seems to be significantly worse than the Lenovo AR toy lightsaber thing that clips onto your phone (similar to Meta’s design).

Other reviews in this post say that it’s not even as good as the original Hololens

I would call bullshit on that. Just the double FOV would make it barely usable compared to completely useless like the first hololens.

Maybe they don't want to sell very many yet? If the software is rough the last thing they want is a lot of unhappy developers complaining about the state of things.

I wouldn't panic just yet. I bet for every order of magnitude they reduce the price they will increase sales by an order of magnitude. Get it under $100 and the will sell millions of units.

Even worse they had a $2300 headset that they're selling to developers and they weren't showing real footage anywhere. I'm a be enthusiast and I watched all the videos and "news" on it and was thinking "show me the money". Turns out he had money it's the product they said they had that they didn't.

I agree that $2300 is a steep price for an experiment but I'm not sure you would want to base your price on the cost of production - why is that any better than any other arbitrary price?

Why not follow the model used by consoles and cell phones? Sell the hardware at a loss and take a 30% cut of software sales.

That won't work here, nobody would buy software for this thing because it's really underwhelming.

Doesn't that depend on how big of a loss they are willing to take? Say they started selling to developers for $1000 with the promise that the price to consumers would be $99 six months from now. I think that would ignite a lot of development.

That's like launching a game console with no games on launch day then. Even worse of a blunder from Magic Leap.

This would be really sensible especially giving the funding they've been floated - that said maybe their debtors are coming home to roost and they've been given pressure to avoid setting any more money on fire.