Facebook is closing around 200 of its 500 Oculus virtual reality demo stations at Best Buy locations across the US, Business Insider has learned.
The scaling back of Facebook’s first big retail push for VR comes after workers from multiple Best Buy pop-ups told BI that it was common for them to go days without giving a single demonstration. An internal memo seen by BI and sent to affected employees by a third-party contractor said the closings were because of “store performance.”
Oculus spokeswoman Andrea Schubert confirmed the closings and said they were due to “seasonal changes.”
“We’re making some seasonal changes and prioritizing demos at hundreds of Best Buy locations in larger markets,” she said. “You can still request Rift demos at hundreds of Best Buy stores in the US and Canada.”
“We still believe the best way to learn about VR is through a live demo,” she continued. “We’re going to find opportunities to do regular events and pop ups in retail locations and local communities throughout the year.”
Best Buy spokeswoman Carly Charlson said stores that no longer offer demos will continue to sell the Oculus Rift headset and accompanying touch controllers, which cost $600 and $200 respectively.
Oculus first partnered with Best Buy to demo and sell its Rift headset in April 2016. Only 48 Best Buy stores carried the headset initially, but the retailer later expanded the demos to 500 stores in August.
“It’s going to be really cool and fun for our customers,” Best Buy CEO Hubert Joly said at the time. “Virtual reality has the potential to contribute to our growth.”
Multiple “Oculus Ambassador” workers BI spoke with said that, at most, they would sell a few Oculus headsets per week during the holiday season, and that foot traffic to their pop-ups decreased drastically after Christmas.
“There’d be some days where I wouldn’t give a demo at all because people didn’t want to,” said one worker at a Best Buy in Texas who asked to remain anonymous. Another worker from California said that Oculus software bugs would often render his demo headsets unusable.
“They didn’t press on selling,” the worker from Texas said of Oculus. “Their main thing was to have us do demonstrations and get people talking about Oculus.”
A person familiar with the matter said that Facebook has thought about creating its own permanent storefronts to sell and demo VR, although any discussions about such an initiative appear to be in the early stages. Oculus named Christa Wittenberg as its global head of retail in January, according to her LinkedIn profile. The company has multiple open job listings for retail leads in North America and Europe.
VR headset makers, including Oculus, haven’t disclosed sales numbers. During Best Buy’s third quarter earnings call, its CEO said that around 300,000 demos of VR had been given across all of its stores to date. That number included Sony’s PlayStation VR and Oculus.
Facebook purchased Oculus in 2014 for $2 billion and an additional $1 billion in later payouts. CEO Mark Zuckerberg has said that virtual reality is the next major computing platform that will change the world, yet the technology has yet to break into the mainstream like mobile phones.
Zuckerberg recently said he plans to spend billions more on developing and marketing virtual reality over the next decade, and that Oculus “won’t be profitable for awhile.”
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