In the company’s most recent earnings call, HTC confirmed it’s making a profit on each Vive headset sold, and that the company has sold “much more” than a widely reported 140,000 units.

Following recent financial troubles from the tumbling smartphone portion of the company’s business, HTC points readily to their relatively new VR business as a beacon toward recovery and eventual growth. In accordance with a Q3 investor earnings call, the company reports “continued sales momentum for the HTC Vive systems across
both consumer and enterprise markets.”

“Much More”

Analysts and investors hoping for a strong HTC comeback pressed the company for details on performance of the Vive’s sales and growth during the Q3 earnings call. Like its competitors in the VR space, the company has declined to give specifics on headset sales this early in the development of the product category, but did respond to questions about a 140,000 unit sales figure that was reported initially by Chinese VR site 87870 and subsequently picked up by many others.

HTC's Chia-lin Chang,
HTC’s Chia-lin Chang, President of Smartphone and Connected Devices

“Right, so I think this is a good question because I also read the [reports about the 140,000 unit sales figure]. I actually talked to [HTC Chairwoman] Cher [Wang] on that,” said Chia-Lin Chang, President of Smartphone and Connected Devices at HTC, in response to a question by an analyst at Arete Research.

“I don’t know [how] this 140,000 number came up. Cher comment[ed] on it, and I can confirm to you here that her comments, basically—of course it’s higher than 140,000. It’s much more than that number,” Chang continued. “But I will not be able to give you a number, and I would encourage you guys not to refer that number. That seems to be anchored fully on something that we have no idea where it came from.”

HTC-led Venture Capital Consortium Represents $10 Billion Earmarked for VR

The seemingly awkward response may be explained by the company wanting to assure investors that sales are better than the reported figure while not wanting to disclose the actual figure. Chang explains why:

“You can see that—from HTC perspective we’re also interested in knowing [competitors sales figures], just vice versa in the other people’s shoes they want to understand HTC. That’s why I would never disclose [the exact figure], because this is the best protection of HTC interests, shareholders, in the long term,” he said.

Previously we had correlated SteamSpy ownership data for bundled Vive games as an indicator of the HTC Vive install base, but—depending upon exactly how much Chang means when he says “much more than that number,”—the method may be flawed. Presently Tilt Brush data would be the best indicator for that method, as it’s the only game that’s been bundled with the Vive since launch; its current ownership figures would suggest a Vive install base of 143,000 (± 10,030) units, but this may not account for enterprise sales of the Vive business edition, and would exclude some number of Vive units unless the Tilt Brush bundle applies to every region where the Vive is sold (which at this time is not clear).

“What I can tell you is, we—as I say, last time, on the last earning call, we were happy [with] the selling condition [of the Vive] as to the last earning call. I’m very happy to report to you that we continue to be happy with the current selling condition in last quarter,” Chang said in the earnings call. “And we’re looking to hopefully a good—I don’t mean to forward looking, but we’re hopefully looking for a good, happy Christmas shopping season for that.”

Chang likened the current VR landscape to a “horse-racing land-grab era,” though he did admit, “I’m not sure it’s the right, appropriate description.” Ultimately he called this portion of the company’s business “the beginning of something very fast expanding, exciting era.”

Sold for Profit

Chang also confirmed another interesting detail, the company does “sell per-unit Vive at a profit.”

Vive-consumer-unboxing (67)
There’s actually quite a bit of hardware in the Vive box.

While it might seem obvious that an $800 product would be profitable, the notion of profit doesn’t quite jibe with past statements from Oculus who said that their $600 Rift headset was being sold at-cost (no profit). Both headsets have a similar set of components and requirements, and when you add on Oculus’ $200 Touch controllers, the systems units are identically priced.

Without more details—like what exactly the company tallies as contributing to the cost of each headset—it’s tough to say for sure, but there’s a few ways to attempt read this. First is that HTC may simply have a more efficient operation when it comes to producing and selling the Vive—which the company is said to manufacture itself—compared to Oculus. Another possibility is that the per-unit sales may not have been profitable to start, but eventually achieved profitability as the requisite processes improved. Oculus too, may no longer be selling at-cost, or may not ever have been if the cost definition is applied consistently between both company’s operations.

Oculus Rift Components Cost Around $200, New Teardown Suggests

Of course the question remains then for consumers, exactly how much profit are we talking about? $800 is a hefty price to pay, especially for products still in the early-adopter phase, and there’s no doubt that VR needs to get cheaper to spread widely.

Regarding the question of mainstream pricing, investors too want to know what the price trajectory looks like for the Vive going forward. Naturally, that’s not something HTC was ready to give much detail on, but Chang shared, “So we do think we have a good pipeline [for reducing consumer price point in the future]. This is a long-term game for HTC.”

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Ben is the world's most senior professional analyst solely dedicated to the XR industry, having founded Road to VR in 2011—a year before the Oculus Kickstarter sparked a resurgence that led to the modern XR landscape. He has authored more than 3,000 articles chronicling the evolution of the XR industry over more than a decade. With that unique perspective, Ben has been consistently recognized as one of the most influential voices in XR, giving keynotes and joining panel and podcast discussions at key industry events. He is a self-described "journalist and analyst, not evangelist."
  • Me

    About profit: if they still can sell it with a 100$ discount for thanksgiving, it probably means that their margin must be somewhere in this area, perhaps more. It’s not Apple-like 30%, but decent for this kind of product. In any case, enough for HTC to make it a sustainable and profitable business, which is good news for their consumers.

    • David Herrington

      I agree with your logic. Which means if their total units sold are about 143,000, that their total gross sales would be about 114.4 million USD and their total profits will be about 14.3 million USD.

      • Me

        I mean, they wouldn’t go all in with all their investments if it weren’t profitable in the first place. So many funds, so many VR cafés, so many things happening and half we don’t even know of.

        Today I saw some third party VR accessories (headphones) in my local store and I saw the Vive mentioned along the Rift and the PSVR on their boxes. This means the market really treats it like one of the huge players in this area, it’s not just a distorded view from VR enthusiasts which is also a good sign imho.

    • polysix

      Rift breakdown inc manufacturing and all extras = $200 and sells for $600 (and they lied about ‘at cost’) so factor in at least 100% profit/Markup maybe even 200%

      • Andrew Jakobs

        yeah, let’s not forget R&D which isn’t factored in that price, and it was an estimate, as they didn’t know how much some components like the lenses cost. ‘at cost’ does factor in stuff like R&D and other overhead stuff..

      • Get Schwifty!

        You are mistaken if you believe that there is a 100% markup on either headset, or that the manufacturing costs are that cheap. Costs to retail include a markup for all kinds of things, and the units are sold in lots for less than final MSRP by 10-15%. The OEM keeps the price high enough (normally) to no compete with their resellers like Best Buy, etc. Even if the HTC numbers are as high as 250K (I personally suspec they are closer to 200K), they “profitable” because they have surpassed the poitn of production to recoup investment costs. Likewise, its possible (though less likely) that Oculus has crossed this boundary yet.

        What you and I typically think of as “profitable” is not the way industry insiders use it when discussing unit costs. Those new to the idea think per unit at any point, this is not how people like the guy from HTC use the term, they are referring to a point in production where they have recouped R&D, manufacturing, etc. and new units are indeed profitable. At the final end of a run is the only point you really understand how “profitable” each unit really is.

      • kyle

        your forgetting things like R&D costs, and scrap which is a major cost. Youd honestly be amazed at how much stuff becomes garbage at the start of manufacturing. The company I work for I have seen toss as much as 50% of a new product coming off the line when it doesn’t pass certain tests fully.

        • kyle

          Crap I also forget machine tooling costs… this can be in the millions easily…

    • Suppose you can guess whose voice this was read with…

  • Steve Biegun

    I would hope they sell it at a profit rather than at cost. I’m looking forward to seeing an incredible Vive 2.0.

    • Akeydel

      Also at a profit, ofc.

  • DiGiCT Ltd

    Valve dev video on youtube mention there are sold over 1 million high end VR devices worldwide.
    I assume this is rift and vive, not sure psvr be included in his.
    Also not sure if thats accurate or not, but eitherway the number could be right if you add all those devices been bought for exhibitions worldwide.
    Half a million could be more realistic for both vive and rift together.
    Adding the previous dev kits to the line 1 million is reachable i thing, although not all are gamers.
    It is a shame we as devs cant really get a clue how many there realy are in use.

    • Jim Cherry

      most analysts i’ve seen do include psvr in the high end category as it is clearly not mobile vr and no other console has vr right now so we cant really call it console vr.

    • Simon Wood

      > It is a shame we as devs cant really get a clue how many there really are in use.

      Get the community to ‘man up’ and share their serial numbers. Even if only 5% responded to the call it would give a good understanding on how many units have been made,

      • David A Bacher

        The Steam Hardware Survey:

        There are 125 million Steam users, we don’t know how many have opted in to the hardware survey. Some users who opted in may have more than one device.

        There are 0.2% of participating machines that contain a Vive headset, and 0.13% that have an Oculus headset. That means, on Steam, assuming it is representative, there are about 412,500 users who have either a Vive or and Oculus headset, and about two users have a Vive for each one that has an Oculus.

        That’d put Vive’s number closer to 250,000 — which indeed is substantially above the 140,000 — but below the number of electoral votes required to secure a clean victory. Oh sorry, running numbers for the wrong thing.

        Unity may have this number available — I couldn’t find it instantly, but they’d know what headsets they are seeing and could provide that information as part of their hardware survey. Unreal Engine may have the number as well — I don’t think CryEngine has a survey enabled by default, but could easily be wrong.

        • Tony Murchison

          This figure is probably slightly skewed – I imagine that people who are proud of, and involved with, their hardware might be more inclined to participate in the Steam survey than your average casual gamer. That would cause VR setups to be over-represented in the survey.

    • Yore VR

      This wouldn’t include the PSVR as it’s sold 1.5 million all on it’s own so far

      • DiGiCT Ltd

        Ok. i thought so, although the 1 million vive and rifts can be correct too, only many are used also for exhibitions and arcade.

  • polysix

    Oculus were never selling at cost, it’s facebook, they lie, haven’t you realised that yet?

    The breakdown put it at $200 that includes almost everything you can think of (inc staff, manufacturing etc). Add in a bit for R&D and yeah, rift is x3 mark up! Same as vive.

    both must be half price in gen 2 if PC VR is going to go anywhere (inc having a big enough market for devs to bother with)

    • benz145

      The $200 figure was an estimate and only included components and assembly:

    • DiGiCT Ltd

      Ofcourse they lie, they do that often, however HTC is more transparent and straight forward.
      It was the mayor part that let me choose the vive ahead of the others…. reliability.

    • Get Schwifty!

      It never fails to amaze me how people read things without thinking but apply pre-judgments… if Oculus says they are selling “at cost” that is entirely reasonable for a smaller number sold at the time the statement was made, and this is inline with a more current statement by HTC that they are selling at a profit. Now, bear in mind, this “profit” might be literally $0.01 USD, so technically they could be selling at a profit but clearly not much.

      it would make no sense for Oculus to say they are selling at cost, this is not a good business statement, in fact it is quite “transparent” a statement. Why? Because the hardware play and hence profitability is more of a concern for a vendor like HTC than for FB/Oculus which are more interested in VR development. Frankly, they dont care about making money on the hardware currently, that is not part of the equation but it is with HTC, which is why they need to keep the buyer hot to buy the next piece of hardware.

  • Christopher Heddle

    FWIW – I’m in Australia and its only been this month that Australians can actually buy the Vive from a retailer – no free bundles games for us so you cant use steam game ownership to determine player base. within my relatively small circle of friends we have 4 vives… these things are definitely selling well

    • upudisqus

      Good to hear that. Does anyone know why there’s no free bundles in market like Australia?

      • Bob

        Hey guys… There is free content if you buy in retail… Check with your retailers for the link to redeem…

  • epukinsk

    Jive is a dance. Jibe is what happens when two things are in agreement with each other. It comes from sailing when the boat would be shifted in accordance with the wind.

    • benz145

      TIL. And now it’s fixed : ).

  • Interesting all the conversation about price above and in the comments.
    About sales number, I don’t trust anyone.

    • Get Schwifty!

      You can be sure they all obfuscate and distort. This notion that somehow HTC is a good company is baffling… what they are is good at playing the mass hardware marketing game. Facebook is not and hence appears to “lie” more, when the reality is it is just their lack of experience more than anything else in navigating a world HTC has been in for some time. It might be an age/experience thing… people in my generation grew up knowing companies were all in it for themselves, there is no doubt about this, not an age where companies plant a few trees and use spin doctors to make themselves out to somehow be socially/environmentally conscious when the reality is they couldn’t care less about anyone than their C-level executives and shareholders.

      • CaptainAwesomer

        You are so wise. I enjoyed reading your comments more than the actual news story itself.

  • I ordered a Vive in the Black Friday sale. I’m in the UK.

    I was sent a code for some games on Steam, but Tilt Brush wasn’t included, so unless there’s a code as a pack-in with the physical unit, it would suggest that Tilt Brush is no longer going to give a reasonable approximation of sales.

  • Evan Meagher

    I got my Vive on Black Friday as well and there hasn’t been a copy Tilt Brush included for a bit now. I’m sure the sales numbers are doing great. I have not seen anyone try VR and dislike it. I got quite an assortment of games on sale, plus a stack of free ones including The Lab. It’s enough to stay entertained for a long time.

    I hope HTC and SteamVR flourish and usher in a new era. The Vive experience is hands down the coolest ever.

  • wow so many less-negative comments,,Its so rare..XD!