Meta's Quest 2 Headset Price Hike Leaves Analyst Worried About The Gear Losing 'Critical Competitive Advantage'

Meta Platforms, Inc. META announced Tuesday that it increasing the price of its Quest 2 headset by $100, beginning August.

The price hike may hurt Quest 2’s demand and its hardware supply chain shipments, analyst Ming-Chi Kuo, best known for accurately predicting Apple, Inc's AAPL products-related updates, said in a tweet.

Meta’s VR ecosystem is still insufficient to attract users, the TFI International Securities analyst said.

“The more-affordable price had been a critical competitive advantage for the Quest 2 vs. competitors,” Kuo said.

Oculus Quest 2 is a VR headset developed by Facebook Reality as a successor to the Oculus Quest. It was announced in September 2020 and made available a month later.

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Meta said the 128 GB Quest 2 headset price goes up to $399.99 and the 256 GB model’s to $499.99. The company attributed the price hike to the need for continued investment in moving the VR industry forward in the long term.

Meta’s Reality Labs has been a bleeding business. In the first-quarter earnings report, the company said it generated revenue of $695 million, up from $534 million a year ago. The division’s loss from operations widened from $1.83 billion to $2.96 billion.

Price Action: Meta stock closed Tuesday’s session 4.50% lower at $159.15, according to Benzinga Pro data.