When Oculus finally revealed the official price tag of its consumer version of the Oculus Rift virtual reality headset at $599, it certainly caused fans to initially gasp at the higher-than-expected cost to pre-order the long-awaited headset.

Oculus founder Palmer Luckey took to Twitter to address some of the concerns regarding the headset’s price point, and explain that the company is not making money on the Rift hardware, adding that the $599 is, in fact, “obscenely cheap” for what is being offered.

To reiterate, we are not making money on Rift hardware. High end VR is expensive, but Rift is obscenely cheap for what it is.

— Palmer Luckey (@PalmerLuckey) January 6, 2016

In a Reddit AMA session Wednesday night, Luckey went into a bit more detail regarding the Rift’s internal hardware components, which include two custom-built VR OLED displays, as well as other high-end features and materials.

“The core technology in the Rift is the main driver – two built-for-VR OLED displays with very high refresh rate and pixel density, a very precise tracking system, mechanical adjustment systems that must be lightweight, durable, and precise, and cutting-edge optics that are more complex to manufacture than many high-end DSLR lenses,” Luckey explains.

“It is expensive, but for the $599 you spend, you get a lot more than spending $599 on pretty much any other consumer electronics devices – phones that cost $599 cost a fraction of that to make, same with mid-range TVs that cost $599. There are a lot of mainstream devices in that price-range, so as you have said, our failing was in communication, not just price.”

Luckey did however apologize for all the confusion and admitted that he “handled the messaging poorly” over what fans should have expected from the final price of the consumer Rift. Last year, Oculus indicated the price of the Rift headset would be somewhere “in the ballpark” of more than $350.

“I handled the messaging poorly,” Luckey expressed. “Earlier last year, we started officially messaging that the Rift+Recommended spec PC would cost roughly $1500. That was around the time we committed to the path of prioritizing quality over cost, trying to make the best VR headset possible with current technology. Many outlets picked the story up as ‘Rift will cost $1500!’, which was honestly a good thing – the vast majority of consumers (and even gamers!) don’t have a PC anywhere close to the rec. spec, and many people were confused enough to think the Rift was a standalone device. For that vast majority of people, $1500 is the all-in cost of owning Rift. The biggest portion of their cost is the PC, not the Rift itself.”

“As an explanation, not an excuse: during that time, many outlets were repeating the “Rift is $1500!” line, and I was frustrated by how many people thought that was the price of the headset itself. My answer was ill-prepared, and mentally, I was contrasting $349 with $1500, not our internal estimate that hovered close to $599 – that is why I said it was in roughly the same ballpark. Later on, I tried to get across that the Rift would cost more than many expected, in the past two weeks particularly.”

“To be perfectly honest, our biggest failing was assuming we had been clear enough about setting expectations….an assumption that myself (and Oculus) did not do a good job of fixing. I apologize.”

Regardless of price concerns, the first batch of the Oculus Rift headset pre-orders that was scheduled to ship in March 2016 sold out in a matter of minutes—with new orders shipping out in April, and continuing on all the way through June 2016.

The Oculus Rift will come packed with a number of goodies, including an Xbox One controller, a sensor, cables, Oculus Remote, as well as two games Lucky’s Tale and EVE: Valkyrie.