Why VR Excitement Needs to Come Back to Reality

Bryan Cashman is the founder of Callvention, a service enabling phonecalls with game developers.

The VR industry is off to a strong start, but has a long way to go before being a success.  The excitement is real and rational - we finally have strong VR hardware on the market, and by the end of the year consumers will have even better headsets.  But looking at VR without emotion reveals a market with a number of challenges that may never be resolved. 

We have quite the market, when we combine all platforms

At a first glance, the market for VR games seems strong.  SuperData Research is expecting 7.2 million VR headsets to be on the market by the end of the year.  To put that in comparison, by the end of 2013, Sony’s first year with Playstation 4, there were only 4.2 million consoles on the market. VR will have a big 2016, and finally a market size where developers can begin to focus on the platform. 

While those numbers are divided among four platforms: HTC Vive, Samsung Gear, Playstation VR and Oculus Rift, they are still meaningful, especially for developers working with middleware that can help ease development challenges across each device. 

However, without a clear market leader, and with VR in its infancy, developers may be overly cautious to develop to the hardware strengths of one particular VR platform over the other.  As great as Vive’s full-room VR experience is, it may be hard to focus R&D dollars on the platform until future growth. 

Today’s VR owners are diverse

Game makers are posed with a challenge across VR, as owners across platforms have wildly different needs.

Half of the projected VR units on the market this year will be for Samsung Gear, some of which will be in the hands of consumers as free giveaways with the purchase of other Samsung hardware.  These freebie owners may not be the type to buy innovative creative indie titles, let alone vibrant and chaotic core games.  

While Gear is clearly the entry-point for most consumers into the VR world (and the Oculus ecosystem), owners of the Oculus Rift will have different demands.  Users who dish out $600 for the VR headset, and who also pass the “Make sure your Windows PC is Rift Ready!” test, will likely be gaming veterans, and ready to spend on vibrant core gaming experiences and innovative VR sessions that provide a new way of gaming. They may also be expecting high production value content that is expensive to produce.

Last, Playstation VR will be an obvious choice for VR enthusiasts who own Playstation 4, but will they accept traditional PS4 games with simple VR-additions, or will they want something new? 

Andrew House, President of Sony Interactive Entertainment, thinks VR gamers will want bite-sized experiences. "The big positive I do see for VR [games] is that unlike conventional game experiences - which tend to be similar to blockbusters in terms of production values and complex game mechanics- they can offer simple mechanics and experiences that are still very, very enjoyable because they can give users something they've never done before," said House. "That, I think, is where its true potential lies."

As a game developer or publisher, the fragmented consumer base makes investing in a big game challenging, something recently reiterated by a number of publisher executives. 

Focusing on one platform is not commercially viable

Given the disparities in consumers across each VR platform, and their different technical capabilities, one might think targeting one platform for an initial release will help a developer focus best for a game’s release.  However, commercially that option is not viable.

To restate 2016’s estimated VR sales, we have Gear selling 3.5 million units, Playstation VR selling 2.6 million units, and Vive and Rift sharing the remaining 1.1 million hardware purchases.

Those are tiny markets for a developer or publisher to focus on exclusively.  A market of a few million potential customers, of which absolute best case only 20% of those will buy your game, is not enough to enable exclusive games.  A look at these numbers easily explains why companies like Oculus are more than willing to heavily subsidize VR development in exchange for exclusivity.  Otherwise, the numbers do not work for developers.

VR isn’t going to be huge for some time

Some will comment below that VR is still early, and that VR will be bigger next year, and bigger the next, and that it will eventually become a truly viable hardware revolution for gaming, akin to the first home console, the analog stick, or to online gaming.  All of this may be true.  I am not questioning whether VR will eventually be the way we participate in all of our entertainment, and whether it will be a primary form of how we interact with others.  But this year, and next year, and the year after, are not built on the works of science fiction.  They are built on the reality of a platform that has a long way to go to maturity.

Seven million headset sales this year is fantastic, but beyond early adopters, how many more will purchase VR headsets, with an end goal of of mainstream adoption?

VR platform sales have to leap ahead of a chasm for mainstream success, with which they enter the cultural zeitgeist not as humorous sci-fi technology, but as a welcome addition to everyone’s home.  To get there, VR has a number of challenges to solve, and today’s hardware doesn’t provide the answers.

Who’s Sick of Hearing This One?

I used VR for years and didn’t truly feel sick until last month, while playing Resident Evil in Sony’s E3 booth.  I recently learned that I wasn’t alone. It is a fact that today, even after significant investment in R&D, some people feel nauseous while playing VR.  If enthusiasts are sick, and writing about it, how will mainstream consumers feel about trying VR?

Consumers love trying new things, they love innovation.  A search for the novel is every music agent’s job.  But no consumer wants to throw up, and as crazy and unrealistic as it is that it will actually happen, it’s enough of a barrier to keep many people away.  VR has a long way to go before it can replace the images of everyone’s grandmas playing Wii Sports. 

That Last Level is Hard

Even if the VR experience is perfected, and a joy to play for most, there are still significant hurdles before the install base grows enough to satisfy big budget titles, or even the focus of smaller developers who can only bet on one game at a time.

Today, the mainstream consumer knows little of VR.  Half of consumers surveyed by SuperData Research aren’t interested in VR, or don’t even know what VR is. 

And it’s hardly proven that consumers in general will want VR.  3D headsets are completely counter to today’s technology trends.  People today want instant gratification, everywhere.  Many people spend more dollars on their smartphones and tablets than they do on their computers, or even their televisions.  Technology spending continues to move towards portability. 

Yet VR is a stationary and closed experience.  It’s no wonder why Oculus staff tried distracting me twice while taking photos at their booth.  The activity itself looks unsocial. 

The last hurdle for VR is cost.  Cost curves will improve, and headsets will get cheaper, but at the same time, hardware specs will continue to improve and increases costs, preventing overall price tags from dropping.  The unprecedented announcements of enhanced console editions for Playstation 4 and Xbox One will enable stronger VR experiences, but only to those who can pay the higher price tag of those systems. 

Rock Band and Guitar Hero proved large audience would spend a few hundred dollars, in addition to purchasing their consoles, for a social and striking experience.  Microsoft managed to sell (at minimum) 24 million Kinect cameras for 360, although many were bundled with the hardware.  Still, neither could sustain consumer interest for multiple years, and all are largely abandoned platforms today. 

While VR is off to a good start, the challenges ahead are immense.  At E3, many I met talked of VR as a sure thing, but the reality is much different.  Let’s take our goggles off for a few to look at where VR really is, and to see what we can do to help VR reach its full potential.