Virtual Reality

Why VR numbers are irrelevant

The latest signals from the VR market are sobering. But these figures have little to say about the technology's future potential.

05 Jan. 2017 Luca Caracciolo
VR Zahlen

Supposedly negative market signals are coming in from the VR sector at the end of the year:

The talk is of indie developers who can't get into the black despite their one-man-show approach, and who are recommending people stay away from VR development despite the fascination with this new medium, given the financial risks – unless you're being bankrolled by one of the big platform operators.

Not for the first time, we're hearing reports that German flagship developer studio Crytek is struggling financially and hasn't paid wages in months. One of the main reasons cited is their focus on virtual reality projects. Data analysts have repeatedly lowered their forecasts concerning sales of the most popular high-end VR platform Playstation VR this year. And last but not least, the recently announced restructurings at Oculus are likely also an indication that this Facebook subsidiary is not performing as expected.

Virtual reality: Technology and sector still at their beginnings

Those who claim that the VR hype is going to die a slow but certain death are forgetting the complexity and dynamics of cultural adaptations to new technologies. And also underestimating the time such adaptations take. We should simply think back to the 1990s and how people who were on their phones out in public were seen as aliens – years before the first smartphone.

Quick reality check:

That sales of Playstation VR (market launch in October) haven't soared into the millions by the end of the year, is understandable. There is still a lack of even high quality content, the killer argument for gaming fans – and you don't just pull €500 out of your pocket every day. That VR systems like Oculus Rift and HTC Vive, priced close to €2,000, are not an immediate hit – no big surprise. That Daydream and Gear VR on the mobile side aren't making real economic waves this year is also understandable; mobile VR platforms – at least so far – are merely a small window into what high-end VR can do. That it's hard for indie developers to create major successes in 2016 without investment or financial support from large players or platform operators: We could have at least imagined that at the beginning of the year, no?

The most important challenge for the coming year is clear: Far more great VR content is needed. That's why it does little good to lament the exclusivity of VR titles. In an ideal world there would be a standardized VR platform and every household would have a VR headset at factory rates. But as long as this is still a fantasy, the actual structural and economic conditions have to be dealt with. That means exclusive deals, like Robo Recall from Epic Games, which cost USD 10 million in production and quite simply wouldn't exist without funding from the Facebook subsidiary. Let alone a proprietary platform like Sony's Playstation, which very naturally wants to keep their most important titles exclusive as long as possible, its own franchises for the long term. But I prefer this scenario, to tons of mediocre VR titles and experiences that make me sick. Only when the infrastructure has improved will smaller developers be able to make a living from their VR productions. Right now it's understandable that this is hard.

Oh and remember: The first iPhone reached the market in June 2007, and only 1.4 million had been sold by the end of that year.

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