Monday, December 5th 2016
2017's Weak VR/AR Demand May Burst VR Investment Bubble
Many research firms' numbers have shown that VR product sales in 2016 have been weaker than originally expected due to both high product costs and lack of content. No-one has yet seen VR's killer app, after all, and I know I'd love to see another Halo-like product to drive awareness on the VR platforms like it did on the original Xbox.
All of the above lead towards Google's Daydream View, HTC's Vive, Oculus Rift and Samsung Electronics' Gear VR having all achieved sales that are not even close to previously-set market expectations, with even the current mainstream poster-boy for VR, Sony's PSVR, showing adoption numbers that are as lowly as low can be. Even in their home-field, Japan, a country known for being filled with tech-savvy and tech-crazed customers, only 0.7% of the existing PS4 and PS4 Pro user-base has made the jump for a VR headset.
Consider the amount of studios that have already committed themselves towards the development of VR/AR games (such as Crytek with their Robinson: The Journey and 4A Games with their in-development ARKTIKA.1). Then consider that demand for those pieces of software - and VR headsets themselves - has been weakening recently. The supply chain has already invested heavily into related developments: vendors such as Acer and Asustek Computer have shifted major resources towards development of VR/AR devices for 2017 and are expected to release them in early 2017. However, some market watchers are concerned that the VR/AR ecosystem may not be mature enough to contribute much to the players - and excess offerings for a low-penetration market will invariably lead to losses and, potentially, bankruptcy.
VR/AR technologies also require more improvement in order to stimulate demand from both the consumer and enterprise sectors. It will take more time before the VR/AR market may begin enjoying robust growth, and such a slower-than-expected development is putting pressure on firms that have invested resources into related development. Asustek will launch an all-in-one VR head-mounted device (HMD) in the third quarter of 2017, featuring built-in cameras, sensors and controllers. And for Q1 2017, Acer is planning to release a VR HMD based on the Windows Holographics platform that support mixed reality experience. The company has been aggressively cooperating with VR players, having invested in the IMAX VR Content Fund and established a joint venture with Sweden-based game design company Starbreeze to develop StarVR HMD.
However, these companies are relatively large and have varied streams of income, and a lower than expected adoption of VR is unlikely to bring their budgets into the red line. However, many smaller companies have sprung up since the availability of VR and AR as a market, intent on carving themselves a pie of it. For the smaller companies banking on VR and AR to power both their content and their revenues, wrong (maybe hopeful) forecasts of market value may yet prove their financial undoing.
All of the above lead towards Google's Daydream View, HTC's Vive, Oculus Rift and Samsung Electronics' Gear VR having all achieved sales that are not even close to previously-set market expectations, with even the current mainstream poster-boy for VR, Sony's PSVR, showing adoption numbers that are as lowly as low can be. Even in their home-field, Japan, a country known for being filled with tech-savvy and tech-crazed customers, only 0.7% of the existing PS4 and PS4 Pro user-base has made the jump for a VR headset.
VR/AR technologies also require more improvement in order to stimulate demand from both the consumer and enterprise sectors. It will take more time before the VR/AR market may begin enjoying robust growth, and such a slower-than-expected development is putting pressure on firms that have invested resources into related development. Asustek will launch an all-in-one VR head-mounted device (HMD) in the third quarter of 2017, featuring built-in cameras, sensors and controllers. And for Q1 2017, Acer is planning to release a VR HMD based on the Windows Holographics platform that support mixed reality experience. The company has been aggressively cooperating with VR players, having invested in the IMAX VR Content Fund and established a joint venture with Sweden-based game design company Starbreeze to develop StarVR HMD.
However, these companies are relatively large and have varied streams of income, and a lower than expected adoption of VR is unlikely to bring their budgets into the red line. However, many smaller companies have sprung up since the availability of VR and AR as a market, intent on carving themselves a pie of it. For the smaller companies banking on VR and AR to power both their content and their revenues, wrong (maybe hopeful) forecasts of market value may yet prove their financial undoing.
37 Comments on 2017's Weak VR/AR Demand May Burst VR Investment Bubble
VR/AR open up massive opportunities for artists, educators, programmers, marketing agencies, film students/students in general, transport and travel companies and on and on.
Much like Formula 1 drives automative engineering, VR will drive AR engineering and AR it looks like will become very popular in time.
Sure, price and exclusives are among reasons, but the biggest one is that only thing that VR has an edge over normal monitor is immersion and head tracking. Nothing else. Those weird air waving joypads are clumsy and limited compared to keyboard+mouse, it's still cumbersome device and it just can't be relaxing if you have to move around and hold your hands up in the air for 1 hour or more. It's no wonder why all VR games feel like clumsy tech demos. Because that's what they essentially are.
When I heard about Serious Sam VR I was a bit excited. I mean, it's a fast paced shooter with amazing visuals. And what we really got? A 2016 clone of Virtua Cop from 1996/1997. Seriously?
Do you know what WOULD work? Combining VR headset with the head tracking and integrate it with games we already have.
Imagine playing Alien:Isolation using traditional keyboard and mouse with 100% independent head tracking and aiming. This way you actually get best of the both worlds. Precision and complexity of keyboard+mouse with immersion of VR since you only see ingame world and you can move your head around to quickly observe things without moving the gun around. Sure, it would be a bit confusing at first, but anyone who played any tank game knows it can work (independent turret rotation as you move the tank around in other directions). Now, that I'd pay money for. But for VR we have now, meh. Not interested even the slightest.
Or imagine Need for Speed with car interiors that you drive with keyboard or gamepad and you can move your head around within the cabin using VR. Superior immersion and usability since you can observe the world by moving your actual head while sitting comfortably on a chair. Again, that is what I'd pay for.
Perhaps if they found a way to interface with these smart screens we have, that already have some VR stuff, and an gyroscopes and accelerometers, and all the fancy stuff and cost a lot...... But nah, lets make proprietary stuff cause that has always worked....
Lack of the killer app on any of the platforms is far more detrimental to VR than the handful of exclusives released thus far. Noone will care enough to buy hardware until they are shown some truly great software. (And even then, there are plenty of people who won't buy it just because they don't want to like it no matter what). I will also throw smartphone headsets into the 'bad for VR mix', as watching a 3D 360 video on youtube is not VR nor is it impressive at all, but this will be many peoples first introduction to the genre and surely isn't going to compel them to want more.
VR is going to be viewed as a gimmick though as I have seen you saying for quite sometime now. It is not something the masses wanted or have asked for in the first place, and is very niche. Also, there is no content that truly takes advantage of the hardware potential, and only looks to re-imagine all the existing stuff we already do on a flat monitor. I think content creation such as Oculus Medium and Quill is going to be more suited to VR than content consumption. I'm sure artists and 3D modelers will not sustain that market (though I am happily going to be using Medium starting tomorrow)
Less than .3 of steam users. And that figure is flat for the last few months.
For one thing, using envelope for Windows I have not been using my monitor for almost two weeks now. I can strap on my Vive and complete all of my computer works in VR. It is pretty amazing as you are not bond by the size of the monitors any more. This for one is way more important than VR's use in gaming.
As I have mentioned before in my review for VR it will take time for the new tech to become mainstream. We still need way better GPU to provide 4K resolution VR HMD at great framerate. Neither AMD nor nVidia can do that for now. Within a few years though it will be a lot different. Some of the nation's top research labs are already adapting the idea of using VR to directly visualize microscopic images. A cellular biology lab I used to work in have already come up with ways to basically "teleport" you into live scanning electron microscopic imaging of cancer cells with HTC Vive. The results were mind blowing as it provided a complete new perspective in terms of cell membrane dynamics as well as biophysics at such scale.
This is not a gimmick. It will revolutionize our lives.
Betamax was real popular for certain applications, but bombed in the general market. So did laserdisk, so did HD DVD, ece. VR is like laserdisk, really cool, but ultimately too expensive and annoying for most users, combined with VR sickness.
you use envelope, and that's great. But your typical business or home user is not going to shell out hundreds upon hundreds of dollars for a VR headset, dedicated GPU to render it, open up their PC to install it, ece. It's just not happening. And the enthusiast market is not going to be big enough to support VR forever.
This is fundamentally different from the 3D TV hype.
As for the cost. Well it is not even as expensive as most flag ship smartphones. Don't write something off so eagerly.
In terms of professional market not big enough I can tell you that is dead wrong. Have you ever heard of Illumina? The company that makes DNA sequencing machines? Probably not. They live just fine by only supporting research institutes both private and public. As a matter of fact these big research institutes and education facilities are the key for VR to success. Consumer product for average folks will take some time to mature to the level of smartphones.
Give it some time to mature. Also, please take a look at Google's Daydream system as well as Microsoft Hololens. There are not so hardcore VR/AR out there just for evertday people.
Will they both hook to my PC and look amazing? yep
Am I taking a risk with so few titles available? yep
Does it look like the technology is going to mature making my purchase obsolete very quickly? Yep
Sure it costs as much as a smartphone, but a smartphone does more than one trick, VR does not.
VR is currently the cart in front of the horse.
VR also has unique hardware requirements that even further narrows down the scope of viable consumers.
I do agree its very different from the 3d tv garbage, but there is an immense amount of work going into physical ailment prevention using these headsets. The complaints are legit, I love all kinds of twisty turny movement harassment on rollercoasters and such, but there have been a few times I noticed the headset definitiely fooling my body into feeling bad. It wasn't strong, but I could imagine general consumers having more trouble for sure.
I think the real block right now is that the hardware is still extremely immature. Finally consumer ready? sure. But it's not the quality experience it certainly can be. 1080 per eye is still not nearly enough to provide consistently clear and enjoyable views. Lenses are still a bit tricky, and there's not a ton of extremely enticing content yet.
However, since the headsets are finally on the market, it can finally start to trickle out to users and developers with these grand ideas. Stuff like Plants vs zombies and Minecraft didn't happen on day 1.
1) More content
2) Cheaper prices
3) A more mature product (fear of it being obsolete in 6 months to a year)
I've almost compulsively bought a vive, because it would be cool to try. But I was able to restrain myself, and glad I did.
When you see more press than actual products and marketing campaigns with no real interest in a product (except from a few geeks), you can bet the house you've got a dud on your hands. Just sticking with recent history, one can easily add smartwatches and curved TVs to the list.
Be open minded is all I am trying to say.
Elite: Dangerous I think is a good living example of VR done right in a lot of ways.