Tech Talk: Slow Growth For Premium VR Is Putting Focus Elsewhere

Your body feels like it's shaking. A sheen of sweat makes you really feel the cool air in the cockpit. Your vision blurs just a bit. Your heart is pounding in time with the explosions coming from the barrel of the cannon just outside the cockpit. "BANG!" Another bolt of plasma makes its way toward your fleeting foes. An explosion in the distance confirms your dominance of the battlefield. Adrenaline courses through you, and another neural impulse rockets from your brain to your thumb. A sudden impact rocks your ship, red lights flash, and alarms blare. You barely have time to panic before it's all over. After a few seconds, you set down the Oculus Touch controllers and take off the headset, breathing hard. Yes, premium virtual reality experiences can be incredible, but apparently not incredible enough to incite the kind of sales that makers have been looking for, which means that many software makers that were watching premium VR closely or experimenting with its early days are moving elsewhere. The biggest obstacle to adoption seems to be price; while that problem will be solved in due time, it looks like it won't be solved fast enough to cause a mass exodus towards the premium VR landscape. So, what will happen to premium VR? What will rise to take the place it should have taken in the mean time? Will it survive?

Through the course of 2016, less than 2 million units made it into homes worldwide, between the Oculus Rift, HTC Vive, and PlayStation VR. Naturally, the console-based solution was the clear market winner with somewhere in the area of 745,000 units sold. Their key to success? Ubiquity. The PlayStation 4 was already popular and mainstream, far more than expensive gaming PCs, and the headset itself was just under $400. PC-based headsets did not do quite as well. Even with the relative success of the PlayStation VR, the whole space is in a bit of a quandary. VR game studios are backing off left and right, and either giving up the ghost, heading over to the world of mobile VR, or going into traditional game development. The tale of RocketWerkz LTD. is a clear cautionary one; they spent about $650,000 developing VR shooter "Out of Ammo", and failed to recoup those costs at $20 per copy. Even use cases outside of gaming are suffering, as shown by the closure of a startup called Envelop VR, despite garnering around $5 million in funding. Envelop VR's entire shtick was to immerse users in traditional PC applications, allowing people to work, edit images, and otherwise generally compute in VR.

Mobile VR, meanwhile, has the opposite problem. While practically everybody has a phone that they can throw in a Cardboard, Gear VR, or Daydream View headset, developers have yet to really crank things up. Daydream's integration with Unreal Engine 4 and Unity promises to provide a great gaming experience, but so far, there's nothing quite up to the sheer scale, beauty, and immersive nature of Resident Evil 7 or EVE: Valkyrie in the mobile space, though some games like Minos Starfighter VR, VR Fantasy, and The Bet are striving to bring high-quality mobile VR to everybody. Naturally, exclusive games like EVE Gunjack and Layers of Fear: Solitude are pumping things up a notch, but their ability to serve as mobile VR ambassadors is a bit hampered by their exclusivity to their given platforms. Mobile VR right now mirrors the early days of the Nintendo DS, with high-quality titles peppering a highly experimental landscape. Direct comparisons can even be drawn, such as between Layers of Fear: Solitude for Daydream and Dementium: The Ward for DS. In short, it seems as though mobile VR won't be truly taking off for a while.

So, if mobile VR is still being built out and premium VR has all but hit a wall, what should consumers and developers look to in order to fill the gap? Right now, the most popular answer seems to be augmented reality. Tango debuted on Lenovo's PHAB 2 Pro and found itself alongside Daydream on the ASUS ZenFone AR. The technology merges the digital and real worlds, and at least one Googler is actually excited to see the tech combine with VR in a meaningful way. Meanwhile, Magic Leap is making waves and leaking prototypes. While AR has been up and coming for some time, the massive success of Pokemon GO put a spotlight on a very, very nascent field, so now developers have some pressure and motivation as the masses watch with bated breath, waiting for AR's use cases to present themselves in refined forms. Artificial intelligence and the Internet of Things, sparked by things like Nest, the Amazon Echo, and Google Home, are also starting their bid for consumer mindset. So, can VR catch up, or will it be overtaken by something else and end up a flash in the pan? It's really anybody's race at this point, but consumers will be the real winners; when everybody votes with their wallet, it doesn't matter who crosses the finish line first, only the best products will keep on racing.

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