Quote:Many research firms' numbers also have shown that VR product sales in 2016 have been weaker than originally expected due to lack of content and high product costs. Google's Daydream View, HTC's Vive, Oculus Rift and Samsung Electronics' Gear VR have all achieved sales that are weaker than market expectations, and even the current mainstream poster-boy for VR, Sony's PSVR, is showing adoption numbers that are as lowly as low can be (even in Japan, where Sony expected the PSVR sales to be greater - 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.
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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.

Quote:Currently, the HTC Vive is up to 0.21% of total Steam users, while the Oculus Rift has ticked up 0.01%. This isn’t necessarily bad news — we don’t know how many people run Steam and participate in the survey, and that matters when trying to estimate total VR sales. These increases, modest as they are, still likely reflect some tens of thousands of unit shipments. That’s not exciting relative to the entire gaming market, but it’s not bad for an extremely expensive technology currently marketed towards early adopters.

The big question will be what these figures look like come January. Sony, HTC, and Oculus are all hoping for significant holiday sales for their various VR initiatives, and these figures will be watched closely to measure how excited consumers are (or aren’t) about VR headsets.

Quote:The story of 3D’s rise and fall is a cautionary tale for the VR industry as well. I love VR and would like to see it shape the future of gaming, but many of the issues that doomed 3D TV and 3D content could also kneecap VR adoption. Like 3D, it requires expensive, personal peripherals. Like 3D, games need to be designed explicitly for VR in order to showcase the technology to best effectiveness. Like 3D, VR can cause nausea and headaches. Like 3D, working in VR has an entirely new set of best practices, some of which aren’t intuitive to people who spent their careers working on conventional design.

There are two major differences between VR and 3D. First, VR is a stronger, more immersive experience. I hate to fall back on the “But it’s really cool, man” defense, but it’s honestly true. If 3D was more immersive than 2D by virtue of having things leap “out” at you, VR is more immersive by virtue of making you feel like you’re actually there.

Second, VR is debuting as a gaming peripheral, and gaming is still much more of a solo activity than TV watching (and PSVR even tries to solve this issue by allowing output to a second screen). That alone may make the difference, provided the gaming industry can push content that takes advantage of virtual reality quickly enough for people to want to buy it. But either way, it’s worth remembering that many of the forces that killed 3D TV could wind up killing VR as well. If game developers want to avoid this problem, treat 3D as a cautionary tale of a new technology whose promise and potential never justified the cost and headache in the eyes of the general public.

RIP 3D TV: 2010 – 2016. It’s hard to believe you were with us for just six years. Your various promises of washed-out colors, expensive glasses, limited viewing angles, extra wires, and specialized television sets somehow never caught on with the mass market, even though 3D gaming via Nvidia’s 3D Vision was actually pretty cool. May you find a better adoption rate among the angels than you were gifted here on Earth.

Quote:In May 2016, Oculus VR and Best Buy teamed up to install Oculus Rift demo stations in 48 North American stores, a number that eventually ballooned to 500 locations leading into the holidays. But nearly half of them will soon be gone: Business Insider reported today that roughly 200 of those demo setups are being closed down because of "store performance."

An Oculus rep confirmed the closures, saying, "We're making some seasonal changes and prioritizing demos at hundreds of Best Buy locations in larger markets. You can still request Rift demos at hundreds of Best Buy stores in the US and Canada."
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But while there's no question that traffic drops off, often precipitously, immediately following the holidays, it doesn't sound like the headsets were moving very well during the holiday season, either. Multiple Best Buy employees said they were only selling, "at most," a few Oculus Rift devices per week; one claimed, "There’d be some days where I wouldn’t give a demo at all because people didn’t want to [try it]."

My guess is that this probably isn't as catastrophic a blow as it may sound—but it's surely not good news, either. The cost of setting up 200 Oculus Rift demo stations had to be significant, especially for just a few months of operation, and while seasonal dropoff is inevitable, it's also temporary. The existing Oculus demo setups that are already in place are basically a fixed expense, so why get rid of them so quickly if any sort of seasonal bounceback is expected? It's one thing to tweak your setup, but cutting it by 40 percent has the look of something a little more extreme.

Quote:Consider this lack against, say, the early days of 3D acceleration in PC gaming. Then, as now, adding a 3D accelerator to your system was a significant investment. The original 3dfx Voodoo card, which debuted in 1996 for $299, was worth $482 in 2018 dollars. It was by no means certain that gamers would spring for these solutions or that 3D-accelerated graphics would win out, or that one specific type of 3D acceleration would win out (betting on the wrong horse nearly killed Nvidia out of the gate). With that said, here’s a short list of games that launched in 1997 and 1998 — within roughly two years of the appearance of third-party hardware accelerated GPUs:

• Descent II
  
• GLQuake
  
• Half-Life
  
• Hexen II
  
• Quake II
  
• Star Wars Jedi Knight: Dark Forces II
  
• Tomb Raider
  
• Unreal
  
• Wing Commander Prophecy
  

Within a very short period of time, in other words, we saw 3D support being rolled out across the entire industry. Not every game on the short list above is a must-play title, but some of them are still excellent titles that hold up today. Unreal, in particular, was considered a stunning demonstration of how great games could look in its own era.

VR, two years later, has yet to launch a single equivalent hit. This undoubtedly reflects the greater difficulty of building games in which how the player moves and interacts with the wider world is so different, but it says something that not one major franchise holder is apparently willing to risk making even a demonstration title with a franchise logo on it. In 2015, EA included a VR level in Battlefront and Activision had one for Call of Duty: Infinite War. In 2017, as Ackerman notes, both sequels launched without any hint of VR support.

Quote:So what are we to make of all this? Right now, VR is still niche territory. The games that are shipping for VR are mostly smaller indie titles, with a few AAA exceptions. There are no must-have VR games right now, and there aren’t a ton of virtual reality games coming in the immediate future. And part of the problem is undoubtedly the slowing pace of PC evolution. Consider this: If VR had launched in 2004 and this were 2006, we’d be on our second new GPU architecture just since VR debuted. Back then, it was normal for GPU performance to nearly double every year. Instead, AMD and Nvidia have launched one new architecture each since VR deployed. This matters, because new architectures are how the GPU market principally drives performance to lower price points. There also needs to be better clarity regarding what kinds of VR experiences are practically supported on hardware, to avoid situations in which someone buys an Oculus Go thinking they’ll be getting something they can use for PC or console gaming. As the market grows (assuming it does), those kinds of confusions will become more commonplace.

If I’m being honest, I’m more pessimistic about VR’s success than HTC is. It’s not a lack of enjoying the medium, but the fact that we still have yet to see much in the way of killer apps. I think VR still has some time to solve that problem, but not too much of it. If VR hasn’t established itself as a player by 2019, the chances that Sony will continue the experiment with the PS5 seem slim — and if Sony and MS don’t support VR on next-generation consoles, the chances of it gathering much momentum seem that much steeper. VR and AR could still succeed in commercial markets, but so far we aren’t seeing the consumer impact we’d hoped to see more than two years after launch.

Quote:Unfortunately, it’s just not clear that Sony is immune to the downturn in VR sales that Digital Trends has been tracking. According to an article from July, Sony’s PSVR bundles haven’t exactly been selling well, either:

It’s the same decline that’s been spotted with the Rift and Vive and it could spell trouble for consumer adoption of virtual reality. You can argue that one reason the Rift and VR have both slowed down is that early adopters are waiting for hardware refreshes they can afford (the resolution targets on both first-gen sets leave a lot to be desired). Meanwhile, companies like Oculus have focused on less expensive alternatives like Oculus Go as opposed to pushing out new hardware versions of its flagship product. But given that Sony hasn’t exactly been betting the farm on VR in the first place, sharply slumping sales now could convince the company that virtual reality isn’t a technology with a meaningful feature. Instead of becoming a flagship option on the next generation of consoles, it could wind up nothing but a footnote to this one.

Hopefully, games like Beat Saber, a game so addictive it might as well be called “Lightsaber Crack,” a fresh round of GPU launches, and new headsets (theoretically arriving at some point) can collectively revitalize the market.

Quote:VR adoption, in other words, is moving at a glacial pace. 0.3% of the Steam market owns one (we can’t compare to historical records, even now that Steam’s database appears to be working properly again, but 0.3% ownership more than two years after launch is ugly). Frankly, it’s not hard to see why. I’ve never used a Vive, but the entire process of setting up a Rift from start to finish can take more than hour. Much depends on how much room you have to maneuver and for camera placements, but I wound up skipping most of the steps in Oculus’ setup program because it was nearly impossible to finish some of them properly. The system works fine, but getting the hardware properly configured was anything but turn-key — and that’s 2.5 years after launch. Virtual reality doesn’t just have a pricing problem — it has an entire initial user experience problem, and that’s not going to be easy to solve.

Microsoft has been playing footsy with the idea of VR for over half a decade. Rumors of headset work date back to 2012, and the company partnered with Oculus to put an Xbox 360 and wireless controller in the box of every Rift, with a partnership that allowed Rift owners to watch content via the Xbox app. The company has also worked to support Windows Mixed Reality headsets, (currently holding 0.04% market share on Steam, just for reference). But the complete failure of Windows Mixed Reality devices in market could explain some of the company’s non-response to VR on Xbox One — predictably, the headsets no one asked for have taken steep price cuts and still aren’t moving in any real volume.

The future of the feature may be summed up by Brian Blau, a Gartner analyst who used to work in the VR industry. “I haven’t seen the gamer community rally around VR like they have other things,” Blau told Cnet. Neither have we. Whether that’s due to costs, lack of exposure, or a fundamental lack of interest is ultimately less important than the fact that customers simply aren’t asking for this capability in enough numbers to move the needle.

Quote:Worldwide shipments of virtual reality (VR) headsets were down 33.7% year over year in the second quarter of 2018 (2Q18), according to the International Data Corporation (IDC) Worldwide Quarterly Augmented and Virtual Reality Headset Tracker. IDC expects this to be a temporary setback as the VR market finds its legs. The arrival of new products, such as the Oculus Go and HTC Vive Pro, and new brands, combined with the need for greater headset fidelity all point to a positive outlook for the quarters ahead.

Quote:More interesting and important than the "doubling" in VR headset attachment rate to Steam's user's is the fact that this only increased said attachment rate to around 0.8% of Steam's user base. Of these 0.8%, 0.37% of Steam users who took part in the December survey carry an Oculus Rift, with HTC Vive close behind at 0.33%. The overall increase in usage for each of these headsets was 85% and 65% throughout 2018, respectively - still definitely a far cry from the kind of market penetration that was expected of this latest generation of VR. As for Windows Mixed Reality products? They make-up 0.07% of the Steam survey's results.