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
Some dipshit somewhere pulls a number out of their ass, which is exactly what the (Dr. Evil voice:) billion dollar headline is, and VR is considered a failure? So, zero chance the person who pulled that number out their ass might have simply been an idiot?
The range on the predictions for iPhone unit sales across a 1 year period varies to the magnitude of tens of millions, and thats on a product thats been selling for nearly a decade now, and yet some are giving credence to someone predicting on a completely unknown market! Its just analysts pulling numbers out their ass.
It wasnt so long ago you would have been laughed at for saying every home will have a PC, or the internet was going to take off, or that said internet was going to be accessible from tiny devices that even self professed technophobes would come to not want to part with for a day, or cars would become autonomous.
I never thought VR was going to explode onto the scene. Seemed like common sense, I mean, how many can afford it? Have the space for it? Have a PC that can run it? Would be happy to sit through the early adopters phase of little compelling content? It is a small market, for now. But every aspect that is wanting is being improved upon. You must be either closed minded or officially over-the-hill if the thought of a light weight visor that could completely replace your desktop monitor is either impossible or unlikely. The only question is, how long til it gets here. And if you think Ive watched 1 too many sci-fi movies, read the previous paragraph again (or for the first time if you are a tl;dr skimmer).
I am a TrackIR user fo I'd say a decade now and ED is the best use of it ever so the VR aspect definitely has my eye(literally). My stance on VR is if it makes it too 2nd gen it will move up my list of gadgets.
The only way VR will be successful is when the Devs change their mind about what the applications of this technology has to be. New apps have to be written that follow the real potential of this technology. In the areas of medicine, construction, design etc yes! In any way connected to games it will always be a very niche market it can fill and I think will not be worth it to buy, unless it becomes dirt cheap somehow over night (it will not).
High cost is not necessarily something that stops people from paying for a product. There are lots of high cost tech products that sell really well, with the Iphone as a prime example. With VR, the actual premium devices in the market have proven to sell really, really badly, which is the exact opposite movement. The fact is, people don't see the high cost justified in actual advantages or features.
I also strongly doubt VR will be able to take off with just the 'simulator' type of games like ED and racing stuff. We already have a 'simulator' niche in the PC market that has been super stagnant for decades.
We are also still missing the 'killer app' for VR. The overall view is that VR represents problems without real solutions only to achieve a better form of immersion. But immersion can also just come from 'getting into' a piece of content; if you really dig the content, you get immersed by nature.
Look at 4k TVs: totally useless at home, barely any content available (things are picking up albeit slowly), but since manufacturers managed to lower the cost enough, people still buy them. At this point VR/AR is little more than a curiosity.
TV technology was developed in the early 1920's and has been in household since 1940's. 4K is simply a natural progression of the same phenomena which has a virtually (no pun intended) assured future (with the exception of some unforeseen disaster or fundamentally different technology that leapfrogs it).
VR doesn't have the same foundation or quasi assured future regardless of cost.
Of the many people that eventually buy a 4K TV how many of them actually care if it has 3D support (active or passive)? Probably very few. 3D support is likely dropping off in favor of other features like a better quality panel with hight contrast and HDR.
My point is VR could just as easy be that 3D feature that people care less and less about.
More people might buy a Vive, Rift or PSVR if the price were to collectively drop but that doesn't mean that interest in VR won't be short lived.
kotaku.com/dayz-creator-on-vr-development-there-is-no-money-in-it-1789827173