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VR devs react to CCP exit: "VR is not dead"

Studios still optimistic about VR's future, saying headlines about its death are simply "scandalous"

Icelandic developer CCP Games surprised us all this week with the announcement that it would be winding down its VR operations. The company's Atlanta location will be shuttered while its Newcastle studio is up for sale - all told, about 100 jobs are affected and it clearly doesn't send a great signal to those waiting for the VR business to take off. CCP, after all, has been one of the VR leaders from the very start, with Oculus using EVE Valkyrie as a showcase for what its Rift headset could do even before a consumer version had been finalized.

So if CCP is jumping ship, what does that say about VR's prospects? And should other developers working in VR, especially those who are 100% committed to the space over traditional gaming, be ringing the alarm bells? The situation isn't as dire in VR as CCP's situation might suggest, say the developers we chatted with.

Proclamations that "VR is dead" are nothing more than "scandalous headlines," says Denny Unger, CEO of Cloudhead Games, whose studio is responsible for the critically acclaimed The Gallery franchise.

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CCP will cease VR development but still support EVE Valkyrie

"[Saying VR's dead] really calls out a lack of understanding about what's really going on," Unger comments. "In some ways this narrative is being prompted by an impatient investment community latching onto AR as 'The next BIG thing', a cool but wholly incomparable medium. On the other end of the spectrum, you have AAA software companies with inflated expectations on return contrasted by lower-end shovelware muddying the gears of quality.

"CCP's decision to take a break from VR likely had more to do with over-estimated short-term expectations and challenges in production scope/scale this early in the cycle"

Denny Unger, Cloudhead Games

"And finally, you have a fragmented market of VR devices, with wildly different quality standards/features and price points, and few opportunities for the public (or developers) to try the devices. The net effect of all of this is a seriously confused general public, resource strapped developers looking for stability and a foggy future outlook."

He adds, "CCP's decision to take a break from VR likely had more to do with over-estimated short-term expectations and challenges in production scope/scale this early in the cycle. Stakeholders in larger companies are much less likely to have the patience and understanding of VR's slow boil to widespread adoption. VR development in 2017 is an investment in the future and an early chance to plant your flag before the scales of widespread adoption tip.

"Finding 'success' in VR right now requires that project scope and team sizes are kept within a nimble and realistic realm. If you're in it for the money in 2017, you're doing it for the wrong reasons. Our job as content creators during VR's sensitive reboot is to drive adoption, to sell the dream, to introduce the public to the next big medium. The spoils of war come later."

Richard Stitselaar, Studio Director at Vertigo Games (makers of Arizona Sunshine), agrees with Unger. He's not surprised that a larger company with a headcount in the hundreds might need to look elsewhere.

"VR is not dead - it's simply suffering from growing pains," he says. "It is our belief that VR gaming thrives when games are created for it exclusively and from the ground up. So when a leading dev like CCP is in the position to invest in the development of a VR product or a non-VR product, it's not hard to look at the respective install bases, do the math and figure out why they might decide to leave the VR space.

"Vertigo Games and other studios have found their niche in VR. For us, this has meant a solid return on investment with both of our VR-exclusives, Arizona Sunshine and Skyworld. We won't be leaving the VR space anytime soon."

"I did not react to it from the standpoint that there is a titanic shift occurring away from VR anymore so that I worry that there's a titanic shift in the games business when a single developer or publisher closes a project or studio"

Steve Goldstein, Turtle Rock

Steve Goldstein, president at Turtle Rock Studios, which devotes a portion of its workforce to VR, says that we're all reading too much into CCP's exit. One studio's decision should be taken as just that.

"I think that any studio or publisher decision to pivot is usually an individual story as opposed to a bellwether of the industry as a whole," he remarks. "The people who are yelling that 'VR is dead' are the same people who are also yelling that 'single player is dead' because EA is changing direction on the Visceral Star Wars title. So apparently according to these folks, single player is dead in the same year that Breath of the Wild came out. Ok...

"In short, I didn't greet the announcement by CCP as good news, because it means that a developer is laying people off and people in our industry are losing their jobs. Nobody wants that. But I did not react to it from the standpoint that there is a titanic shift occurring away from VR anymore so that I worry that there's a titanic shift in the games business when a single developer or publisher closes a project or studio."

Ultimately, despite slower adoption than many would like, VR developers remain optimistic about the future, and CCP's decision to press the pause button doesn't change that.

"We support all content creators in the space, especially those like CCP who have been essential to broadening the appeal of VR," says Ben Kim, Chief Financial Officer at Survios, which developed the top-selling Raw Data. "We know that existing VR audiences seek high quality, premium content experiences, and we see great opportunities for diversifying business across retail and arcade environments to reach more people and bring premium VR to even wider audiences."

When asked for comment, an Insomniac Games spokesperson tells us, "We're dismayed any time we see layoffs and studio closures in our industry. We're still excited by the long-term potential of VR/AR, and will continue to support our own VR games like The Unspoken while looking ahead to the future. We're further encouraged by the recently revealed projects at Oculus Connect 4 and at Sony's Paris Games Week press conference."

"We're seeing the VR install base continue to grow, and are fairly bullish about the market this Christmas with the Rift and Vive price drops bringing them to a much more affordable level"

Patrick O'Luanaigh, nDreams

Some developers are obviously more confident than others. UK's nDreams (The Assembly, Bloody Zombies), for example, says it's on track to double its revenues this year, so you certainly can't blame the studio for its optimism.

"We're seeing the VR install base continue to grow, and are fairly bullish about the market this Christmas with the Rift and Vive price drops bringing them to a much more affordable level, and the updated headset, big games and marketing push that we see coming to PlayStation VR," nDreams founder Patrick O'Luanaigh states.

"As with most new technologies, there is no doubt that it is going to take a while for VR to reach mass-market (and I personally think VR and AR will have converged into a single device by that point). For nDreams, between now and then, we're being sensible with our development budgets, are continuing to build partnerships/co-funded opportunities, and are exploring areas like VR arcades and other VR entertainment."

He adds, "We remain firm believers in VR, and 100% committed... We've sold a lot of units and we're determined to be a leading player when the VR/AR market reaches mass-market, and given the billions of dollars being invested into VR and AR by all the big technology giants, we remain convinced that it will."

Cloudhead's Unger is highly encouraged by the success his company has had as well. "Cloudhead Games has a focus on high-end VR (Vive, Oculus, PSVR) which in a little over a year and [a half] has made frankly astounding strides in that short time," he says.

"From everything we understand about the market, the general public is still in for a number of key surprises. VR isn't going anywhere and with hundreds of companies developing hardware for the market and thousands of software developers jumping in, the industry is just building up steam. Competition will drive down costs and standards/winners will finally emerge. We're not worried but can certainly understand why there's confusion out there."

GamesIndustry.biz did request an interview with CCP, but we were directed to the previously released statement on the company's restructuring. Earlier in the year CCP boss Hilmar Pťtursson indicated that his company's VR projects at the time were about break-even. We also followed up with Oculus after our Jason Rubin interview to ask for comment on CCP, but did not receive a response.

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Latest comments (13)

its early days...still early days like the wild west frontier of VR, and not quite mainstream in the consciousness of public and gamers. And frankly, the global economy - sucks, in terms of having affordable home entertainment.

Nevertheless, VR has some potential good breeding down in previz and creative arts and tools, in applied medico-biological and physics aerospace simulations and in development for film/animation

From such, perhaps a built from ground up VR that is not a port, can truly be immersive, coupled with usable haptics - that one day, becomes truly mainstream and affordable for all, young and old
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Christopher Dring Publisher, GamesIndustry.biz17 days ago
What's happened at CCP unfortunately fits the media narrative - that VR was going to change the world, and then it didn't. Inflated expectations didn't just come from investors and publishers, but everywhere.

One notable VR expert always said that 2017 will be the hard year for VR. I suspect 2018 might be similar.
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Dariusz G. Jagielski Game Developer 17 days ago
Maybe it's not dead, but it's not very much alive either.

I feel that VR won't get mainstream until we can develop Matrix-style VR (which in theory is possible, just the tech isn't there yet), because as it stands now, you can't be very mobile in VR - either you start knocking over stuff (Cardboard/GearVR) or can't move because of all the cables (PSVR and PC headsets). So the gameplay possibilities are quite limited, either to stationary experiences or with that teleport mechanic, which can be immersion breaking depending on the game.

Don't get me wrong, what developers achieved with VR is pretty damn amazing, but it still isn't enough to get most of gamers on board.
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Mac Lead Developer & Designer, Borrowed Light Studios17 days ago
@Dariusz G. Jagielski: as cool as far future "matrix" tech is, it's definitely not a requirement for captivating immersive experiences. The capabilities of just the current VR tech on the market - lowish res headsets, 6 degrees of freedom controls, basic controller haptics - is already enough to fully engage the player to a level other game technologies have only dreamed. Not to beat a dead horse, but VR games have to be designed from the ground up for the medium. There's more to explore in games than running around at breakneck speeds while simultaneously shooting.
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Richard Browne Partner & Head of Interactive, Many Rivers Productions17 days ago
It's all a bit like the scene from the Holy Grail isn't it. . . "bring out your dead!" VR isn't dead yet, and it won't die - it's going to be location based. Beyond the infinite hassle of setting up a home VR system, the cable attachment problem, the frame rate/nausea problem, VR's biggest issue in the home is its an unsafe space. I never feel comfortable with a headset on for more than ten to fifteen minutes, I can't bare being cut off from the World for any greater length of time than that. And that's not to mention the numerous heart attacks I've had when my children have come to find me working in this other World and tapped me on the shoulder. Short brief experiences in locations where you have specifically gone for that purpose should remain extremely popular, especially for branded content. At home? Nah. And to Macs point, yeah, it needs to be truly immersive. Empty Worlds don't entice at all, I want character interaction and interaction ..if it's not a cockpit game.

Edited 2 times. Last edit by Richard Browne on 3rd November 2017 2:13pm

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Mac Lead Developer & Designer, Borrowed Light Studios17 days ago
@Richard Browne: I agree immersion is the goal with VR, but what does truly immersive mean? In my experience, I can be truly immersed in any number of mediums without requiring full brain-computer interfaces such as the sci-fi Matrix concept.
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Jeff Kleist Writer, Marketing, Licensing 16 days ago
The great part is that unlike a lot of gaming gear and experiences, VR is portable and flexible. It wonít die, itíll just refocus

You want to see the killer app for VR? Itís Chat rooms full of rude gestures and actions. Iíll never forget in college I had to wait to use the T1 line becUse a bunch of idiots were typing dirty things to each other on IRC and it was first come first serve
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VR was dead on arrival just like it was in the previous cycle. VCís, who apparently have no understanding of the market, were throwing money on doomed projects in the hope the horse they were betting on would be the one to make it big. But it was apparent that nobody would be getting any success.
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Ruben Monteiro Engineer 15 days ago
@Mac: Hey man, nice to see you here :)

I think what's missing in VR is just higher resolution and refresh rates. Even for a non photorealistic world, the blurriness of the current gen just doesn't work for me.
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Jeff Kleist Writer, Marketing, Licensing 15 days ago
@Kim Soares: Hardly. Itís just that throwing money at AAA games unless itís to promote your platform made no sense, as youíll never see the return.

The cost of entry is as low as free if youíre getting a new Samsung phone. $199 for Oculus could be HUGE as most people dig VR for social and experiencing environments. Seriously, hand out 500 cameras to top youtubers, require them to shoot in VR regularly and watch.
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Richard Browne Partner & Head of Interactive, Many Rivers Productions14 days ago
@Mac: For VR immersion I mean actually engaging me in the World and the conversation of that World, especially through character. So much VR is just empty spaces simply because character and character reaction and interaction is so expensive relatively speaking.
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Richard Browne Partner & Head of Interactive, Many Rivers Productions14 days ago
@Mac: For VR immersion I mean actually engaging me in the World and the conversation of that World, especially through character. So much VR is just empty spaces simply because character and character reaction and interaction is so expensive relatively speaking.
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Mac Lead Developer & Designer, Borrowed Light Studios14 days ago
@Ruben Monteiro: Hey Ruben! Totally agree about resolution, although I think 90fps is pretty solid. If hardware manufactures can bump up the resolution and cut the cords, both of which are likely if you follow the trends, then I think it will reach more people.

Also, VR needs standards for devs to really feel comfortable investing more. OpenXR is looking promising, but right now development is a fairly fragmented process.
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