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"From a publishing point of view, VR is just too risky"

A BIG Business Forum panel exposed a reluctance among smaller publishers to commit resources to supporting VR

Small and medium publishers may be two or more years away from supporting dedicated VR games, shifting yet more emphasis onto platform-holders like Valve and Oculus to continue funding content development.

Speaking as part of a panel at the BIG Business Forum in Sao Paulo, Brazil, Versus Evil general manager Steve Escalante dismissed a concern from a member of the audience that the emergence of VR technology would take publisher support away from traditional games. According to Escalante, Versus Evil has no designs on the VR market in the near future.

"How many units have been sold for VR today?" Escalante asked. "The market is very small, so from my perspective as a newcomer I'm not even looking at VR today.

"The market is very small, so from my perspective as a newcomer I'm not even looking at VR today"

Versus Evil

"I know that it could be big, and there's a lot of development dollars. From a development perspective I'd invite you to chase those dollars, because there are a lot of them out there. But from a publishing point of view, VR is just too risky. We have to go after the platforms that have an audience, so we know what they look like.

"We're willing to wait for the market to mature, but it is just too small today."

The panel was intended to offer Brazilian developers advice on what the kind of publishers now scouting the country's burgeoning development scene - mostly small and mid-sized outfits like Versus Evil - are looking for in a partner. Francis Ingrand, CEO and founder of the French publisher Plug In Digital, shared Escalante's views, but went further still.

"At the moment it's a very risky, very niche market," he said. "We don't invest any money in pure VR projects. We have some projects with a VR option, but we don't care about [pure] VR now and we'll wait two years or more before we invest in those projects. It's not the right moment to do that for a small or medium sized publisher."

And that hesitancy is also found among larger publishers, too. Yesterday, published an interview with Square Enix CEO Yosuke Matusda, in which he described the industry as being in a "wait and see mode" in terms of when and how much to invest.

Along with Capcom, Bethesda and Warner Bros. Interactive, Square Enix was one of several big companies to roll out a VR experience at this year's E3, mostly based on popular IP like Resident Evil, Batman and Final Fantasy. However, even the briefest Google search reveals a generally tepid and occasionally negative response to those experiences, raising legitimate questions over just how serious the industry's entrenched players are in supprting VR at this early stage.

In the absence of the bigger publishers, one might expect more specialist companies to seize the opportunity. However, the position taken by Versus Evil and Plug In Digital suggests that many of those companies remain sceptical of the market's potential to grow enough within the next two years - fuelled, perhaps, by the waning enthusiasm of analysts like SuperData, which has cut more than $2 billion from the $5.1 billion in revenue it projected for VR hardware and software sales in 2016.

"We don't care about [pure] VR now and we'll wait two years or more before we invest in those projects"

Plug In Digital

Back in April, against a backdrop of VR developers cutting the prices of their games, our own Rob Fahey asked the question: "How will developers make money from VR?" Since then, a debate over the role that exclusive games should play in the early market has exposed the degree to which Oculus and Valve are funding the creation of new content, offering "no strings attached" grants to ensure that developers can supply a market the size of which remains a mystery.

Speaking to at E3, Oculus VR's head of content Jason Rubin acknowledged that it is, "[throwing] more money into the ecosystem than is justified by the consumer base," on the grounds that it can't expect developers to take that risk, and in the belief that doing so will help the Rift's installed base to grow more quickly. "We have put huge amounts of money into the ecosystem," he said. "More than any of our competitors."

Will the existence of games like Superhot VR and Giant Cop - both of which received large enough amounts of money for Oculus to ask for timed exclusivity - genuinely lead to more sales of the $600 Rift, and its yet to be priced Touch controllers? Is a drop in the upfront cost a more important factor in the growth of the VR audience? Right now, it's only possible to speculate on such matters, but it's clear that Versus Evil, Plug In Digital and, one can reasonably assume, other publishers like them see no immediate chance of significant improvement.

Fortunately, Oculus and Valve have deep pockets. It may be a while before the VR market can survive without them. is a media partner for the BIG Business Forum. Our travel and accommodation costs were provided by the organiser.

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Matthew Handrahan avatar
Matthew Handrahan: Matthew Handrahan joined GamesIndustry in 2011, bringing long-form feature-writing experience to the team as well as a deep understanding of the video game development business. He previously spent more than five years at award-winning magazine gamesTM.
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