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Virtual Reality Check

Weekly Roundup: Now that the VR market is in the "gap of disappointment," how does it climb out again?

Earlier this week, we ran an interview with Iron Galaxy CEO Adam Boyes where he repeatedly expressed a faith in capitalism. Console manufacturers shouldn't curate their platform based on whether games meet a quality bar, he said, because capitalism will dictate what's worth people's money and what isn't. It's the same with half-step console upgrades; if the PS4 Pro and Project Scorpio don't sell, Sony and Microsoft won't try that approach again. As Boyes, put it, "capitalism will tell us how the story ends."

Interestingly, there was one area he wasn't quite so willing to leave the last word up to capitalism, and that was virtual reality. Boyes dismissed concerns about what happens to the VR market if the first wave of home headsets fails to sell well, so convinced is he by the "awe-inspiring" reactions of people being exposed to even today's VR tech for the first time.

We may find out whether the rest of the industry and (particularly its publicly traded companies) share Boyes' faith in VR's future regardless of its current commercial performance, as the PlayStation VR, HTC Vive, and Oculus Rift have not taken off as quickly as some had anticipated. SuperData this week downgraded its VR forecast for the year after the Black Friday sales holiday saw "notably fewer units sold than expected due to a relatively fragmented title line-up and modest marketing effort." For those not keeping track, this is the third time SuperData has downgraded its VR forecast this year. The company released its original $5.1 billion, 38.9 million headset projection in January, slashed it in March, and again in April before lowering the bar for the (hopefully) final time this week.

Some would say this was predictable. Like Unity CEO John Riccitiello, who in February warned that analysts were overestimating VR's potential in the short-term and underestimating it in the long term. In that same speech, Riccitiello also warned about the "gap of disappointment" and how the press would react to the first wave of VR falling short of analysts' expectations.

"As I see it, the good news as we near the end of 'The Year of VR' is that we really don't know anything about how VR will do long-term yet."

"In the very near term I am fearful of journalists. The reason I'm fearful of journalists is that they will not be able to resist talking about the gap of disappointment," he said. "Through this gap of disappointment, ignore the journalists and for those of you that talk to them explain this concept to them so at least they see this coming."

So here we are, as Riccitiello predicted, disappointed and talking about it. Part of that is on SuperData, whose frequent goalpost adjustments aren't doing much good for the image of either VR or itself. (And it's not like Riccitiello's warning was made in a vacuum; SuperData was aware of Riccitiello's comments when he made them, even citing his comments as one factor that played into their original downgrade of VR expectations.) But part of it is also on the headset makers and the negligible promotional pushes they gave this year.

Oculus won't even have a complete offering to pitch people until its Touch controllers launch next week (and parent company Facebook sees VR as an investment for 10 years down the line or later), Valve marketed Vive with all the vigor it devoted to Steam Machines, and Sony seemed torn between pushing PSVR or PS4 Pro, and in the end probably didn't give either expensive upgrade the campaign it deserved. Of course, it's easy to say "run a big ad campaign to get the word out about VR," but it's much harder to come up with ways to effectively communicate the VR experience through traditional means.

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But it's not just the sales and marketing side of VR running into problems. The challenges facing content creators are also plentiful. And while they may be more novel and creatively invigorating than the difficulty of creating a viable installed base for a new luxury gaming market, they are still hindering VR's potential. This week alone, Game Futures' Aki Järvinen bemoaned the wealth of VR games that simply seek to reproduce existing genres in a new format, arguing that VR needs to find its own voice if the form's potential is ever going to be realized. Meanwhile, Brandwidth's Dean Johnson was challenging people in the field to think beyond gaming entirely, saying the current approach to VR makes it an "expendable" technology, when it needs to be so essential that going without it would be like going without one's smartphone.

As I see it, the good news as we near the end of "The Year of VR" is that we really don't know anything about how VR will do long-term yet. Despite the launch of three very well-funded high-end headsets and a growing number of mobile offerings, we haven't had a huge mainstream push for the tech. There's been no large public referendum on whether this is something people need, want, or are willing to pay for. And right now, that suits me just fine, because I'm not convinced the price, the quality of the hardware, or the quality of the experiences are where they need to be for that referendum to have a happy outcome.

The bad news is that VR is not some sort of inevitable next step in tech completely immune to the forces of capitalism. The history of gaming is littered with interesting hardware that never really got the sort of promotion it deserved and was prematurely abandoned when it didn't catch on right away. There's the PlayStation Vita, PlayStation TV, the PlayStation 3D Display with SimulView, the PlayStation Wonderbook, the PlayStation Move (which oddly enough is getting a second chance at life with PSVR), and probably a few more that don't directly establish a pattern of Sony's sub-par commitment to hardware.

So here's to 2017, the New Year of VR. May the developers figure out how to make good VR, analysts figure out how to forecast it, the press figure out how to cover it, the platform holders figure out how to market it, and may the mainstream figure out why they might want it. Because if all that doesn't happen in 2017, I'm not sure how many of these groups will still be working towards it in 2018.

Other news on this week:

Digital game sales jump 14% to $6.7 billion in October - SuperData

Annapurna Pictures gets into game publishing

Square Enix reports 5m Final Fantasy XV sales in one day

Call of Duty comes out on top in difficult November for UK games retail

New games on Steam in 2016 rose 40% over last year

Pokémon Sun and Moon sales hit 1.5m in Europe

Rovio spin-off Hatch aims to be the Netflix of mobile games

ASA rules No Man's Sky advertising did not mislead consumers

Zynga sues two former employees over data theft

Peter Moore unconcerned about retail disappointments

Nintendo coming to US-based Universal theme parks

tinyBuild accuses N-Dream, iLogos of ripping off SpeedRunners

AIAS names Mike Fischer president

Sproing Interactive is restructuring

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Brendan Sinclair avatar
Brendan Sinclair: Brendan joined in 2012. Based in Toronto, Ontario, he was previously senior news editor at GameSpot.
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