At a time when some are starting to claim “VR is dead” once again, I think we need to take a bit of a step back. Things really aren’t looking that bad for VR right now and I find the future of VR to be pretty darn exciting. I asked others in the industry to help me explain why.

The Oculus Go, Steam VR release trends and the HTC Vive Focus

The Oculus Go, Steam VR platform trends we’ll mention soon and the HTC Vive Focus

Consumers aren’t “done with VR”

Articles like “VR is in a tailspin, and the sales numbers prove it” by Joshua Fruhlinger claim “consumers are done with VR”. Those are very strongly worded statements that aren’t accurate. The tailspin article prompted a response from the Vive team entitled “Think VR is dying? It’s just getting started”, which points out:

“VIVE has paced at its highest sales velocity of all time, for weeks on end, and we sold out. For a consumer electronic product in its third calendar year, this continued trajectory is nearly unheard of.” — Vive team

Just late last year, Pimax, an 8K VR headset, smashed through its Kickstarter goal, raising $4,236,618 (much more than the $200,000 goal!).

PlayStation VR is doing pretty well too with the mainstream audience, with the latest sales figures looking quite promising:

“Sony announced that it has sold 3 million PlayStation VR (PSVR) headsets as of the end of July, showing that its popularity has declined little since the fall 2016 launch. At the end of 2017, Sony had sold 2 million units, meaning it has sold another million in just the last eight months.” — Steve Dent, Engadget

That doesn’t sound like consumers are done with VR at all.

Things aren’t trending down

Joe Radak, VR Developer at Eerie Bear Games, has done a heap of analysis on Steam sales and offered to help clarify what the trends are that he has seen. He has a more realistic view around how things are tracking, he points out,

“The main thing to note is that at the start/launch of VR back in April of 2016, there was a lot of excitement and buzz around it. This led to a large growth of games on Steam (and other platforms), a ‘VR explosion’ if you will, and the rapid addition of VR based and VR supported games. Eventually though, as time goes on, this rapid growth is going to settle and plateau to a constant rate of VR game additions to Steam.”

That makes total sense, right? He continues,

“Should VR be dying, then we’d begin to see the number of games added to Steam decrease as developers lose interest at the lack of market interest — but we’ve not seen that.” — Joe Radak, VR Developer, Eerie Bear Games

“While there hasn’t been really super exciting growth like we saw in 2016, the amount of games added to Steam has been stable. We’ve seen a stable amount of games get launched on Steam for the past few months — as shown by the trendline [in the chart below]. There have been no signs that this value is going to decrease outside of the usual seasonal trends of game launches.”

VR tagged game launches on Steam as of 1st July 2018

VR tagged game launches on Steam as of 1st July 2018 (Source: Joe Radak)

Stable is good. Stable is promising. Stable isn’t a dying industry.

I’d add that game development takes time — especially in a relatively new industry with the rapid pace of change we’re seeing in VR. Developers out there are simultaneously learning and experimenting with a new medium (with entirely different rules, expectations and conventions) while also being expected to output high-quality content consistently and regularly. In my opinion, the fact that we’ve still got a relatively stable series of releases of VR apps in Steam is a pretty great sign considering that.

It’s not just Joe’s findings that are relatively positive. Kevin Carbotte, in an article entitled “IDC: VR, AR Headset Sales Are Down, But Don’t Panic” earlier this year, looked at an IDC study on VR/AR’s sales and had a more optimistic outlook:

“Despite the slow start to the year, IDC gives the future of the immersive headset market a positive outlook. The research firm expects that headset shipments should pick up later this year, and it expects growth to continue at a rapid rate for the next several years.” — Kevin Carbotte, Tom’s Hardware, June 2018

That Tom’s Hardware article has a pretty promising looking chart too from IDC’s report:

Worldwide AR/VR headset forecast from IDC 2018

Worldwide AR/VR headset forecast from IDC 2018

There are a whole heap of interesting stats and thoughts on the future of VR (and AR as well!) in their projections, it’s worth a read.

People with VR are spending more time in VR

Lucas Toohey, CEO & co-founder of Observer Analytics, thinks the typical way of looking at headset sales and revenue forecasts isn’t the best way to work out VR’s growth:

“When looking at VR’s growth people tend to lean on headset sales and revenue forecasts, which aren’t always the most telling metrics in the early days of a technology. Because usage and behavioural patterns are drastically different for VR, we believe the most telling metric for market growth is application stickiness.”

He continues, pointing out that current trends on their end appear to be looking pretty positive,

“We continue to see the average session length increase month-over-month and weekly retention metric improve. This behaviour shows that individuals with headsets are continuing to spend more time in the experiences they enjoy.”

“Headset sales and revenue aside, usage metrics are on the rise and the developers building VR content today are starting to learn what works.” — Lucas Toohey, CEO & co-founder of Observer Analytics

We’re finding what’s best for VR

Kain Tiezel, CEO and co-founder of StartVR, has been finding success in building VR applications for clients of all shapes and sizes. When I asked him about his thoughts on the state of VR, he pointed out that the style of VR work is shifting. This is a positive thing, in my opinion, as it shows VR is growing as a platform and finding what it is best at. Kain says,

“Coming off the back of another strong financial year in VR, we’ve been interrogating our projects and the results are very interesting. We’ve seen a noticeable decline in purely 360° video project work, which has been directly replaced with more interactive VR experiences. And where projects were once small and many, we’ve seen considerable growth in more substantial VR projects that leverage a wide range of media and production styles.”

We’re moving beyond solely 360° video —  a common method of producing VR content in the early days — into more exciting territory with interaction and a range of content styles. I think 360° video wasn’t ever the best way of showing off VR’s potential, so it’s great to see companies like StartVR looking for ways to move beyond it.

We’re still in a hype growth cycle

Our expectations have been crazy high for VR and AR (often due to overly-enthusiastic marketing departments hyping things a bit more than the tech can meet). Things have been wildly over-hyped to the point where some people really expect Ready Player One-level VR to be just around the corner.

When I asked Ben Wong, the co-founder & CEO of Academy Xi, what his thoughts were on the concept of VR being dead, he was quick to point out the hype growth cycle concept. He says,

VR is in a hype growth cycle, it’s inevitable that it will be a big part of our world, the main barrier from it becoming mainstream is the technological hardware in which it’s built with and the talent to build great content. When we see big leaps in improvement from any technology we get excited, our expectations rise and then everything normalises and we are surprised when we don’t see that same level of technological advancement.”

“One day in the future we will wake up, and realise that everyone is using VR and it will be the new normal, it’s just hard to say when that day will be.” — Ben Wong, Co-founder & Chief Executive Officer of Academy Xi

Gartner’s own prediction around emerging tech in 2017 places VR in the “slope of enlightenment” at the moment. This is where “more instances of how the technology can benefit the enterprise start to crystallize and become more widely understood. Second- and third-generation products appear from technology providers. More enterprises fund pilots; conservative companies remain cautious.” (Gartner).

Here’s where Gartner believes VR lies amongst the other emerging tech at the moment:

Gartner's Hype Cycle for Emerging Tech in 2017

Gartner’s Hype Cycle for Emerging Tech in 2017

I think we might still be a little bit further back than that, closer to the “Trough of Disillusionment”, but virtual reality will get to the “Plateau of Productivity” eventually — this is when it’ll hit mainstream. Gartner predicts 2-5 years, I think it’s really hard to know for sure. I do think it will hit mainstream potential in some form or another in this decade.

Technology X does not have to die so technology Y can thrive

One thing that frustrates me after covering emerging tech for years is that the tech media, pundits and bloggers are often incredibly keen to announce the death of a technology (or company). The death of wearables and/or smartwatches has been announced more times than I can count (Fitbit just had their most successful wearable to date) and other areas in emerging tech have had the same headlines over and over again.

We don’t need one bit of tech to die in order for another to succeed. VR doesn’t need to be replaced by AR. They can both survive and serve their own purposes! All of this tech can grow and rise together, finding ways to intertwine and push the others forward. Microsoft took what it learnt from their HoloLens and made VR headsets using the same tracking tech. There is every chance that advancements in VR tech will also help fuel AR too. Let’s work towards letting the whole emerging tech industry thrive and see where it takes us.

VR isn’t for everyone — it doesn’t need to be

On a similar note, not everyone wants to use VR. Some people just aren’t comfortable having their view completely obstructed. Some people feel uncomfortable in a headset like that. While that’s a sign that VR won’t become the sole and only way to use technology, it doesn’t mean it’s going to die as a technology. It just means it won’t be for everyone. That’s totally okay. We can have HoloLens/Meta/Magic Leap style AR for some who want to see the world around them at all times. A hybrid headset like the Mix AR headset that can switch between the two could be the way. I’m excited for the days when concepts like Leap Motion’s Mirrorworlds become a reality and we have VR and AR both working side by side in incredible ways!

We can even have technology like Bose’s audio-based AR for those who don’t want a display constantly in their face. We can even still have smartphones, tablets and desktop computers — people will naturally use what they’re most comfortable with.

Some people are going to want to be totally immersed in an experience. We’re going to have some amazing applications for that style of content consumption. It isn’t going to disappear.

The Oculus Go is helping lower the cost of VR

Kain from StartVR also mentions that headsets like the Oculus Go have already been quite successful as a way of delivering VR experiences for corporate clients. I’ve heard from a few sources that the Oculus Go, as a self-contained, all-in-one, mobile device, is proving to be very effective for delivering VR applications to corporates and those looking to distribute the content into controlled environments.

It is definitely much easier to manage than a range of Samsung Gear VRs! It sounds like StartVR is definitely on board and ramping up VR headset purchases now that headsets like the Oculus Go are available:

“We’ve probably purchased over 200 dedicated VR HMD solutions for clients over the past 2 months alone, which is roughly double the number we have purchased over the past 3 years of operation.” — Kain Tiezel, StartVR

Sonya Corcoran from the University of Sydney says they just deployed the Oculus Go for the first time in the classroom recently too. It’s definitely looking like the best option at the moment for larger scale VR uses where you’re buying a bunch of be used at once.

Ben Gilbert from Business Insider says in his review on the Oculus Go that,

“Oculus Go is the first of what I’m calling “Good Enough VR” headsets that find the middle ground between high end and smartphone-powered VR experiences.” — Ben Gilbert, Business Insider, May 2018

Standalone headsets are showing promise

The HTC Vive Focus, a standalone headset from HTC, also has shown promise — even when released solely in China. lvin Wang-Graylin, China Regional President of VR for HTC, posted this on WeChat on the day of release:

“Vive Focus wins standalone VR market share leader for 12/12 sales festival and gets a new 1 billion RMB [US$150 million] order!” — lvin Wang-Graylin, China Regional President of VR for HTC, 12th December 2017

That’s a lot of headsets purchased in one go! While it is likely to have been placed by the Chinese government or some other big corporate entity, the fact that they see the potential in this tech and want to use it in such big quantities is hopefully a great sign.

The HTC Vive Focus would be perfect for VR arcades, educational institutions and big corporate installations. It is exciting as it has inside-out, six-degrees-of-freedom tracking, which allows people to freely move around while wearing the headset.

Overall, lower priced, standalone headsets are currently doing pretty well in China — which is great to see!

Education is still taking on VR

On the topic of education, Sonya Corcoran also shared that students at Sydney University are tinkering with VR in a whole range of disciplines —

“We have students generating VR and AR as part of their degrees in Science, Medicine and Design, Engineering and IT. We even have Law and Business students dabbling with the technology.” — Sonya Corcoran, University of Sydney

There are very cool possibilities with education and VR — being able to completely immerse a student in an environment primed for teaching about a certain topic (especially things like history and science!) is going to be incredibly valuable.

“The technology is not going away and we’re still only scratching at the surface of its true potential. What we’re seeing is greater consumer knowledge and a significant adoption of the technology in Enterprise and Education markets. It is a good time to be doubling down on VR.” — Kain Tiezel, StartVR

There are a lot of businesses still active in the industry

Patricia Haueiss, author of the Australian Augmented Reality, Virtual and Mixed Reality Ecosystem Report 2018, sees a lot of potential in the Australian ecosystem:

“When looking at the Australian startup ecosystem, more startups, universities and institutions than ever are actively venturing in virtual reality. More than 100 Australian companies develop experiences, market them, showcase them in arcades, learn and play in VR. They are continuously exploring new use cases — transitioning from creating test gimmicks to value-generating experiences which require time and money to create, test and iterate. The simultaneous rapid advancement of hardware in the areas of wireless, low latency and high resolution is creating an ever growing set of real business opportunities.” — Patricia Haueiss

The entertainment industry is funding a lot of cool stuff

Andre Elijah, Founder/Director of OPIATS, an agency who has worked with a whole range of massive clients, has a positive outlook too. He sees funding happening for big VR experiences by the entertainment industry,

“Fundamentally, VR has captured the interests of many companies that are funding a lot of work, as well as consumers who are looking for new kinds of experiences. We now have mainstream VR tie-ins at entertainment complexes like The VOID with Star Wars and Ghostbusters, in movie theatres with IMAX VR, independent VR arcades, not to mention millions sold already to consumers by way of PSVR, Rift, Vive, and now the Oculus Go which sold 300,000 units with no marketing, and barely any retail presence besides Best Buy inside of six weeks.”

Andre currently sees funding ongoing for R&D, enthusiasts purchasing headsets and location based experiences bringing VR to the rest:

“Companies are paying for RnD and experiments to be built in VR, some are going all out creating training and marketing experiences (UPS, Lowes, Amazon, etc.) and that can’t be scoffed at. VR will take over. It’s the enthusiasts now driving headset sales, but since they already own them at home, the Location Based Entertainment experiences are making money off of the masses of casual people that are out there.”

It’s even hitting the Emmy Awards!

At this year’s 2018 Emmy Awards on September 17th, VR will have its biggest presence yet! “This year marks a record seven nominations for virtual reality content spread across two categories.” (VRScout, 2018) That’s a pretty good trend as companies like Disney, NASA, Marvel and more continue to experiment with virtual reality storytelling.

The technology to come is pretty exciting

We’ve got things like:

  • Eye tracking — just being able to tell if someone is looking at something will bring some really engaging experiences (characters will tell if you’re ready to interact with them!) along with the next exciting feature…
  • Foveated rendering — using eye tracking to allow VR headsets to render things outside of your attention in lower quality (helps achieve much more with less processing power!)
  • Even better inside-out tracking — No need for external sensors and such! With inside out tracking, the headset can work out where it is, what the surroundings look like and so on. This will help massively in reducing motion sickness as you can match up people’s movements in the physical space with those of the virtual world
  • Modular set ups — the HTC Vive is a great example of this! There are accessories like the TPCast wireless adapter which turns the Vive into a wireless headset, Vive Trackers to allow tracking of almost any object you attach it to, the Vive Deluxe Audio Strap providing an all-in-one head strap and audio solution, prescription lens inserts for those who wear glasses and more. These sorts of set ups are going to really help build up VR headsets’ functionality without requiring people to purchase entirely new headsets to keep up.

Conclusion

In conclusion, VR isn’t dying! It may take a little longer for it to hit the big mainstream audience, but headsets like the Oculus Go and PlayStation VR are helping build up this number. There’s so much potential still in this industry, it isn’t the doom and gloom that some are trying to make it out to be.

Have you got stories of success with VR? Any predictions for where you see it all going? Leave your thoughts in the comments below!

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