Why VR won't be a billion dollar industry this year.
This is a pretty boring one to debunk.
There are a MONSTROUS number of reasons why I seriously doubt that this will be a billion dollar year for VR. But I'll stick to the big ones; classifying VR sales, hardware requirements, market size and cost.
Firstly, I wanted to start with classifying VR sales because if we don't curb the BS now, the claims in the future will get silly. VR sales = sales of dedicated VR hardware. Smartphones you can ram into a headset or piece of cardboard don't count. Though, I will permit the inclusion of the hardware to mount the smartphones. Reason is simple, a large number of high end iOS and Android phones already have such solutions, The article would be moot if we allowed those to be included because I'm sure the sales volume of smartphones which *could* be used as 3D hardware already surpassed a billion last year.
Oh, and I'm certain that as these predictions from analysts fall flat on their face, this is exactly how they will defend them. I'll guarantee most of the people are more qualified than me on paper to make these predictions, but some times the predictions just fall short of reality.
Moving on to the other 3 reasons all at once. Since I allowed the head mounted holders for phones to be included we have 3 primary markets in VR. Cheap head mounted units for phone. A moderately priced, console specific device from Sony and an expensive solution in the form of the Oculus rift.
Lets face it, the phone solutions are cheap and silly. They are super niche and at their price point would require ludicrous sales to contribute meaningfully to a billion dollar annual revenue stream.
Sony's solution might seem like the perfect balance of cost and functionality. Not to mention it targets to the most viable audience. But it has a unique problem. Being tied to the PS4. Gamers aren't a huge fan of games that require additional accessories.
Not to mention the lack of games built to actually make use of it. It's like trying to sell a Kinect when there is nothing you want to play that actually requires you to use it. It doesn't matter that it might enhance some games. If there isn't a decent sized catalogue of games that require it, there will be next to no demand. And, it isn't as easy and open as a PC to build games for the PS4, so it is even worse as a platform for an emerging technology.
So, while the price point on Sony's may be bigger than the phone solutions, demand will be even lower than phones making it just as useless in pushing the needle.
Which brings us to the Rift. This is the best chance the market has. But it also has several staggeringly large problems. It requires massive computing power. In fact, one site estimated it as less than 6% of all PCs are powerful enough to run VR games. And that number is probably optimistic to begin with. If that 6% is just to hit the bare minimum specs, the number of computers that would be able to handle it well enough to deliver an enjoyable experience would be even lower. Then you need to cut that down to the subset of users with those PCs that is actually interested. And then cut that sub set down to those who can justify/afford the cost.
PCs have the advantage in terms of developer power behind games. But that is it.
At the end of the day, we are already into 2016 and VR is still a non-existent market. This MIGHT be the year it gets some decent roots, but that isn't going to drive a billion dollar industry. If we can get to a point by the end of this year where there are multiple VR titles that are widely accepted as good finished products that make true use of the hardware and some of those good titles are being ported across VR devices then we might see 2017 as the year we start seeing a second wave of early adopters large enough to push it to $1B.
In fact, an extra point I would make is that I'm not even sure the manufacturing pipeline for VR equipment is big enough today to make a $1B industry possible. It is new tech, so assembly will be slower than for more traditional electronics and tech will be more expensive to produce and harder to acquire. Even at $600 for Rift, we're talking over 1.5 million units of a very niche, brand new tech.
I've been wrong in the past, but usually only about specific devices (and even then, usually only Apple whose products [and fans] defy reason). On whole device categories, I generally have a pretty good feel.
There are a MONSTROUS number of reasons why I seriously doubt that this will be a billion dollar year for VR. But I'll stick to the big ones; classifying VR sales, hardware requirements, market size and cost.
Firstly, I wanted to start with classifying VR sales because if we don't curb the BS now, the claims in the future will get silly. VR sales = sales of dedicated VR hardware. Smartphones you can ram into a headset or piece of cardboard don't count. Though, I will permit the inclusion of the hardware to mount the smartphones. Reason is simple, a large number of high end iOS and Android phones already have such solutions, The article would be moot if we allowed those to be included because I'm sure the sales volume of smartphones which *could* be used as 3D hardware already surpassed a billion last year.
Oh, and I'm certain that as these predictions from analysts fall flat on their face, this is exactly how they will defend them. I'll guarantee most of the people are more qualified than me on paper to make these predictions, but some times the predictions just fall short of reality.
Moving on to the other 3 reasons all at once. Since I allowed the head mounted holders for phones to be included we have 3 primary markets in VR. Cheap head mounted units for phone. A moderately priced, console specific device from Sony and an expensive solution in the form of the Oculus rift.
Lets face it, the phone solutions are cheap and silly. They are super niche and at their price point would require ludicrous sales to contribute meaningfully to a billion dollar annual revenue stream.
Sony's solution might seem like the perfect balance of cost and functionality. Not to mention it targets to the most viable audience. But it has a unique problem. Being tied to the PS4. Gamers aren't a huge fan of games that require additional accessories.
Not to mention the lack of games built to actually make use of it. It's like trying to sell a Kinect when there is nothing you want to play that actually requires you to use it. It doesn't matter that it might enhance some games. If there isn't a decent sized catalogue of games that require it, there will be next to no demand. And, it isn't as easy and open as a PC to build games for the PS4, so it is even worse as a platform for an emerging technology.
So, while the price point on Sony's may be bigger than the phone solutions, demand will be even lower than phones making it just as useless in pushing the needle.
Which brings us to the Rift. This is the best chance the market has. But it also has several staggeringly large problems. It requires massive computing power. In fact, one site estimated it as less than 6% of all PCs are powerful enough to run VR games. And that number is probably optimistic to begin with. If that 6% is just to hit the bare minimum specs, the number of computers that would be able to handle it well enough to deliver an enjoyable experience would be even lower. Then you need to cut that down to the subset of users with those PCs that is actually interested. And then cut that sub set down to those who can justify/afford the cost.
PCs have the advantage in terms of developer power behind games. But that is it.
At the end of the day, we are already into 2016 and VR is still a non-existent market. This MIGHT be the year it gets some decent roots, but that isn't going to drive a billion dollar industry. If we can get to a point by the end of this year where there are multiple VR titles that are widely accepted as good finished products that make true use of the hardware and some of those good titles are being ported across VR devices then we might see 2017 as the year we start seeing a second wave of early adopters large enough to push it to $1B.
In fact, an extra point I would make is that I'm not even sure the manufacturing pipeline for VR equipment is big enough today to make a $1B industry possible. It is new tech, so assembly will be slower than for more traditional electronics and tech will be more expensive to produce and harder to acquire. Even at $600 for Rift, we're talking over 1.5 million units of a very niche, brand new tech.
I've been wrong in the past, but usually only about specific devices (and even then, usually only Apple whose products [and fans] defy reason). On whole device categories, I generally have a pretty good feel.
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