To say VR had an eventful first year would be an understatement. Not only do we have three major headsets on shelves, contributing to almost $1bn (£774m) worth of sales around the world, but we also have virtual reality films appearing at Sundance, VR surgical procedures, and HTC has even got its sights set on launching the world’s first virtual reality satellite later this year as part of its $10m (£7.7m) VR for Impact program.
Yet, while the excitement around VR has been positively infectious, a recent report from market research firm SuperData suggests that consumers have been somewhat slower to buy into this new technological frontier. According to the data, Oculus shipped 250,000 Rift units in 2016, HTC shipped 420,000 Vive units, and Sony 750,000 PlayStation VR units.
It’s hard to find an appropriate yardstick for VR sales, but with PS4 pushing 60m units worldwide, it’s certainly a very small subset of PlayStation gamers. Sales have admittedly been constrained by supply issues across all three headsets at varying times, but that’s little comfort for content creators.
So VR hasn’t been quite the commercial smash hit some were hoping. There’s still much to prove, but it’s early days and the potential is immense.
Speaking to the teams behind the Vive, Rift and PS VR, it’s clear the first year of virtual reality has been a steep learning curve for everyone. Despite this, though, all three are optimistic about the future of VR, and are well aware of the hurdles they need to overcome to propel the industry forward.
“We were really excited when we launched Vive a year ago, but were positively surprised at just how well it was received,” HTC’s EMEA virtual reality program manager Graham Breen (pictured left) tells MCV.
“Since then we’ve started to sell through a lot more partners and seen the world of VR grow. We’ve also seen the growth in content outside of gaming as businesses have used it to solve real problems in industries such as healthcare, education, design and entertainment.
„We’ve learnt a lot during the first year, it’s been a learning curve, and we’ve been discovering new ways of everything, from creating content to giving people the chance to try Vive.”
Oculus’ VP of content Jason Rubin (pictured below) echoes Breen’s comments, saying it’s been “a strong first year” for the Rift despite a few teething problems.
“VR is just getting started,” he enthuses. “A year after launch and the Oculus store has over 400 Rift titles, more than 100 of which are compatible with Touch. That’s a huge growth of quality content in an extremely short amount of time.
“We understand that there are areas where we could have done better. Our early shipping issues were a clear miss, for example. But it’s important to remember that we are a four-year-old company, with hardware and software on the market for only about a year.
„We’ve learned from our mistakes, and fixed the problems. It’s also important to realise our wins and generosity. No hardware manufacturer in my memory has given away as much software for free as Oculus has in its first year.”
Of course, PlayStation VR has had less time on the market than its PC-powered rivals, but Sony’s immersive technology group director Simon Benson (pictured below) is still very pleased with how the headset has been received so far.
“[It’s been] very positive,” he says. “We were very optimistic about introducing our gamers to virtual reality, but it’s only when you launch it that you know for sure.
„Creating a completely new type of gaming experience that involves wearing something on your head was a real challenge. When we see such fantastic user reviews, we know we have done a pretty good job in getting the important elements just right.
“It is still very early days, but we have a better feel for the demand for VR gaming and so we are planning to increase production. This is a really positive sign for the future of VR gaming and I’m looking forward to seeing even more people getting their hands on their own PlayStation VR headset and entering this new world.”
Convincing early adopters is one thing, but the cost of today’s headsets still remains one of the biggest barriers to entry, something that Rubin’s team at Oculus have been all too aware of ever since launch day.
“I’ve always said there are two things we need to push VR forward: great content and lower prices,” he explains. “With regards to price, we always knew we’d have to take a serious look at the price of our hardware by the end of the first year.
“We’ve given hundreds of thousands of demos in retail stores and after every demo we give a survey. We overwhelmingly hear responses along the lines of ‘That was great, I loved it,’ but people who don’t buy Rift after a demo are held up by price. It’s as simple as that.
“So we did something about the price. That’s been huge for the Rift. By dropping the price of Rift and Touch, we’re aggressively pushing VR forward: more people will get into VR with lower prices and have more money to spend on the great VR content available, and that helps the entire ecosystem grow.
“The Oculus Ready program [for PCs] has also made getting a VR-capable PC easier and more affordable than ever before, so the new all-in price for the best VR experience available is now within striking distance of PS VR. Combined with great VR content to keep consumers coming back and making sure they have amazing things to show their friends is the other piece to driving adoption. In the long run, we believe that the PC ecosystem will have the most interesting, compelling content and the most experimental and interesting hardware. If you love high-end VR, the PC is the place to be.”
At £499 (plus another £99 for a pair of Touch controllers), the Rift still has some way to go before it’s a direct competitor to Sony’s £349 PlayStation VR, but with Vive still priced at £759, it’s now a much more attractive bundle for those seeking an immersive VR experience without the hassle of setting up a dedicated space. Breen, however, is unperturbed:
“We don’t plan on changing our strategy of delivering the best and most comprehensive VR product to both developers and consumers,” he states. “Vive stands for the best in class VR experience and we firmly believe that it represents excellent value.”
Likewise, Benson believes PS VR’s plug-in-and-play approach is still one of its major selling points despite the shrinking price gap.
“[PS VR] is designed to be accessible to as wide an audience as possible,” he says. “The price point is just one small factor of that objective. You also have to consider other points, such as the availability of the platform to connect the VR headset to – in our case, the PlayStation 4 is ideal as it is a fraction of the cost of a VR-ready PC and requires no configuration or expertise to guarantee a high quality VR experience. Also, there are over 50m PS4s in the world – all fully capable of running VR content.“
Having weathered multiple console launches over the years, the importance of a healthy content library is something Sony knows all too well. Vive and Oculus might have thrown in a handful of free games to help sweeten their respective launch prices, but PS VR’s Day One line-up was in a different class altogether, with the likes of Rez Infinite, Battlezone, RIGS: Mechanised Combat League, Batman: Arkham VR and PlayStation VR Worlds all launching to great critical success alongside established multiplatform VR favourites such as Job Simulator and Eve: Valkyrie.
It left Vive and Oculus’ offerings looking a little underwhelming by comparison, with few must-have titles in the bag even months after launch. Rubin, however, is determined to turn this around for Oculus:
“When big screen TVs came out, there were decades worth of film and television content available for them,” he says. “We don’t have that luxury here. We’ve had to make all VR content from scratch.
“Content is a huge driver of VR adoption and we’re passionate about supporting studios of all sizes, creating all kinds of content, and getting their work into the hands of consumers. Great content will keep people coming back to their Rift and sharing that experience with friends. The more content there is and the better that content is, the more people will use VR.”
To that end, Oculus has already invested $250m (£193m) to help developers get their games onto the Rift, and in October Facebook founder Mark Zuckerberg pledged another $250m to help speed up that process even further. This approach hasn’t been without its critics, but Rubin believes a strong and committed cash flow is crucial to creating a vibrant, healthy ecosystem.
“Oculus is – and will continue to be – the most aggressive backer of VR content in the market, and we’re spending that money to jump start the ecosystem within a few years, rather than ten or more. We are very satisfied with VR adoption by the development community. We want great VR content available to the public and Oculus is a source of information and money for studios.”
Oculus is also starting to break into Vive’s room-scale market, as users can now add a third sensor to their VR setup to let them move around the room with a pair of Touch controllers.
“Oculus has waited to release its hardware and software when it is ready. We could have raced to release hand tracking, but instead we waited until we knew we had the best hand trackers in the business and the best launch line-up and first-year software to support it. We could have raced to release room scale before we were ready, and filled the store with tech demos to support it, but how would that have benefited consumers?
“We do not feel a need to race to get features out so we can say we are first. By being patient and strategic we have put ourselves in a position to have better hardware, and better content, at a lower price point. Ultimately, that sets Rift up to win. Nobody will look back on this first year of VR and remember who came out months earlier with a feature.”
Breen and his team at Vive are also starting to see the benefits of HTC’s $100m (£77.4m) accelerator program, Vive X, which was announced in April 2016. One of the first products to market will be TPCast’s Vive Wireless Adapter, a small device that attaches to the Vive’s head strap and completely eliminates the need for its wire tether. Available in Q2, this $250 (£193) upgrade kit has huge potential for both consumer and business users alike, but Breen believes it’s HTC’s own Vive Tracker devices that will really spur a new direction in the VR industry.
“We’re excited for the positive challenges that lie ahead,” he says. “We’re looking at a few developments that will come. One is around the increase in accessories that we’re seeing, especially as a result of the Vive Tracker that we launched at CES. This has already led to items such as gloves, baseball bats, fire hoses, spray guns, gaming guns and cameras all being used in collaboration with our Vive Tracker. Another development that we’re seeing more and more of is content that impacts on more people’s lives, for example, great educational content.”
Indeed, alongside its Tracker announcement at CES, Vive unveiled its very own Viveport platform. This has been specifically designed for its ever-growing library of non-gaming content, providing developers with that all-important route to market that simply isn’t available on more traditional storefronts.
“When we first launched Vive, most of the content available was gaming content and it has a very natural home with Steam,” Breen explains. “Over the course of the last year, we’ve seen more non-gaming content coming out and that’s been one of the driving factors for Viveport being launched. We’re aiming to grow VR as a whole through Viveport. In addition, we’re launching Viveport Arcade to help developers with access to arcades and to help arcades with access to great content.”
Location-based VR was a big topic at last month’s VR World Congress in Bristol, and many speakers, Breen included, are confident that VR arcades will become the first point of contact for many consumers who are curious about this new technology.
“It’s been a really great thing seeing how much demand there is for VR arcades in the modern world and how they’re becoming go-to locations,” Breen continues. “It’s great news and a really good way of bringing people into great VR. Arcades and games aren’t mutually exclusive but rather arcades are outlets for games benefiting arcade customers and developers alike.“
Sony, on the other hand, has arguably a slightly harder task on its hands. Unlike its rivals, PS VR is aimed squarely at the world’s gamers – there’s no other use case. It also has to struggle against perception that it’s merely a peripheral, rather than a platform in its own right.
The closure of one of PS VR’s biggest developers, RIGS creator Guerrilla Cambridge, doesn’t exactly bode well for the fledgling headset, but Benson assures us that developers are still flocking to PS VR in their droves.
“To be honest, we have so many VR developers approaching us that we don’t see [getting more developers to make VR content] as an issue currently,” he says. “In the first few months of PS VR’s life, there are already around 100 VR games and experiences on the store with lots more in the pipeline.”
Dedicated VR games are important, but Benson says developers shouldn’t be afraid to create games that can be played both in VR and on a regular TV.
“Resident Evil VII: Biohazard is a great example of a game that works well both in VR and as a conventional TV game. It’s worth noting, though, that the PS VR version has had a lot of tailoring to make it into a good VR experience – it’s not just a case of adding a VR video mode. Overall, I think if a game can work well as a VR game and a conventional game, then this is a real sweet spot, as the game can be available to the widest possible audience, allowing the developer to justify lots of finessing of the game.
“DriveClub is a similar example as this is available as a conventional game and a PS VR game, with both delivering a high quality experience. Some developers will still choose to make games that maximise the benefits of either PS VR or TV, and as a result, we are likely to continue to see some games that wouldn’t suit VR and are TV only and some games that wouldn’t suit TV and are VR only.
“Overall, I think the main hurdle is just a lack of experience, as VR is such a new medium for gaming. Everyone is learning really fast, however, and we’re seeing many elements of VR maturing very quickly, such as mechanisms to let the players move freely through the VR game worlds comfortably. In another year’s time, I’d expect that the development community will have refined many techniques for making VR games even better with improvements in practically every area of the game. It will be an amazing journey to follow and I’m really looking forward to seeing how things progress and what incredible experiences virtual reality gaming will unlock for us.”
SuperData’s predictions for 2017 sales show steady growth for Oculus (predicted to move 496,000 units) and Vive (1.3m units), while PS VR should sell a heftier 3.5m. Elsewhere, Google’s Daydream platform should become even stronger as it rolls out across many top-tier handsets. Benson, Breen and Rubin are all excited by the year ahead and what the next 12 months have in store.
“Our focus has always been – and still is – on offering the best possible VR experience,” says Breen. “We believe that as long we can continue to do that then Vive will be in a strong position. We’re doing as much as possible to enhance that experience and to support various areas of VR from items such as the Deluxe Head Strap and Vive Tracker that we announced at CES through to the content creation side with Vive Studios and the content delivery side with Viveport. The VR industry is heading for a brilliant future and it’s inspiring that we can help to enable that.”
Benson adds: “Personally, I would like PS VR to be in the homes of many more gamers with everyone enjoying a wide range of VR games and experiences. I’d also like to see more PS VR games with social features integrated directly into the games so our gaming sessions with remote friends can be much more like local multiplayer gaming. PS VR has the opportunity to really deliver on this and amplify the connections with our remote friends. If people think PS VR gaming is great now, then I think they will be even more amazed in a year’s time by the types of experiences that will be available, and I believe that the social element will be a huge contributor to the value of VR gaming.”
As for Rubin, he foresees a future where mobile and PC-based VR co-exist just as well as mobile and console games do at the moment:
“There is a place in the future of VR for both mobile and PC VR,” he says. “Just think about your daily life –some days you want to kick back on the couch, and with VR that might entail putting on a Gear VR and looking around Yosemite with former president Obama. Other days you might be amped-up to stand, duck, and shoot with Robo Recall for hours. VR should offer a variety of comfort and activity levels because the audience is not homogenous, and I believe mobile and PC VR will both continue to have a place in the ecosystem.”
He concludes: “With the most competitive price, the best hardware, and the best content, Rift is set up for a great year. But we will not rest on our laurels.”
At this year’s VR World Congress, held in Bristol last month, AMD’s corporate vice president Roy Taylor (pictured left) discussed the next big challenges in VR and the steps companies need to take in order to meet them:
“The future of virtual reality is going to come at us at a rate that’s completely unprecedented in the IT industry,” he says. “Whatever you’re planning, plan not for where you think the technology is now, but plan for where the technology is going to evolve in the next three years. You should be building it into your business plan and the ideas about how you’re going to develop the technology.
“One of the challenges we face are those pesky wires. Those wires are an inhibitor to what should be giving great freedom of movement. If [companies like Raw Data developer] Survios can invent a system for us to move around [with Spring Vector], then I don’t want those wires to be an inhibitor.
“The next thing you need is really fantastic content. Recently, AMD announced a multi-title extended partnership with Bethesda […] and Fallout 4 VR will be a ground-breaking VR title. This will be the title that changes the industry. This will be the Mario, the Sonic the Hedgehog, the title that changes the way we think about games and virtual reality.
“There’s also a challenge in [using] game engines. The horsepower to make a virtual reality scene like [the opening of the film Gladiator] doesn’t yet exist. It is a challenge, but the competition between AMD and our competitors at Intel and Nvidia is fierce. The quality of the content is going to improve dramatically because we are going to produce better CPUs and GPUs, which will give you the power to put more stuff in a scene.
“The other thing we’re going to see is the rise of location-based VR. [The IMAX VR Centre in Los Angeles]
is wonderfully popular. It’s the beginning of a profound change we’re going to see around getting VR into people’s hands through location-based VR. [This] is important not only because we can get access to more people and bring in more revenues, but VR in our home is expensive and takes up space. [With location-based VR] we can give people wonderful VR they couldn’t get any other way.
“In conclusion, there’s never been a better time to be a producer, a director, an investor, an executive right now in immersive technology and virtual reality. If you have a project or you’re interested in developing something together with us, AMD would love to hear from you.”