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Behind the Numbers of Virtual Reality’s Sluggish Debut

After years of hype, high-end VR headsets finally launched in 2016. Here’s why you probably don’t have one yet.
December 30, 2016

It’s been four years since a Kickstarter promised the first modern virtual-reality headset, and in 2016 we finally saw the technology’s commercial debut with high-end headsets from Oculus, Sony, and HTC hitting the market. More than two million desktop VR headsets are expected to have sold worldwide by year’s close.

The numbers do not exactly tell the story of a hot new consumer technology debut. By the end of 2016, 800,000 PlayStation VR units were expected to have sold, according to the research firm Canalys, along with about 500,000 HTC Vive and 400,000 Oculus Rift headsets. By comparison, Apple sold 3.3 million iPhones during the six months they were available in 2007 (the phone’s debut year), according to Gartner. Sales rose to 11.4 million in 2008.

There’s no doubt that VR is something completely transformative, a new genre that makes its potential clear to anyone who pulls on a headset. “Imagine enjoying a courtside seat at a game, studying in a classroom of students and teachers all over the world or consulting with a doctor face-to-face—just by putting on goggles in your home,” Facebook CEO Mark Zuckerberg wrote after his company acquired Oculus in 2014. In fact, Facebook sees VR as an entirely new communication platform—something that will someday “become a part of daily life for billions of people,” the way Facebook is today.

I’ve spent all year exploring and testing the headsets, and it’s clear to me that Sony, Oculus, and HTC all delivered more than capable first-generation products. So why aren’t the sales numbers higher?

The most obvious answer is accessibility. The $800 Oculus Rift with Touch controllers requires a desktop computer approaching $1,000 (or more) to run, as does the $700 HTC Vive. Only dedicated PC gamers are likely to own a compatible system already.

That leaves PlayStation VR, which plugs directly into the 50 million PlayStation 4s already in homes around the world. But just a month after beginning to ship its VR headset, Sony revealed the new PS4 Pro. Both cost $400. Both appeal to PlayStation users. Like Oculus and HTC, Sony didn’t spend a lot of time advertising its headset.

Oculus founder Palmer Luckey told the Financial Times back in January that the first consumer version of its headset, which debuted in March but had its controllers delayed until December, would mostly appeal to hard-core gamers and early adopters. The company has maintained that it is taking a long-term approach, acknowledging that it could be five or 10 years before the technology is mature enough to fully meet the public’s expectations. By limiting advertising, headset makers are attempting to manage hype and focus on the smartest way to increase adoption.

That’s a tricky balance to strike with the most important part of the equation: content. Headset makers have drawn a few high-profile developers to their platforms, but there has yet to be a VR blockbuster. Developers want masses of paying players, while players are drawn to new platforms by high-profile content—whether that’s a blockbuster game or a heavily adopted social-media platform.

In the meantime, Sony, Oculus, and HTC are using novel experiences to attract smaller numbers of devoted users. Google’s Tilt Brush—a 3-D space in which you can use hand-held controllers to draw with Vive and Oculus—is essentially the VR version of Microsoft Paint. It’s basic fun, but completely mesmerizing to anyone willing to buy into VR in the name of trying a new technology.

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