Everyone’s talking about virtual reality. It’s the new hotness; the new sexy time; the new “it” thing. The only problem is that virtual reality hardware is ridiculously expensive and now that the pricing has been plastered all over the wall, some research firms are scaling back on just how much they expect VR to make for 2016.
GamesIndustry.biz managed to get in word with SuperData’s director of research Stephanie Llamas, who explained to them exactly why their forecasts have been lowered $5.1 billion to $3.6 billion for 2016, saying…
“”Since we published our original figures, we have had a number of conversations with both hardware and software developers, as well as access to newly public information.”
“We previously overestimated PC and mobile hardware penetration and underestimated console hardware sales. Console will be high-end VR’s white horse since it has lower hardware requirements, easier set-up and lower pricing. PlayStation’s 35 million-plus users are also a far larger accessible audience than that of high-end PCs, which tops off at about 17 million.”
Those are interesting figures. Nevertheless, they’re basically saying that the hardcore PC market isn’t going to be enough to blast sales up to where they expected when it comes to the adoption rates of VR headsets. They’re looking to a decently priced PS VR to help compensate for the $600 Oculus Rift and $800 HTC Vive.
If Sony prices the PS VR no higher than $399 then they might be able to win over some casuals, but anything higher and they’re already limiting the scope of virtual reality on home consoles to just a fringe group of gamers.
Llamas explained that the high-price and expensive manufacturing costs is going to drive adoption rates down, for now. However, they expect that over the next three to five years things will pick up for VR…
“John Riccitiello’s ‘gap of disappointment’ (slow hardware adoption that accelerates after a few years) forced us to take a harder look at hardware’s growth within a historical narrative. We found that media adoption (e.g., TV, computers, smartphones, etc.) has always seen exponential growth that can be attributed to easier access and decreasing prices. However, this initial lull in adoption has shortened due to both product visibility on a global scale and the speed at which manufacturing costs drop. So although we see that initial struggle for VR, there will be a relatively quick push upward within the next 3-5 years.”
According to GamesIndustry.biz, they state that SuperData is estimating that VR hardware and software will eclipse $22.9 billion in annual revenue by 2020. We’re still a long ways away from 2020 and VR still has to survive 2016 before looking that far ahead. But given that VR’s popularity is going to be based on its initial first year sales, it’s going to fall back on that old saying: software sells hardware.
If there’s good enough software to help convince casuals and hardcore gamers alike to purchase VR headsets, then they’ll survive. If there’s nothing noteworthy for the Rift, Vive and PS VR, then expect to see some serious lulls in VR hardware sales.