The reality of virtual reality

Why mass market VR won’t come soon

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Gilles is the CEO and founder News Republic.

A little more than a year ago, Facebook acquired Oculus VR (Virtual Reality helmet designer and manufacturer), for $2 billion – kicking off a series of investments and start-ups in the burgeoning field.

All manufacturers – from Intel to Samsung – are following suit and contributing to this new hype. Content studios, equipment developers, study tours, cameras, developers, are all rushing into the race. (If you have time, read this Medium article, which I find extremely insightful). Of course, in a self-fulfilling prophecy approach, forecasts are flying through the roof, betting on a market that will reach $150B in the next five years!

But the hype ignores some key facts – if explored closely – that suggest that 3D, augmented reality or even VR 1.0 – will most likely fail. Virtual reality will continue to be virtual for many years – at least for the mass market – as augmented reality and 3D are. Here are a few big explanations for why…

It offers a pathetic user experience.

I’m not always sure if everyone writing about VR have actually tested the equipment and user experience. Setting up and using a Virtual Reality helmet is pretty painful for the following reasons:

  • The set-up is convoluted. Except for the Samsung VR helmet, the level of expertise needed is far above the average tech user. In fact, the technical skills needed to use most available VR products means that only those with a strong tech background will be able to use it.
  • The screen resolution. To have a good immersion, you need to have a decent resolution. The fact that you watch a screen so close to your eyes makes this expectation even bigger. A 4K resolution is the minimum needed and yet none the VR helmet offer this resolution.
  • Smooth movement. Once you have great definition, you need to propose a high refresh rate of the screen or FPS (frame per second) in order to offer a smooth display when you move around. The correct level is around 90 to 120 FPS.
  • Hardware console. To manage a 4K resolution picture at 90 to 120 FPS properly, you need to have a high-tier boosted PC, a configuration that starts out at $2,000. As a point of reference, even the latest console PS4 is not powerful enough to manage a 4K game.
  • Leach. It is never shown on photos about VR, but you always need to have cable that links your helmet to the console / PC (the only exception being the Samsung VR, which is a plug-and-play solution with a low resolution). It’s pretty uncomfortable after a while.

There’s no customer.

Just because something is innovative, cool, and has massive financial backing doesn’t mean it will be inherently successful. The most successful products solve a problem for customers or fulfil a need. At its core, virtual reality does neither. For the moment, there are only three potential types of users that seem to be candidates for the VR market.

The first of these user types? The gamer. At first glance, the gamer sounds like VR’s number one customer. And it is true that VR provides a true added value to video games, especially in the first-person shooter and racing categories. Plus, gamers are usually technologically-savvy and open to investing. Nevertheless, the segment is very demanding. The innovation around 3D games and 3D TV was focusing on these people as a natural target. But mass-market 3D never took off – even for the gamer. There is a risk that the same thing will happen for VR.

Then there’s the porn watcher. While consumers of adult content would seem like an obvious major target, there are several, seemingly insurmountable obstacles in the way of making virtual porn a reality. For one, the equipment to provide feedback and interaction for the user doesn’t exist for the mass market. In addition, this market isn’t as fanatical as the gaming market, making it less likely that they’d be willing to shell out the big bucks required to develop the products necessary.

And finally, there’s the entertainment enthusiast. The ability to attend a concert, a show, or a game in virtual reality is pretty attractive. If it is a real market, the question is: will it be big enough to support a full industry?

It’s too expensive for the user.

The price of a helmet is around $400 to $600. But to work properly, you need to have a PC that costs more than $1,000. The full package is clearly close to $2,000. While some enthusiastic geeks will invest in the market, this price range keeps VR from producing mass-market products.

By running a sanity check on previous similar innovations such as 3D, Google Glass, Augmented Reality, factoring in the operational constraints of what virtual reality means for the consumer, and taking into consideration the technical challenges and the potential markets, I have already posed many open questions that question the future of VR. While it undoubtedly has potential for today’s businesses and civil organizations, betting on it for the mass-market segment is a high risk venture in the short run.

Nevertheless, with the evolution of the respective technologies – especially on the hardware side – Virtual Reality should be ready for mass market in 5 to 10 years.  Will companies be patient enough to wait that long? One thing is for sure: Facebook will.

Gilles Raymond is the CEO and founder News Republic, a mobile news syndicator. Gilles wrote a master thesis called “Virtual Reality Myth and Reality” in 1994, and has been following the market ever since.

24 Responses to “Why mass market VR won’t come soon”

  1. Logistically Challenged

    “I’m not always sure if everyone writing about VR have actually tested the equipment and user experience” Really? Maybe I can help.

    Those who’ve not tried it think it’s just another 3DTV (not actually that bad if you have a projector) and like 3D is just a gimmick and going to fail.

    I’ve always been interested in VR but last year (2014) me and my son attended EGX. I was only interested in trying Oculus while my son just planned to try all the latest games.

    First stop was the Oculus booth and for good reason. The queue was over 90 minutes wait despite numerous DK2’s, 16 I believe.

    Save the low resolution which I was prepared for, the fov and immersion was beyond our expectations. While many commented the resolution could be better, everyone we met were blown away with the demo’s.

    While my son checked out a few other non-vr games, most of our time was spent seeking out other VR demos and just before leaving, went back to the NVIDIA booth to play with EVE Valkyrie as others we leaving.

    6-8 weeks later we received our own DK2 to play with. Maybe not the best move as it’s going to be obsolete soon but it did give us an excuse to play with Unity and get creative.

    While it’s true, it’s entirely user friendly (but much better with latest runtimes), you need to remember, this are developer units aimed at … er … developers :) Even now, the performance has improved a lot, even on a low end GTX 770 at an fps of 75Hz.

    Consumer unit due soon will be 90Hz and that is more than enough. Icing on the cake would be 4K but resolution is not a deal breaker, it’s just folk have forgotten how low resolution was on older monitors.

    Obviously, it goes without saying, we’ve not just tried it, we bought the book, the film and the fluffy toys and don’t regret it one bit.

    Think this reviewer just forgot to take his meds prior to penning this article. That and the fact I don’t believe he has spent any real time with it.

    Regarding the comment about no customers, if you think gamers, porn lovers, and entertainment is the limit of the market, then clearly, you know nothing of VR’s history.

    VR’s not new, it failed the consumer market decades ago but as a tool for simulation and numerous commercial uses, it never died. It was simply out of reach due to exorbitant price tags (£10,000’s+) and too demanding for the average PC.

    Things have changed, not least the cost and it is finally within reach of the average Joe with a half decent PC.

    If it dies again this time around, it will be more to do with overly pessimistic critics with unrealistic expectation and zero knowledge of logistics, let alone any imagination.

    Please take this review with a large pinch of salt and go try it for yourselves but please, don’t dismiss VR on the basis of reviews like this. These trolls just get off on negativity :)

  2. Marc Yemir

    Wow! Completely uninformed and with full negative bias on an emerging technology at the very early stages of its innovation and evolution.
    GigaOm readers deserve a higher bar for quality and objectivity….

  3. BadArticle

    Oh, yeah. You are totaly right. Like with smartphone, the first gen was so shity that there were no market for it and nobody wanted one.
    If you put yourself back a few years, smartphone was a great idea but the hardware was bad but nobody care, they wanted one because it was the future.
    VR is the same, today we have great experience that are not perfect but it’s just the beginning. Let’s see VR in a few years. There is a market for it because people want to have the future and be part of what’s next.
    Oh and like there is so much bullshit in this article. 4K is great but consumer release of VR heaset coming out next year will have good enough screens to enjoy content on this first gen. A 1000$ computer will be ok for this first gen, yes it’s expensive, like every new tech that are new on the market.
    Finally, please stop thinking everybody is stupid and can’t put 2 cable on the back of there computer.

  4. This article, of course, is then followed by the one a few days later about the NYTimes sending a million-plus subscribers a free Google Cardboard and a VR app.

    The less technical you are, the more impressive the current VR experiences are. “Old school” VR people are always the most skeptical. Reminds me of my old boss who worked on mobile apps pre-iPhone. After he saw the iPhone, he said “this will never work.” I do believe he stands corrected. The same thing with VR this time.

  5. exhibit44

    Average consumers are very fussy about body image. They would never buy Segways because they made your rear end stick out, and your helmeted head made you look like a giant cake pop. They wouldn’t buy Glass because it had an asymmetrical form factor, and people yearn for face symmetry. These days nobody even wears Bluetooth earpieces unless their employment requires it.

    So this is only something you’d wear in the privacy of your home, and you can’t even socialize at home with your friends if you can’t see them. It might be a novelty for one party.

    Zuck has made mistakes before. He has plenty of money to make them with.

  6. Robert Karlssone

    While your comments may be true about the current VR market, an important thing to remember is that these technologies are changing, and as such there is no way to accurately predict this. Using Martin Banak’s example many of the original cars were very expensive and only the super rich could afford them. This changed eventually, leading to its mass production. This can be applied to most technologies, as most of them started out for only being available for the select few, and later being made available to everyone. Think of the computer, it started out being the size of a room and now they are microscopic in comparison.

  7. John George

    I’m a little embarrassed for Gigaom that they let someone with very little knowledge of the VR space write this article. Feels like a purposeful ‘controversy’ piece.

    There may in fact be reasons why VR will take some time to reach the mainstream, but none of those reasons are found here.

  8. VRobserver

    The tech is young, most of these HMDs are developer editions. Gear VR releases next month. We are going back to the first televisions and game console. This should be taken into consideration. The hardware is still in deep works to become accessible even on the mobile platform. 2017 should be a great year for VR AR. it’s the space race right now, the moon in this case is setting the standard for VR a market and customer (main stream VR). Content will be the determiner of a market being created. No one remembers the first tv but they do remember Brady bunch.

  9. The author of this article is a joke. I would go into explicit detail about why his arguments are overall invalid, but it’s a waste of my time. VR will take hold. Yes, my PC has cost me roughly $3,000 in parts, but I’m merely one in thousands of other power pc users who are ready to embrace the next progression in gaming.

  10. This article clearly shows that you have spent very little time actually trying the products themselves and more time surfing through forums and other tech articles to write this hogwash. Seriously, can’t you write something other then clock bait?

  11. Martin Banak

    With all due respect, $2000 pc have no chance of delivering 120fps at 4k most aa titles. Unless we are talking about 2k spent just on GPU’s. At the moment this would require 2 or even 3 titan x or equivalent graphic cards backed by decent cpu, plenty of ram and so on. Now this is high price to pay, but there are people out there already who have this kind of machines already or will be willing to upgrade. You see pc gamers are funny creatures and ae often wiring to spend a lot of money on pc upgrade when a good game comes out, so when vr arrives I am expecting many willing to invest to get the best experience. Having used dk1 for couple of months, I can tell that it will be worth it. I don’t expect it to be perfect from start. I am sure though it will be pretty good. The sense of presence and depth alone are something new, impossible to be achieved on regular screen. Bottom line, in my opinion vr will slowly gain more and more fans and will deliver breath of fresh air into the industry, not immediately, but it will. When cars first came out, there were plenty sceptics saying that they will fail ;-)

    Kind regards,
    Martin Banak

  12. Tony DeSare

    Lots of good points here, but ultimately the argument that the tech is too expensive and immature doesn’t really mean anything. Mr. Raymond may be right, but the condescending tone of the article may win him years of hate mail once VR does take off. Just like that guy who wrote the article in the 90’s that the Internet would never take off. He also had lots of well argued, shortsighted reasons. He also gets hate mail and tweets to this day still on the very thing he predicted would never amount to more than a nerd’s toy.

    I have an Oculus DK2. Is there a long way to go? Absolutely. However, after a few seconds of trying it for the first time, I was certain this tech is going to change the world just as the radio, television and computer once did.

    There are lots of things to complain about with VR right now, but I would bet anyone that VR is going to be hugely disruptive to many businesses, create new addictions and diseases and open the universe to the human race in unprecedented ways.

    To be fair, he’s not necessarily saying VR won’t take off, it just still has the odor of those naysayers of the world’s greatest innovations. One that comes to mind was an article I read in the late 80’s in the Sierra On-Line mag (anyone remember that one?) that had pages and pages dedicated to why the CD-ROM drive was doomed to fail. I’d like to look up that guy and ask him if he ever ended up buying one.

  13. Wow, I disagree with almost every assumption you’ve made. I made the assumption you didn’t really know what you were talking about when you said porn users aren’t as fanatical as video game players, and won’t shell out big bucks, without backing that statement up. Even mentioning VR in with 3d is laughable, as it is a technology that never fully worked, and at best slightly improved the experience of watching/playing something at huge cost (dim viewing, headaches, unimpressive utilization). VR provides an entirely different experience along with the potential for completely new ones, at the cost of wearing a hat (gamers and porn users alike are willing to shell out big bucks on hats. I offer nothing to back that up- you have to take my word for it. . Augmented reality is in its infancy, and shouldn’t be compared as an example of tech that hasn’t yetborne fruit, as nobody has made a real move to bring it to market. The question is no longer IF VR will succeed, but who will be the major players, and for how long. Cell phones to pcs to Internet to smart phone —all made information faster and easier and portable. VR will do the same for expeierences.

  14. I get the gist of what you are saying. VR and AR headsets will have to follow the way of the laptop and mobile markets though.

    Their prices will need to fall juxtaposed with the form/fashion aspect to appeal to those beyond the first 15% of the market…innovators and early adopters. Pricing is like any ither tech…expensive at first…innivators buy.l,early adopters follow…early mass then late mass then laggards 10 yrs from now.

    Microsoft has a 5 year consumer plan. SDK1 of HoloLens is due next year at $3k. They first are going industrial and education then consumer. They have a lot of engineering and innovation to go.

    Google Glass has filed 100 plus patents which some look very cool…they have also partenered with the eyeglass make Luxotica (Ray Ban and Oakley) so their form is in e works.

    Facebook V1 comes out q1 2016 but Zuckerberg has a 10 year vision but adoption will start next year and grow.

    Investment Bank and Moble analysts the $150bn market launching in 2016 and reaching scale in 2020…

    Also…with VR 01 people can get cardboard and see 360degree videos…they can spend 100 bucks and get more advanced housing…if they have the correct phone….they can go all the way to Oculus or if they have a Ps4 SonyVR route. There is a choice at all levels for price and complexity.

    Scale takes time. Like…the pioneers first started this in the 1950s and 6 decades later its happening…the driver to it all now is content gecause the barriers to hardware access is about accomplished.

  15. Ciaran Foley

    With all due respect, this feels like rushed, negative sky-is-falling link bait article. Here are some indications that this may be the case (some nit-picky, some perhaps more substantive).

    1. Firstly, VR “helmets”? Ok, let’s give that a pass.

    2. The medium article? Is just a sampling of companies in the space. Incomplete laundry list. I’m not sure what the “insight” is there.

    3. It’s easy to say something will fail in the “mass market” without defining what the mass market is, or what failure is.

    4. “The most successful products solve a problem for customers or fulfill a need. At its core, virtual reality does neither.” – Let’s take a reality check here. This is an industry that is still in R&D and nascent, pre-consumer mode. Commercial HMDs (Head Mounted Displays) haven’t even really hit the market yet. There are no killer apps. And yet, failure is imminent because VR isn’t solving a need yet. How could one have missed that?

    5. “The set-up is convoluted. Except for the Samsung VR helmet, the level of expertise needed is far above the average tech user.” – Yes, far from ideal. Again, early stage and improving every day. But convoluted? Most titles I’ve experienced are relatively straightforward to run (excepting for early stage bugs and the like). Turn on computer, click on icon, wear HMD, point head. Maybe, click.

    6. “A 4K resolution is the minimum needed and yet none the VR helmet offer this resolution.” Minimum needed? For what? It’s not like there are any 4K displays on say, consumer telephones in the MASS MARKET yet…plus, I haven’t really seen any advancement in that area, what, with Apple releasing a 5k desktop and many manufacturers beginning to speak of 8K in video production. I’ve heard some rumors about a trampoline called Magic Leap…er, wait. Ok, perhaps that was a little sarcastic.

    7. “And it is true that VR provides a true added value to video games, especially in the first-person shooter and racing categories.” This is not necessarily true when you speak to developers. In fact, we find one’s sense of immersion tends to be reduced with goal-based first person shooters during rapid motion.

    8. 3D? 3D is a cheap visual gimmick. VR/AR is a platform that puts you into data or brings data into the real world. You cannot possibly compare the two or draw any conclusions between them.

    9. Gaming and Porn. Arguments about fanaticism and willingness to spend money aside, what about collaboration?

    10. AR: Augmented Reality is completely left out of the discussion – and I understand this is most likely intentional. However, its impact cannot be underestimated as we are likely to see a convergence between the two in the future. Though AR may become the more widely adopted and “enterprise” technology, both will buoy each other.

    I agree that that this is going to take time. There will be failures along the way. But let’s try to avoid blanketing the blogosphere with link bait articles that proclaim an imminent failure before the industry has even had a chance to start.

    In closing, allow me to the offer the following insight:

    “This ‘telephone’ has too many shortcomings to be seriously considered as a means of communication.”—Western Union internal memo, 1876.

  16. Not great arguements.
    But to be truthful, I have never used one, but from what I have read from people who HAVE, they say, even at this time…it’s incredible.
    I am SURE the “rough edges” will be worked out.
    I am willing to spend 1000 dollars on it. Heck my new pc costed me over 1800, so what the heck, I can afford 1000 for another toy.
    “Too complicated”, yeah, just like PC…but people use their PC every day.
    Wow, $2000 dollars…how much was a pc when they first came out? Cost will fall. Look at 4K TV’s, Look at the costs of SSD drives compared to just a year ago!
    Either a click bait article or the writer is OLD.
    Just like my old grandpa used to say: ” Automobiles. Ha, who will buy them when we have dependable horses and wagons”.
    Automobiles are too expensive and they need gas and oil, and stuff.

  17. you article failed to mention the Sony Playstation VR which will eliminate the complexitiy factors and need for a big pc. As a huge geek and gamer, it won’t come soon to the mainstream but us early adopters will be all onboard. ;)

  18. Pandey Sudhendu

    A beautiful and insightful article.
    I can relate it to the book I read, Crossing the Chasm.
    VR can have good penetration in the innovators (the geeks you mentioned) and the early adopters market segment.

    After that the chasm is a hurdle before it can reach to mass market. Unfortunately the hurdle is not going away for a decade or so..