Virtual Reality in 2018 and where it is going
This piece first appeared in the second edition of my newsletter, Emerging Technology and Media. Check it out here.
In 2016, the tech world lost its mind for virtual reality. But this was not an overnight phenomenon. In the previous five years, the stars had aligned in such a way that virtual reality was ready to burst onto the scene. When it did, virtual reality almost looked like an inevitable success and not a speculative new technology.
Ready Player One was published in August 2011, becoming a New York Times bestseller and inspiring people to imagine a world where virtual reality was the dominant form of entertainment. A year later, 19-year old Palmer Luckey founded Oculus and launched a ground-breaking crowd-funding campaign for a virtual reality headset. In March 2014, Facebook purchased Oculus for $2.3 billion, legitimizing the nascent technology and giving Oculus the resources to compete with just about anyone. Steven Spielberg signed on to direct a film adaptation of Ready Player One in March 2015, which indicated that virtual reality was going to be making a huge cultural impact in a couple of short years. In late March and April of 2016, the first consumer version of the Oculus and the HTC Vive hit the market. Sony released the PlayStation VR in October 2016, enabling potentially millions of PlayStation owners to jump on the technology. Virtual reality had arrived. Market researchers anointed virtual reality as The Next Big Thing, projecting $5 billion in total sales in 2016 and almost 40 million devices sold.
Today in the Bay Area, virtual reality is a conversational dead-end. In 2016, the VR industry generated $1.8 billion in sales and shipped 6 million devices, a far cry from the projections at the beginning of the year. 2017 was also a disappointment for the industry. Steven Spielberg’s Ready Player One has come and gone without much impact, despite grossing almost $600 million in box offices worldwide. People reminisce about how wrong we all were about virtual reality and how it isn’t going anywhere. Broaching virtual reality as a potential platform for entrepreneurship is met with scoffs and skepticism. The market researchers cooled off on VR but are still long-term believers. Current projections place VR sales at $4.5 billion in 2018 with significant growth in 2019 and onward.
From the vantage point of May 2018, it is easy to see where things went wrong. Early adopters were keen to try out the new technology and rushed to buy the early hardware. This led to success for even compromised products such as the Google Cardboard and the Gear. This also led to selling out for the initially limited supplies of the Oculus, Vive, and PSVR. But the experiences people were looking for weren’t available yet. The content on the platforms was crude, made people ill, and wasn’t immersive or deep. Developers and designers hadn’t learned how to work with the technology and adapt it to mass consumption yet. The hardware itself was bulky and expensive. Devices like the Oculus and Vive required something that was becoming scarce in living rooms — a powerful personal computer. Setting up a virtual reality experience required free space and often involved too much friction to be done at a whim. While the early adopters were willing to try out this latest generation of virtual reality, it wasn’t accessible or good enough to move beyond this point.
It can be easy to get swept up by the periodic waves of hype that roll through the technology industry when all you are doing is reading the headlines and bombastic coverage of TechCrunch. To get to the reality of an emerging consumer trend, you should get close to the experience and become a consumer. My experiences with virtual reality date back to February 2015, when I bought my first Google Cardboard. The experience was crude, brief, and low resolution but it was a beginning. It was good enough that the early adopter in me easily justified a PlayStation VR in late 2016. After hearing about how much better the Vive was, I splurged on a state-of-the-art desktop and set-up a permanent VR area in my living room. My interest in VR led me to augmented reality and beta testing Pokémon Go as well as experimenting with Snapchat Spectacles.
For all of the reasons I mentioned before, the technology and content was not ready. But I became convinced that the technology would be unmatched in its ability to immerse users. For as crude as the experiences were, I momentarily believed I was in those virtual worlds. Virtual reality’s complete control over my sight and my hearing was that potent. Even in the cartoonish world of Rec Room, I became completely immersed. For virtual reality to realize its potential, developers need to build worlds and mechanics that leverage this capability. But this is a chicken and egg problem, because there aren’t enough virtual reality users to justify the investment by developers. For more people to jump into virtual reality, they need more accessible hardware.
The past few weeks have given me renewed hope that virtual reality will fulfill its promise in the next three years. As I covered last week, the Oculus Go is a capable and well-designed device. Having tried it out this week, it represents a true step forward towards making virtual reality accessible. It has the ease of use of the old, phone-based Gear. The ability to just put a headset on without any cables or dependence on a computer cannot be undersold. It also has good-enough resolution and a robust software and content ecosystem. At $200 many people will be willing to try it out. The last step is getting this kind of device, at this price point, with a robust ecosystem, to support six degrees of freedom. Six degrees of freedom is essential to elevating the virtual reality experience. There are indications that Oculus’s Project Santa Cruz will offer the complete package, though it isn’t likely it will be able to hit the right price point. Given another two years, it is likely that the technology and production will enable a fully capable untethered headset for $200. In console gaming, it has been common for Sony and Microsoft to use consoles as loss-leaders and profit off of services and games. If virtual reality platforms adopt this strategy, which I believe they will, it is possible we’ll get there faster.
A new game phenomenon has hit the VR community as well, receiving overwhelmingly positive praise and spawning an active modding community almost overnight. Beat Saber is a rhythmic music game very similar in theory to Dance Dance Revolution, Guitar Hero and Rock Band. In the game you wield two differently-colored rods that look like lightsabers and use them to cut through floating blocks that fly at you in time to a musical track. It sounds complicated but it is one of the easiest-to-learn VR experiences I’ve seen. It also has a surprising amount of depth and a high skill cap. Beat Saber’s ease of learning is its most critical accomplishment though. A complete novice is likely to get through their first track in the game, and feel great doing it. Beat Saber is a ton of fun and is far superior to its virtual reality competition. It is polished, tightly designed, and inexpensive to try. These qualities have been scarce in virtual reality and this is why Beat Saber is a phenomenon in the VR community. A developer locking in on how to accomplish this means more developers are going to figure it out.
Beat Saber is the new bar for virtual reality experiences and virtual reality platforms will need a healthy supply of such experiences to succeed. Multiplayer experiences like Arizona Sunshine’s zombie horde and Rec Room’s casual sports demonstrated that virtual reality is a lot of fun with other people. Polished experiences like Beat Saber demonstrate how a well-designed and well-executed virtual reality experience can be easy to learn yet infinitely replayable and difficult to master. Developers will find ways to reliably produce the qualities of these successful experiences while building out diverse genres and categories of content.
There is a path for virtual reality to accelerate as an emerging technology that is somewhat independent of the hardware and content. That is if enterprises find ways to adopt it. Enterprise-scale adoption goes a long way towards normalizing a technology for consumer usage while enabling manufacturers and developers to gain the benefits of higher scale. Enterprise adoption also helps support a nascent industry while early friction is addressed. I believe there is potential for virtual reality to gain steam in the workplace.
Companies are becoming more aware of the issues that the open office creates — frequent interruption, no privacy, ambient noise and odors, etc. Virtual reality and its unrivaled immersive potential could address these issues. Remote work is also a trend that companies are utilizing, in order to gain access to global talent pools. Workers looking to avoid urban environments or create wage/cost arbitrage influence the trend as well. Virtual reality could make remote work more viable, as it could facilitate relationship development and close collaboration that come from physically interacting with coworkers.
I remain bullish on virtual reality as a technology and as an experience. I’m skeptical about the likelihood that it will become ubiquitous or even gain mainstream-level adoption, but it will have at least a secure niche of certain experiences and use cases. The recent hardware releases are encouraging, as are some of the latest software experiences. Virtual reality’s future is dependent on progress across two fronts: hardware and content. Without affordable, untethered hardware the friction of the experience is simply too high. Without high-quality content and software, there is no reason to put on the headset. Recent progress in these areas is very encouraging and I believe we’ll see commercial success for the industry in two years.
That’s all folks!
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