Mobile VR is the Path to the Mass-Market
To truly be consumer-ready, VR needs to be accessible to the average consumer.
2016 has been such an important year for VR, largely as a result of several highly anticipated HMDs, including the Oculus Rift, HTC Vive, Razer OSVR HDK2, and Sony PS VR (launching soon). These HMDs have been such a critical launching pad for the entire industry because they are capable of delivering on the decades-old promise of VR — a truly immersive experience that transports you to any place on earth or even another world entirely.
Those price tags though
But for most of us, these top-of-the-line HMDs are simply too expensive. Don’t get me wrong — they provide the richest VR experiences in the industry’s history…but I can’t imagine the average consumer paying $400+ for an electronics device that they can’t carry around with them. At the top end of the market are the Oculus Rift and HTC Vive, which retail for $599 and $799 respectively, but also require consumers to spend at least another $1,000 for a desktop PC powerful enough to support the graphics processing required. So all-in, the cost of a top-of-the-line VR system will run upwards of $1,600, which is simply too high for the average consumer, even if the experience can be life-changing. And history has shown that consumer electronics need to break the $500 barrier before they can begin to achieve scale.
So at least for now, the promise of VR is really only relevant for enthusiasts, developers, and hardcore gamers…not the mass-market.
So how will VR ever “cross the chasm”?
Recent developments have shown that mobile HMDs could be the path forward for VR into the mass-market. Let’s first quickly distinguish between tethered and mobile HMDs. The Oculus Rift, HTC Vive, OSVR HDK2, and PS VR are all “tethered” VR devices — in order to operate, they rely on a separate (but tethered) computing unit such as a $1,000 desktop PC or a $350 PlayStation 4 gaming console.
Unlike tethered VR devices, “mobile” HMDs rely on your smartphone for their computing power. They sit at the opposite end of the spectrum compared to tethered devices. Mobile VR headsets such as Samsung’s Gear VR and the Google Cardboard deliver a lower-quality VR experience, but they are also incredibly simple to use and a mere fraction of the cost. If you have a smartphone, you just pop it into one of these mobile headsets and you’re on your way.
The Gear VR retails for $99 and Cardboard headsets are typically less than $30. More importantly, mobile HMDs open up the VR market in a way that high-end, tethered devices simply cannot because the average consumer is increasingly (if not already) smartphone-ready.
But proceed with caution! As you would imagine, with the much cheaper Google Cardboard, you get what you pay for. Cardboard headsets admittedly deliver a far lower-quality VR experience as latency hovers much closer to 100ms, which (as I described in my earlier post on VR hardware tech) likely leads to motion sickness.
The significance of Daydream and Android N
The great news is that smartphone technology has progressed so much in recent years that the latest smartphones now possess the necessary hardware components needed to deliver powerful, high-quality VR experiences. Rapid improvements in both CPU and GPU hardware, as well as OLED displays help to support better image rendering, faster refresh rates, and higher resolutions.
In Google’s most recent annual developers conference, Google I/O 2016, the company marched further down this path when it announced Daydream, its VR platform that will operate on top of the forthcoming Android N operating system (expected to launch publicly in September 2016). More importantly, Android N would be capable of transforming any smartphone into a high-quality VR device. Initial indications are that Android N will be able to offer a special “VR Mode,” which will take advantage of certain innovations and techniques to reduce latency down to 20ms. If true, this would propel mobile VR experiences into the same league as the leading, tethered HMDs, which also advertise near-20ms latency.
Once your standard-issue Android smartphone is capable of delivering latency-free VR, then (assuming Apple can quickly follow suit) the market will truly open up to the mass-market. Mathematically, roughly 80% of the world’s 551 million smartphone shipments in 2015 currently run Android, implying a market potential of roughly 440 million consumers that could easily access Android’s VR Mode by year-end. By comparison, the number of consumers with VR-capable processing power is currently closer to just 50 million. Leading graphics card maker Nvidia estimates about 13 million VR-capable PCs and Sony has sold a little over 43 million PS 4 gaming consoles (as of July).
Mobile has to be the way forward and fortunately we are at the cusp of VR’s next frontier.
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Disclaimer: I am on the investment team at Marker VC. The views expressed here do not necessarily represent those of my employer.
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