Of game consoles, VR and all that jazz

Posted: 04.18.17

The difference between selling and promising

The seemingly unbridled enthusiasm for gaming in VR continues even the face of the disappointing sales results, unresolved technical and physiological problems (that may never be solved), and turmoil in the biggest, most visible company in VR. In the face of all that, new conferences pop up like cheap trendy clothing in a store front. 

Despite persistent concerns that ac¬ceptance of Virtual Reality (VR) de¬vices may be falling short of initial ex¬pectations—even with recent positive sales numbers—a recent study by Magid (Frank N. Magid Associates) found that the majority of recent purchasers of VR devices are very satisfied with their purchases and that the performance of headsets exceeded their expectations. Across all device types the positive ex¬periences far outweighed the negative. 

  •     61% of purchasers reporting the de¬vice performed better than they ex¬pected 
  •     89% of purchasers indicated they were Satisfied or Very Satisfied 
  •     In terms of value, 85% believed their device was Good Value 
  •     90% of purchasers rated their device Easy or Very Easy to use 

VR Intelligence survey respondents

Magid surveyed 1,000 US internet users ages 18 to 64 in January 2017. Respondents took part in the survey if they participated in at least one of the following activities weekly: watched live or recorded video on a TV, PC or mobile device, or played games on a computer, console or mobile device.

The study also explored the kinds of content that users were experiencing on VR devices and showed the potential for a variety of content areas. 

  •     72% Viewing of non-gaming video content such as short videos and TV experiences on VR 
  •     63% video games 
  •     51% Music and virtual travel were also among the top VR experiences 

Overall, the study found that the VR devices consumers purchased this past holiday season exceeded their expecta¬tions. 

  •     60% who purchased a VR headset that works with any smartphone, said it performed at least slightly better than what they initially expected. 
  •     64% of internet users who bought a VR headset that connects to their PC said it has exceeded their expectations at least slightly 
  •     63% said the same for the PlayStation VR headset they purchased. 

Industries VR is expected to have the most impact in the next 3 years

For desktop VR hardware alone, Bloomberg Intelligence and Gartner pre¬dict $4 billion in worldwide revenues this year, growing to $21 billion by 2020. 
VR Intelligence also conducted a sur¬vey in March of 523 VR professionals. 

Samsung Gear’s VR HMD was rated the overwhelming highest (average 61%) for a quality experience by the hardware developers and content creators (68% of the respondents), followed by Google Daydream at 26%. Making a mobile VR HMD 87% the HMD of choice. 

Industries VR is expected to have the most impact in the next 3 years.

However, last year Gamer network reported that the results of a survey of nearly 13,000 gamers across Gamer Network websites (the network which also publishes in¬dicated most gamers are not interested in VR. 

  •     15% said they intend to purchase a VR headset in 2016 
  •     60% said they would not consider a purchase 
  •     25% were unsure 

Also, 75% of the respondents said that they currently own a gaming PC, indicating it was a PC oriented group of respondents, the very kind of consumer that some predict will be most receptive to a VR headset purchase. 
And yet, in the face of this dose of reality, plus the results of shipments to date, research firms continue to offer glowing forecasts of a booming market. 

Over $4 billion dollars is forecast for VR revenue in 2017 (Bloomberg) 

And ironically, looking at VR Intel¬ligence’s survey, SW and HW developers think gaming will be the big application for VR. There is a definite disconnect between reality and dreamality. 

This is what is wrong with the VR community today? It has the wrong per¬ception about what VR is good at and what it will be used for. Why does no one mention porn (that’s not a joke or snideness)? Where is military, and sci¬entific (such as chemistry)? VR is being perceived as gaming vehicle, and that is one of the applications it is poorest at. Most of the respondents of the survey are content creators (who are probably focusing on games), and 18% was press, who are telling their readers, it’s going to be games. 

When the counts come in for Q1’17 VR shipments, we predict the num¬bers are going to be disappointing. And then the hysteria of how the VR market crashed and all those boosters will sud¬denly say, we told it wouldn’t work. 
What do we think. 

Our senior game analyst, Ted Pollak points to the sales Nintendo has made with their new Switch selling more than 906,000 units in March, according to the NPD Group, and the $30 billion re¬alized in the PC gaming market—most of it in the high-end. 

PC sales are increasingly motivated by the video game use model which is important to understand in a stagnant or declining overall PC market. 

Says Pollak, while some companies and their visionless advisors literally burn money chasing virtual and aug¬mented holograms of a false future, real money is being minted the old-fash-ioned way: selling things people actu¬ally want. 

“My words may not reach the ears of anyone of consequence but they will echo in the halls of wisdom for eternity: people in general don't like things on their faces.