Was it actually a good year for VR, or a bit patchy?

Written by on December 14, 2016 in Guest Blog with 0 Comments

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VR hits a bump but AR in the enterprise fares better. It looks very much as if 2016 for augmented reality (AR) and virtual reality (VR) has panned out much as I feared it would (see here) in contrast to the optimism and hype at CES 2016.

The supply chain has invested heavily in production of VR and AR units but has subsequently seen HTC’s Vive, Occulus Rift and Samsung’s Gear VR all undershoot expectations with no immediate improvement on the horizon.

  • Worst of the lot is Sony’s Playstation VR which was expected to ship 2.6m units during 2016 but now looks set to ship just 750,000 (SuperData).
  • Google Daydream has also disappointed with shipments now expected to be around 250,000 rather than 450,000.
  • This is a strong indication that the limitations of VR in particular remain legion including:
    • Price: Many of the devices cost several hundreds of dollars and also require a PC to run, further increasing the cost.
    • Clunky: VR and AR units are still large, clunky and uncomfortable to wear.
    • In many cases they also make the user feel foolish when wearing one.
    • Comfort and security: VR in cuts the user off from almost all sensory inputs from his immediate environment severely limiting the situations in which the user would feel comfortable using one.
    • Many units also cause feelings of nausea due to an imperfect replication of the real world compared to what the brain is expecting.
    • Cable: Many units require an HDMI cable which prevents the user from moving and also increases the risk of a fall should the user trip over the cable.
    • Content: Both games and content remain in short supply limiting the reasons for users to immediately adopt the platform.
    • The adult entertainment industry is a good yardstick for the adoption of new media types and even this has been slower than expected to jump in.
  • The low volumes of the Sony PlayStation VR headset is the most surprising as I have long been of the opinion that it has the best chance of success.
  • This is because the unit is cheaper than the others, runs on the PS4 which already has an audience of nearly 100m dedicated game players.
  • For these reasons, I think that PS4 VR has a big advantage over the others but its marketing efforts have not been particularly aggressive which has also hurt its appeal.
  • The net result is that VR is clearly not ready for the prime time and there remains a lot of work to do before volumes will really take off.
  • I do not see this happening in 2017 meaning that the outlook for next year remains pretty grim.
  • AR has exactly the same problems with the exception that it has plenty of applications in the enterprise where the content, comfort and price limitations are less important.
  • Consequently, those AR companies that are focused on productivity applications are likely to fare better in the short term.
  • I would steer clear of any investment depending on VR for now and HTC in particular.

This article was first published on RadioFreeMobile.

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About the Author

About the Author: Dr Richard Windsor is the founder of Radio Free Mobile which is an independent research provider. The research helps clients to understand and evaluate the players in the digital ecosystem and presents a unique perspective on how all the pieces fit together in an easy to read and digest way. The product is available on a subscription basis and counts members of the handset, telecom carrier, Internet, semiconductor and financial industries as its subscribers. RFM is the land of the one man band meaning that Dr. W. also makes the tea. .


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