Over the past year, evidence has stacked up that VR isn't as hot as everyone thought it'd be, and it feels poised to go the way of the smartwatch, a once-promising new computing platform that ultimately flopped once introduced into the real world.
The evidence is tough to ignore.
Following the launch of the Oculus Rift and HTC Vive, we have yet to see a breakthrough game or app. Plus, the cost is prohibitive for most people: The headsets start at $600, and go up from there if you want the motion controllers and other accessories. Plus you need a powerful computer to run the hardware, which will run you at least another $500.
Sony was supposed to be the savior of the high-end VR headset. Its new PlayStation VR is designed to work with the tens of millions of PlayStation 4 consoles already out in the wild, giving it an immediate advantage over the competition. But, like with Vive and Oculus Rift, there wasn't much enthusiasm around the games and content for the PlayStation VR.
Google appears to be stumbling too. It slashed the price of its new Daydream View headset this week to $49 following a report from Amir Efrati of The Information that Google is "disappointed" with early usage numbers for the device.
Meanwhile, overall sales of VR headsets are very low, and PlayStation VR appears to have performed well worse than expected, according to data compiled by market research firm SuperData.
Given VR's lack of a value proposition, I was expecting to see that sales of these expensive white elephants had suffered, but I had no idea that sales for VR hardware were this terrible. So far, only Gear VR has actually topped the million mark in sales; PSVR managed only 28.85% of its sales forecast from only a few months earlier; the Rift and the Vive don't have a million users between them; and Google is selling Daydream at fire sale prices, apparently oblivious to the fact that a $50 add-on to an $900 Pixel smartphone still puts its VR offering well above the price point of either Oculus' or HTC's offerings.... for a smartphone-based VR experience.
This is beyond simply "not pretty." This is disastrous. And there's no sign of it improving significantly anytime soon. It's a good thing that Mark Zuckerberg is OK with spending another $3 billion on VR R&D before seeing a dollar in profits, because they're not going to be making a profit on Oculus anytime in the foreseeable future. Neither are HTC, Valve, Sony, or Google. Or anyone else that's pinned their hopes (and futures) to the VR hype train.
BI's article ends with the blunt assertion that VR "is going to remain a niche product at best." Honestly, given how badly VR is performing so far, and how many hurdles it faces, I think that's an overly optimistic assessment. So far, VR isn't even a large enough niche to turn a profit, given how expensive it is to develop for the platform.